Building a DTC Playbook

Growing up the same

We hate to make generalizations, especially when speaking about innovative DTC brands that are turning their categories on their heads, but when it comes to the underlying technology that supports the sale and marketing of their products, most digitally native brands have followed the same trajectory. We call it the DTC playbook.

There’s a reason why most DTC brands adhere to the playbook: it supports their business as they grow. If you’re a newish brand and want to get a glimpse of what your future marketing tech stack is likely to look like then read on!

Most digitally native brands launch as small operations, relying on free and low cost infrastructure to get them through the first year or so. As their marketing ambitions and skill sets grow, they begin to look for additional tools that easily integrate into their existing tech stack and let them achieve their goals.

Most frequently, we’ve found that within five years these brands will adopt:

  • Klaviyo: Brands come to Klaviyo when they want to automate their email and SMS campaigns. The platform also allows users to segment customers into logical categories (e.g. high-spenders, fashion enthusiasts, etc.) using data from all touch points, including social media. You can then use that insight to A/B test your personalization, segmentation, and messaging strategies. There’s a free version that many brands start with before upgrading to a paid subscription. The paid subscriptions are dependent on list size, but they hardly break the bank.
  • Nosto: Nosto helps brands leverage behavioral data and machine learning to create website experiences that are relevant to the individual visitor. Nosto also lets brands launch a loyalty program and social proofing, and has the added advantage of integrating with Klaviyo.
  • Klarna: Run by a Swedish bank, is a super interesting payment platform that brands use for a variety of strategies, such as enabling customers to pay for premium products in installments — a modern day layaway program. But here’s the thing: your customer may pay in installments, but you get the full price for your product from Klarna straight away. It also offers other features, including some seller protections.
  • Yotpo: As you gain experience in loyalty programs and social proofing, you may decide to up our game to the more robust social proofing stack, Yotpo. Yotpo offers a full suite of solutions for customer reviews, visual marketing, loyalty, referrals, and SMS marketing. Yotpo also integrates with Klaviyo and it offers a free tier.

 

Why do you need a marketing automation stack?

Good question, especially when one considers the suite of marketing tools built into Magento Commerce, Shopify Plus, BigCommerce and so on. Why bother learning and paying for duplicate tools?

In the beginning of a brand’s lifecycle, the ecommerce platform serves as a kind of all-in-one platform that provides all the tools you’ll need to engage with your customers. Nowadays, however, an ecommerce platform for a modern and maturing brand is really just a content and catalog management tool. Even logistics and payment are done outside of the platform via a gateway.

For the modern DTC brand, the ecommerce platform is now seen, not as a point of sale, but as a showroom. And the way that you, as a marketer, engage with that showroom, both up funnel and down funnel, is with these tools. In other words, if you want to personalize your showroom to a specific customer persona, you do so via Nosto.

The prevalence of these tools  — Klaviyo, Nosto, Klarna, Yotpo — cannot be overstated. Over the past five years, hundreds and hundreds of venture-backed brands, supporting millions of customers, have deployed and market-tested these tools. That adoption rate has made them more capable, as well as easier to implement and onboard data. They’re nothing like the rigid legacy tools used by enterprise businesses, and they can be implemented at much more affordable price points.

Playbook as a timeline

The playbook, as I see it, is a timeline. Let’s say you’re a new brand that launches with a narrow set of products that are evergreen, highly differentiated in the marketplace, supported by very clever branding and have some stated mission or purpose behind them. In other words, your DTC brand is the antithesis of the run-of-the-mill tee-shirt company (Interestingly, today we see a lot of single-category businesses that just wouldn’t have been able to exist 20 years ago, but that’s a subject for another blog post).

Now as your brand begins to grow up you probably want to deploy strategies like encouraging repeat business. One way to do that is to launch more products by expanding into adjacent categories, which you’ll then need to introduce to your past customers. That requires you to deploy remarketing strategies via email and SMS campaigns, as well as display and social media ads. Enter Klaviyo, a tool that will help you build your retention business and re-issue your brand values to past customers.

After a while, your skills become increasingly sophisticated, or you may sell highly consumable products, which means you’ll want to build a customized loyalty or rewards program, which you can do with Nosto or Yotpo. And, to drive stronger conversion rates on higher priced products, you may launch a social proofing initiative, offering onsite product reviews or user generated content.

Then as time goes by you may make the strategic decision to increase your average order and lifetime values of your customers by launching a more premium-priced product line. Of course, such a move will have a negative impact on your conversion rate, but you can counteract that decline by offering installment purchases with the aid of Klarna.

What I’ve described above is a natural progression of a brand as it grows. That growth tracks nicely with individual software suites described here because they solve the individual needs faced by modern brands as they evolve. It also tracks with Something Digital Bullseye.

Something Digital’s Partners

If you think of the DTC playbook as the evolution of a brand as they track very closely to the software they’ll acquire, then you’ll understand the rationale behind Something Digital’s partnership strategy. We’ve formed very strategic partnerships with Klaviyo, Nosto, Klarna and Yotpo because these software suites allow a single operator on the brand side accomplish what it would have taken a team of ten to do a decade ago. Much of that boost in productivity is a direct result of automation, and interoperability between these tools.

Growing your marketing skills and ability, and acquiring the right toolset is paramount to growing your brand. Don’t be alarmed or frustrated if you find yourself bumping up against the limits of your existing tools. It simply means it’s time to evolve.

If you need help building your DTC brand reach out to us, we’ve helped tons of other brand grow their business.

Phillip Jackson

A multi-instrumentalist, Phillip is an avid collector of vintage guitars, keyboards and amplifiers and has a home studio located in West Palm Beach.