9 Must-Have DTC Metrics for 2024
Sep 27, 2023
10 min read
In the wake of the COVID-19 pandemic and the ensuing lockdowns, businesses have had to reevaluate their strategies for getting products into the hands of consumers. This shift in approach has led many to adopt the direct-to-consumer (DTC) model, which allows companies to sell their products directly to customers without relying on traditional intermediaries.
As the popularity of DTC continues to grow, the competition within this space is becoming increasingly intense. In such a competitive landscape, even minor missteps or oversights can have far-reaching repercussions for a brand's success. It's crucial, therefore, for companies to not only keep pace with the market but also to focus on their own growth and adaptability.
To help you navigate this dynamic terrain, we've compiled a comprehensive list of key DTC metrics that should remain at the forefront of your business strategy. These metrics will serve as vital signposts, guiding your efforts toward sustained success in the DTC arena. You can explore them in detail with formulae in this DTC Metrics Template.
DTC Metrics That You Should Be Tracking
Customer Lifetime Value (LTV)
Customer Lifetime Value is like predicting how long a friend will stick around in your life, except in business terms. It's the total amount a company expects to earn from a customer over the course of their relationship. This helps in understanding not just how long a customer might stay with you, but also how much they're likely to spend.
For instance, if a company offers a subscription service where customers regularly receive products, keeping an eye on LTV is crucial. If a bunch of customers start canceling after a certain period, something's amiss. It might be time to adjust pricing, improve the product, or offer extra features.
Conversion Rate
Conversion rate is like measuring how many window shoppers in a mall actually end up buying something. It's about figuring out the percentage of people visiting your site and then going ahead and making a purchase. This metric can also be applied to free trials – how many actually convert into paying customers once the trial period is over.
If a company is putting money into their website to attract potential customers, tracking the conversion rate tells them if it's worth it. If the conversion rate is low, it's time to dig in and figure out why and what can be done to improve your conversion rate.
Average Order Value (AOV)
Average Order Value is like finding out how much your average dinner bill is when you go out with friends. It's the average amount a customer spends every time they place an order. This metric is calculated by dividing total revenue by the number of orders.
Focusing on increasing AOV can help a company directly impact its profit margins. A quick trick to upping AOV is setting a free shipping threshold just slightly above the AOV.
Churn Rate
Churn rate is like keeping track of how many plants in your garden aren't making it. It's about the number of customers who leave a product over a specific period. This is super important for subscription-based companies because it shows the health and momentum of their subscription plan.
High churn rates affect other metrics like Customer Acquisition Cost (CAC), Monthly Recurring Revenue (MRR), and Customer Lifetime Value (LTV). If churn is high, it's a red flag. Time to figure out why and how to keep customers on board.
Customer Acquisition Cost (CAC)
Customer Acquisition Cost is like counting how much it takes to make a new friend. It's the total expense of gaining a new customer and it involves the efforts of various teams like marketing, creative, growth, customer experience, and engineering.
CAC is most important when looked at in relation to Customer Lifetime Value (LTV). Ideally, you want your customers to spend more than what it costs to acquire them.
Monthly Recurring Revenue (MRR)
Monthly Recurring Revenue is like knowing how much money you'll get from your job every month. It measures the total predictable income a company receives on a monthly basis, which is especially crucial for those offering subscription services. If a DTC company isn't calculating MRR, it might be missing out on understanding its true growth potential.
Keeping tabs on MRR helps in gauging a company's overall growth and momentum. It's a compass for understanding the health of the business model, setting goals, and figuring out how to reach those targets.
Product Margin
Product Margin is like figuring out how much profit you make from selling a homemade craft. It's calculated by dividing the cost of making the product by the price at which it's sold. This doesn't include expenses like shipping, handling, or discounts - it's purely about how much profit you make compared to what you spend on the product.
Net Promoter Score (NPS)
Net Promoter Score is like asking your friends how likely they are to recommend a new restaurant they tried. It's a metric that measures customer loyalty and how likely they are to become brand advocates. This is particularly relevant in the DTC space, where brand promotion through influencers is on the rise.
