First Things First 1/2: What is D2C (Direct-to-Consumer)? 

The term D2C (DTC, direct-to-consumer) is nothing other than the direct sale of goods and/or services from the manufacturer or brand. You can purchase the goods directly from the direct-to-consumer company without any intermediaries. Familiar sales channels such as department stores and other stationary stores are bypassed. Thanks to the Internet.  

It is often assumed that D2C is synonymous with e-commerce, but this is only partially true. The great advantage of D2C is obvious: direct contact with the customer is literally worth its weight in gold. If the customer is satisfied with the product, the brand is successful. That has always been the case and it still is today. What has changed is pretty much everything else. Today's customer has a completely different buying behavior, the path to the product is more complex and faster. At every touchpoint, the customer leaves behind important information that the brand can use in future interactions. With platforms such as marketplaces, Google and social media, there is a risk that manufacturers and brands will not only have to pay more and more for access to customers, they are actually giving away potential. 

However, while most manufacturers are usually tied to distributors and wholesalers, direct sales are proving to be a real competitive advantage. In direct sales, customers benefit from better prices and faster delivery times, and this side is also attractive: the direct line to the brand. The other side of the coin for companies? In any case, D2C means investment in technology and infrastructure. However, the in-house supply chain provides flexibility and offers brands unprecedented access to their customers - without any intermediaries.

First Things First 2/2: What is Customer Relationship Management (CRM)? 

CRM fundamentally helps to better understand customer needs and, ideally, to fulfill these needs. Technically speaking, it is a systematic shaping of the organization-customer relationship. 

CRM systems combine information about customers from various sources and channels, e.g. email, stores, customer care centers, app sales or marketing measures. CRM data flows between operational systems (e.g. online stores, ERP systems) and analytical systems that process CRM data. 

CRM can and should provide support in all phases of the customer lifecycle. 

Typical management issues for direct-to-consumer initiatives 

Management is faced with similar questions when it comes to the transformation to a D2C business model: 

• Which digital media and channels should we invest in to reach new target groups?

• Which technologies do we use to build and expand the online customer relationship?

• How can we generate state-of-the-art initiatives to attract and retain customers?

The answer should be CRM, as the technology that builds the bridge between customer and brand.

Why is CRM excellence important for success in D2C & digital transformation?

CRM can help the D2C company to increase sales by providing information via digital channels: 

• The right articles, products and services that actually fulfill customer needs

• Better customer service

• Improved cross-selling and upselling

• Retaining existing customers and discovering new customer groups

Again, the math is simple: acquiring a new customer is five times more expensive than retaining an existing one. With existing customers spending on average a third more than new customers, focusing on a healthy customer relationship is crucial for D2C brands to achieve sustainable growth. CRM in Direct-to-Consumer (D2C) can help realize higher margins. 

The figures show why it is important to focus on customer relationships and loyalty in the highly competitive direct-to-consumer market. However, in order to have ongoing contextual conversations with customers, brands need to address their interests and offer them added value through actionable customer insights. This is what CRM was designed for.

Customer relationship management (CRM) software helps D2C companies track every aspect of interaction with their customers. From tracking each customer's purchases and customer care interactions to newly acquired subscribers and buyers who have not yet made their first purchase, CRM systems bring everything together in one central location.

Simply put, a CRM provides any brand with a complete overview of their current e-commerce activities when it comes to customer relationships. It helps companies track ongoing conversations, identify loyal customers and recognize potential sales opportunities.

How CRM can help brands with their D2C journey? 

In DTC companies, managers can use CRM to achieve their goals with a new level of impact. The necessary data can be gathered from all relevant areas, enabling the stakeholder to utilize the entire range of marketing, commerce, customer service and content. All information about a specific customer in every interaction is used contextually (1:1 permission marketing). Especially with a view to the future, this is exactly what customers want. An almost seamless personalization of their wishes and an excellent buying experience. If this relationship is established and maintained, customers will remain loyal to the brand even in a highly competitive market.

Customer segmentation

Every customer's motivation to buy is different. While some are motivated by discounts, there are others who value exclusivity and still others who buy out of pure curiosity. Every customer is different, and this also applies to their preferences and purchasing behavior. CRM allows companies to categorize their customers into segments such as new customers, first-time buyers, loyal customers, price-sensitive customers, VIPs/loyal customers and more, based on several parameters, with easy access to relevant information.

Better customer care and service

Most sales employees only spend a fraction of their time actively selling, upselling or cross-selling. The reason for this is that they mainly focus on solving (customer) problems. Sometimes these are as simple as passing on instructions to customers or explaining the return, refund and exchange conditions. The application of lean management principles can be useful here. An intelligent CRM helps a company to optimize a number of these self-service processes (customer self service) so that the brand has more time to focus on sales.

Centralized conversations on social media

Typical e-commerce companies use at least two social media platforms to reach their audience. In fact, a large proportion of website traffic comes from social media referrals and paid campaigns. Reason enough not to sweep the communication of the different channels under the carpet! Since social media users expect a response from brands within minutes or hours, it is important to centralize, even prioritize, the conversations. An intelligent CRM summarizes all conversations in one dashboard, making it easier to respond to inquiries and leverage conversations that create lasting relationships.

Intelligent order management

For an e-commerce company, order management starts with lead generation and extends through to purchase and repeat purchases after the initial purchase. This includes the ability to store data on order placement, order processing, order tracking, delivery and customer feedback. Naturally with compliance with data protection standards, a matter of honor

Relevant CRM systems that can contribute to D2C excellence by focusing on these holistic tasks 

CRM systems that follow a holistic product vision are particularly suitable solutions here. In addition to the core tasks of campaign and customer master data management, they must also have capabilities in the areas of social media listening and customer care management, including ticket management. Typically, solutions such as Salesforce or Hubspot with their suite concept can offer relevant software here.

In conclusion, meeting the expectations of your customers as a D2C brand is a major and costly undertaking. But it is exactly what a company should be doing right now!

In summary, the text highlights the immense importance of CRM for direct-to-consumer brands and the need for an effective CRM strategy to meet today's customer demands. Choosing the right CRM system and using the right CRM software is crucial for success by helping companies to collect, analyze and use customer data from various channels such as email, social media and e-commerce platforms. This enables D2C brands to grow sustainably, increase customer loyalty and secure their competitive advantage in a digital world.