NPS helps in understanding if customers are naturally spreading the word about a product, which is gold in marketing. Calculating NPS and gauging customer satisfaction reveals what kind of marketing and advertising efforts are happening post-purchase.
Net Revenue Retention
Net Revenue Retention is like checking how many of your neighbors still use a shared community space over time. It's about measuring the continued use of a product or service. For companies with a subscription model, this is especially crucial.
It's not as important for one-time purchases, unless you're keeping track of how frequently customers come back for more.
These metrics are like a toolbox for businesses. They help in understanding the health, growth, and potential areas of improvement in a DTC model. Keeping a close eye on these can help companies adapt to changing circumstances and thrive in a competitive market.
In Conclusion
The direct-to-consumer approach revolutionizes the buying process by bypassing traditional stores and middlemen. Its significance surged during the COVID-19 pandemic, propelling a rapid digital transformation. Today, an increasing number of companies recognize the advantages of DTC, demanding heightened competitiveness.
Keeping a vigilant eye on your metrics is imperative to thrive in this landscape. To understand better, you need to download our DTC Metrics Template. Remember, customer retention should never be an afterthought. Proactively implementing strategies to maximize growth and revenue is key.
For expert guidance in optimizing your DTC strategy, consider reaching out to Saffron Edge. Their specialized expertise can propel your business toward even greater success in the direct-to-consumer market. Don't hesitate to take the next step towards a thriving DTC model with Saffron Edge.
Hire a Virtual Marketing Officer (VMO) to Set up Your Account-Based Marketing Strategy
Account-Based Marketing (ABM) has very quickly evolved from the “new thing” in marketing to the need of the hour for all businesses. Its rapid growth can be credited to the fact that it expedites your marketing initiatives and makes good use of the company’s data, time, and resources. The structure of ABM is such that it can help businesses navigate through complicated deals with ease. The factor of providing the right value to each customer stands true in lieu of ABM. Patience and persistence are the words to go by for incorporating ABM in your marketing plan. However, a Virtual Marketing Officer (VMO) comes equipped with tools that can cut the strain off of the discipline and rigor it takes to target the right accounts. By working per the needs of sales teams, VMOs are able to determine the scope of growth for existing accounts and can also help them target new ones. Personalized content is the core of ABM and in order to develop an aesthetically right message, it is imperative to utilize the data sales teams have at hand. Here we have a list of components VMOs use to accelerate the implementation of ABM in your marketing plans- Align sales and marketing A key aspect of the implementation of ABM is to create alignment between the sales and marketing teams. VMOs overcomes the challenges of mapping and managing effective communication between the teams by creating a strategic channel at the account level. Now, if you look at it from a macro perspective, you will realize that this strategy enables segmentation and communication with greater ease without having to overburden the teams into diverting their flow of communication. Tying up of territory-level sales activities with your marketing strategy can effectively reduce the time and effort required to reach a goal. This can only be achieved when the sales and marketing teams are perfectly aligned and in sync with each other. Some activities that can bring in this alignment are hosting shared training sessions, collaborative meetings, and such. Segmentation of accounts ABM works towards targeting the right audience with the help of strategically devised tactics. Segmentation of accounts enables you to significantly improve your campaign results and increase personalization. It is imperative to have a definitive framework to segment your database in such a way that it complements your marketing strategy. By focusing your delivery value largely on activities and messages targeted to specific segments, you can achieve effective results. Some of the basis of segmentation include categorization based on- Classification of company Size of the organization Annual revenue Current spend Projected spend Products bought Opportunities that are open or closed Geography Segmentation of your accounts ensures effective messaging and helps in simplifying execution at all levels. ABM can only help you if your audience is resonating with your content and segmentation can help you in refining your approach. Most VMOs have automation tools that can help with the segregation based on uniquely defined account-related information. Automation plays ABM programs yield effective results only if the coordination between sales activities and marketing plays is in place. VMOs target to achieve measurable results and automation is what helps them align their efforts. Automation tools guarantee efficient workflows at all levels be it program, campaign, or territory. They can provide palpable insights into the effectiveness of our strategies with flow-based alerts, follow-ups that are pre-programmed, alignment of tasks, and such. Not just these, automation in ABM enables- Definition of ABM strategy Alignment between targeting audience, creating messaging, and execution Tracking results Continuous and rigorous optimization A comprehensive marketing strategy can struggle to take root because it requires additional planning and execution which can be strenuous for the already overworked sales and marketing teams. This is where a VMO steps in and helps organizations in developing the tools required to automate the process and take control of core ABM strategies. Evolve per needs The final component to drive an ABM campaign is constant evolution and optimization of the marketing approach. Taking up consistent review sessions and measuring the performance bi-weekly or monthly is what VMOs suggest. This way they ensure the delivery of your campaign is efficient and the experience of targeted accounts is on point. Working in sync with the sales team allows VMOs to utilize the data of different segments and create a thorough segmentation system. The data collected by the sales team also helps in focusing the efforts per the needs of the audience. Source-Unsplash Now, with the key components in check, let’s move on to growing your ABM strategy. Here’s what VMOs recommend to help you- ABM- Strategy, not tool Adoption of ABM is not like any other marketing tool, it requires precision and changes on the organizational level. Thoughtful planning and effective use of data are the two components that can ensure you are targeting the right accounts. The process starts off with your sales team categorically dividing the accounts based on their territorial knowledge. Then comes the task of data utilization; by working in line with the sales teams you can analyze the customer trends and then strategize on the ways to target them and build a rapport. Then comes the usage of automation; you can simply use marketing tools to brush through details of your latest mega deals, be it a success or not. These details will then help you in analyzing the wins and losses from a microscopic perspective. Once you are through with the comparison, you will have a proper analysis of the factors of dos and don’ts. ABM allows you to optimize your messaging and build better relationships with your clients. It acts as a channel between sales and marketing and allows both teams to fully explore its potential. Identifying key customer profile Another significant aspect of your ABM strategy must be to build a kay customer profile. Now, these accounts to you may feel like the ones that will get on board the earliest. Well no, these are the ones that have the most likelihood for staying the longest with you. The development of key customer profiles is another process altogether, it requires you to analyze your alpha clients and map them for similarities. The data mapped will be on the basis of industry, size of the company, region, technology, and such. Once you are able to determine the similarities, it will get easier for you to target the right accounts. High-relationship clients are invested in their customer relationship and this is what can help you in making more strategic decisions about them. You can start by analyzing the needs of their customers and work towards making them more efficient in terms of reaching their goals. If you’re successfully able to evaluate the client and their customer profile, you will easily be able to nail your key customer profile as well. Internal engagement The alignment of sales, marketing, and other departments of an organization is of utmost importance- this is one fact that simply cannot be stressed enough. However, implementation of such an effective channel of communication requires persistence and constant management and that can be extremely difficult to achieve especially in larger corporations where the data flow is abundant. Internal engagement can be increased by laying focus on complementary training sessions for divisions that are to work together, seminars that showcase the importance of such a channel of communication, and activities that help both the teams in seeing the benefit of complementing each other. The fact that humans can be extremely competitive especially in a professional environment simply cannot be overlooked in a scenario such as this. And, this is why it is encouraged to instil the benefits of team-work and alignment in the organization. The future of marketing is ABM. It may evolve just like everything else but the core values that ABM brings in focus towards a wholesome approach that incorporates finding new accounts, engaging with them interactively, winning them over with your strategies, and driving mutual growth. This never-ending process is what will help your organization scale to the heights you have always dreamed of. Reach out to us today to know how VMO can help you with a tailor-made marketing plan and ABM strategy. ...
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4 Branding Mistakes you should avoid in your Business
Your brand is very important that you should build it deliberately and thoughtfully. No matter what your business is about, branding can break or make your business. Every business should know why branding is important and why it is needed for a successful one. Branding is something which not only creates loyal customers but it also creates loyal employees. It is helpful for the employees to understand the purpose of your business. Whether you already established a business or you have started a new one, some mistakes are unavoidable. Let's take a look of top four branding mistakes you should avoid in your business. 1. Fail to understand your audience Understanding your audience is the first and most important aspect of any business. If you fail to understand your target audience, you are making a big mistake. Before establishing any brand, you should understand the demands, expectations of your audience and the things they easily identify with and the types of brands they usually favour. Once you understand your target audience, messaging and branding for your business will become more easier. 2. Fail to research your competitors This is very essential, if you have established a new business. Researching about your competitors help you to understand what they have done before and how they did that. This helps you to get inspired and by this you can also find out how you can make you brand stand out among others. Your research should include services, products, websites, target audience and social media platforms. 3.Fail to focus on user’s experience Not placing enough focus on the user or borrower experience is one of the biggest mistake people make, especially when they start a new business. Having the right product or service is extremely important, but this should never overshadow the experience your audience should have through the purchase of your products and services. People usually connect more with experiences than products. Be sure that the experience should be memorable and smooth as their are many products available in the market, competing with each other to people the needs of your target audience. 4.Fail to keep your brand consistent One of the best thing that has an excellent impact on your business is your brand consistency. Brand consistency helps builds loyalty,familiarity and most important credibility. It is almost everything what your business needs, you can't build a brand strategy without consistency. Try to be consistent with your business promotions, communication, personality and other interactions you make with your target audience. Conclusion Managing a brand is not an easy task, it requires a lot of efforts and hardwork. It is essential to understand that your business is much more than its services and products. Success of your business depends on the way you shape the experience of your users. If you are planning to keep your business going for a long term, you should avoid the above described four common branding mistakes. For more information related to branding, get in touch with us ! ...
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Ten Must Skills You Should Look For In Your Virtual Marketing Officer
In recent times, the world has made a paradigm shift to digital platforms, and it has notably impacted the way businesses market their products or services. The proliferation of smartphones, the rise of the internet, and the influx of online shopping have played a huge role in changing the way we eat, talk, buy, research, and gather information. There are 5.112 billion unique mobile users and 3.484 billion unique social media users around the globe presently. With the advent of advanced tech, the only way for businesses to reach the top is through the course of these digital platforms and the charter of this course will be your marketing officer. However, developing an in-house team can strain your finances. Now, in such a scenario, Virtual Marketing Officers (VMO) are your best bet. A VMO works beyond the fundamental duties and envisions strategies that get you a competitive edge without draining your resources. Various types of technical and analytical skills continue to proliferate for VMOs in today’s day and age. Use of AI, incorporation of Machine learning, leveraging big data, all these new skills are gaining importance in the world of digital marketing and for the VMOs as well. With a VMO you get not only your Marketing Head but also a full-fledged team.Now, how do you make sure the VMO services offered by a firm are competent and scalable enough for you? To make things easier, we have compiled a list of the top ten skills that you will need to look for - Understanding of Paid Social Media With paid social media ads-spend reaching $43 billion by the end of 2020, it becomes crucial for your VMO to have a good hold on different types of social media advertising strategies. An ideal VMO will be well versed in paid social media advertising on popular platforms like Facebook and Instagram, especially when there are more than 3 billion companies that advertise on Facebook. A VMO should have an in-depth knowledge of both analytics and insights for all social media platforms and should be able to build a unique and engaging experience for your custom audience base, all the while, experimenting with his creative strategies. There is a myriad of cost-saving opportunities on social media platforms, and your VMO should be able to make the most out of them. Technical Competency No one can make it into the world of marketing without solid technical competency. A modern-day VMO is required to have a thorough knowledge of modern-day technologies as they are an essential part of today’s digital world. Any marketing team works along with professionals from various domains ranging from business intelligence and content creation to web development and data analysis. A VMO must understand the correlation of work between all these people to make the marketing efforts successful. You will be surprised to know that almost half of the modern-day marketing professions require technical skills along with field experience and the same should be expected from your VMO as well. Data Analysis If you keep tabs on the digital world, you might be familiar with the word big data, a hot topic of debate for marketers. However, it is not just big data that is being paraded down marketing alleys but also the usage of available data within an organisation. The efficiency of analysis of the said data can significantly increase the chances of success for your marketing campaign. An ideal VMO knows exactly how to leverage data and draw out strategic campaigns. Indeed, a VMO can never become a data scientist, but he is required to have a basic understanding of different types of data and how to utilise the insights and patterns drawn from it. Knowledge of AI and Machine Learning With the AI market growing to become a $190 billion industry by the end of 2025, there is no surprise that it has made its way to marketing as well. Go by Gartner’s Hype cycle for digital marketing and advertising and you will realise that all the expectations related to the incorporation of AI in digital marketing have reached new heights in the last year. By taking advantage of modern-day technologies like machine learning, a VMO should be able to easily achieve marketing-specific goals like tracking real-time customer experience or keeping tabs on spending across various channels. In addition to this, AI can be used by the VMOs to streamline automated content tagging and personalisation on a real-time basis. Source: Unsplash Email Marketing A VMO should be a remarkable email marketer as for every $1 you spend on email marketing, you get $42 in return, and this is one of the highest ROI generated from any digital marketing campaign. The VMO should have comprehensive knowledge of creating an enticing email marketing campaign, and they should be well versed in building a quality email list as well. The attention span of emails is concise, and that’s why the VMO will need to be good at making people succumb to opening the email and clicking on the CTA. Video-Based Marketing Videos are the new king of content. Videos on the digital platforms generate 12 times more share than any other type of content, and therefore, your VMO needs to be exceptionally good at social video marketing. A VMO will need to don scriptwriting and advanced video production as well. Your potential VMO should be well versed in creating videos that don’t only engage the audience but also create leads. In addition to this, a VMO also needs to have a basic understanding of how videos work on different types of social media platforms. Mobile Marketing With the introduction of the Mobile-First Index by Google, you must already be aware of the importance of strengthening your digital presence on mobile devices. Therefore, a VMO needs to master the art of mobile marketing to stay relevant in the industry. An impeccable VMO will have the know-how of strengthening your presence on mobile platforms and optimising the website so that users on different mobile devices can easily view it. Knowledge of Drip Marketing Campaign When it comes to lead generation, inbound marketing can do wonders. Numerous marketers can easily come up with a unique CPC campaign. But, what you need to look for is a marketer that can examine the incoming data and build a robust drip marketing campaign. Building a drip marketing campaign is all about personalisation and well-written communications. So, make sure that your VMO is not only good at creating the CPC campaign but is also able to use drip marketing in the best possible way. Account-Based Marketing Approach The world of marketing is being led by account-based marketers where the right message is sent to the right person at the right time, and this is why ABM is proving to be successful. A VMO needs to be thorough with his ABM approach and be able to channel the given resources to make the best out of it. With the use of ABM, VMOs can push the marketing campaign to not only a single person but to several decision-makers in the buying process. Customer Data Security, Privacy, and Data Governance The involvement of some of the biggest names in data breaches has made people lose trust in companies for protecting their information; This is the main reason why only 25 percent of the people believe that a company can handle its data with ethical responsibility. If you don’t want to lose your precious data, go for a firm that has the right knowledge to act as the most vital guardian of the private information of its customers. In addition to this, a comprehensive understanding of cybersecurity hygiene and usage of critical customer data is also a crucial aspect to look for in your VMO. An ideal VMO can act as a magic wand for your business and this is why you need to analyse potential VMOs on the parameters as mentioned above properly. The skills of VMOs have evolved a lot in the past couple of years and the need to move beyond the fundamental skills has risen. Saffron Edge offers the best VMO services with qualified marketing professionals backed by a team of exceptional content writers, market analysts, and much more. Connect now to know more. ...
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