Are you looking for actionable ways to take your DTC brand’s customer acquisition strategy to the next level?
In a recent webinar with RETHINK Retail, Matthew Adam Smith sat down with CEO & Founder of Nift Elery Pfeffer and CMO of Firstleaf Geoffrey Sanders to discuss how retail brands can diversify their marketing strategies specifically to acquire net new customers. The discussion also dives into key findings from Nift’s latest ebook, 2024 Marketing Channel Diversification Report.
In this blog, we’ll cover the highlights from the webinar, including:
- The state of channel diversification
- Specific challenges that DTC and retail brands are facing
- How to utilize testing and optimization effectively to achieve your goals
- Why alternative marketing channels are gaining popularity
- The role of personalization in DTC marketing
Follow along and listen to the full webinar here. Let’s dive in!
What is The State Of Channel Diversification Today?
Marketing channel diversification for DTC brands has become both a necessity and a challenge in today’s ecommerce landscape. Diversification is crucial for several reasons:
- Rising Costs of Traditional Channels: DTC brands face increasing customer acquisition costs (CAC) on platforms like Meta (Facebook) and Google due to high competition and algorithm changes.
- Privacy Regulations and Tracking Challenges: With privacy policies such as Apple’s App Tracking Transparency (ATT) and GDPR, brands have limited access to consumer data, making traditional digital advertising less effective.
- Shifting Consumer Behavior: Consumers now expect to engage with brands across multiple touchpoints, including social media, marketplaces, and email.
Marketers everywhere need help hitting their KPIs and ROAS goals.
“Great marketers are chained to traditional channels like Meta and Google. But there’s been a significant push over the last 18 months to diversify your marketing channels. In our recent survey, we discovered that 74% of DTC marketing leaders plan to market on five or more channels to hit their CPA or ROAS goals. And, to my surprise, the average number of channels that marketers use is 8.5.” – Elery Pfeffer
Nift’s research shows that marketers essentially need 5 channels to hit their KPIs, and 3.5 channels to ensure their CPA and ROAS are safe. At First Leaf, Geoff Sanders and his team actually utilize 12 channels to achieve their goals.
“More channels don’t necessarily yield greater results, but limiting risk is important. Not diversifying exposes your business to a tremendous amount of risk. What’s next after iOS 14.5? What algorithm changes are we in store for? If most of your business is driven by that channel, you could be in trouble.” – Geoff Sanders
Diversification is no longer optional for DTC brands looking to scale. It requires strategic planning, robust tracking systems, and an adaptable approach to remain competitive.
Measuring The Efficacy of Marketing Channels
If you’re new to diversifying marketing channels, it can be challenging to measure the efficacy of your efforts. As a marketing leader diving into diversification, you should be focusing on two things: delivering on performance goals and testing future channels to drive growth and limit risk.
While evaluating marketing channels, DTC marketers need to have the answers to several questions, including:
- How does this opportunity fit into your overall media mix?
- What is your team’s hypothesis?
- Why is this channel worth your time?
- What are the impacts of other channels?
- What is the minimum amount of money you need to spend to get a result?
These questions should lead to a clear measurement plan.
“In theory, you can test anything, but you can’t test everything. DTC marketers need to focus on building the process and discipline to drive results.” – Geoff Sanders
It all boils down to strategy. Adding a marketing channel to your mix is a strategic choice.
In any marketing campaign, there are several things you can test, such as ad creative or new audience segmentation. These changes can improve campaign performance, but oftentimes, adding another channel is the catalyst for future-proofing your brand. Ad creative variation is necessary but doesn’t necessarily help your business scale and grow.
“Marketers absolutely need a strategic mindset, but they also need to place their bets on something that actually works. At Nift, we intentionally built our platform to be supremely easy to test so marketers don’t have to spin up a new production team just to test if a channel is scalable.” – Elery Pfeffer
Tapping Into Alternative Marketing Channels
Meta and Google hold significant value, but alternative marketing channels are rapidly gaining popularity. The escalating costs of advertising on traditional marketing channels, driven by intense competition, have significantly raised customer acquisition costs. So, brands are seeking alternative channels that offer more cost-effective opportunities to engage with their audiences while navigating the growing limitations of traditional digital advertising.
“When marketers start evaluating yet another channel, they are skeptical—and for good reason. Because let’s face it, most experiments fail, but Nift, as an alternative marketing channel, is seeing a lot of success.” – Elery Pfeffer
Additionally, alternative marketing channels align better with shifting consumer behaviors and preferences. The goal of any marketing strategy should be to go where your customers are.
- How do your customers like to consume content?
- Where are your customers spending the most time?
- What type of information resonates most with your customers?
Social media platforms like TikTok and Pinterest enable brands to connect with niche, highly engaged audiences through visually rich and interactive content. Influencer marketing has also gained traction, as consumers increasingly rely on trusted creators for product recommendations, offering brands authentic engagement at a fraction of the cost of traditional ads.
“Your brand doesn’t have to be on every social media platform. To me, that’s not an important KPI. Your focus as a DTC marketer should be discovering where your customers spend a lot of time. TikTok is an extremely popular channel, but for First Leaf, it’s not the right one for our goals as the platform hasn’t accepted alcohol advertisers.” – Geoff Sanders
By diversifying their marketing efforts, brands can achieve greater reach, improved ROI, and deeper customer relationships, positioning themselves to thrive in a dynamic digital landscape.
Are Brands Getting Too Personalized?
Consumer privacy and perceived intrusiveness are two of the main concerns with personalization, but when done intentionally and correctly, personalization can be a key revenue driver.
Personalization is vital to DTC brands because it fosters deeper connections with consumers, driving loyalty and long-term value. For First Leaf, personalization is at the heart of everything they do.
“In any given month, roughly 98% of the boxes of wine that we ship are truly unique combinations of wine. That’s true personalization in action.” – Geoff Sanders
Personalization is just as critical to the Nift platform.
“We acquire our consumers from a closed ecosystem of premium consumer apps. So when you buy your tickets through Ticketmaster or upgrade your Tinder membership, you get a Nift card. We then match you with the right business and show each consumer six categories to choose from. It’s unique to every consumer and their unique preferences.” – Elery Pfeffer
Personalized experiences—whether through tailored product recommendations, targeted marketing, or customized shopping journeys—make customers feel seen and understood, enhancing satisfaction and trust. This approach boosts conversion rates by presenting the right products at the right time and increases customer lifetime value by encouraging repeat purchases and stronger brand loyalty.
The Trend Taking DTC By Storm: AI
Artificial intelligence has infiltrated all areas of DTC and retail marketing. This technology is being used to quickly and efficiently extract consumer insights, personalize marketing and sales campaigns, analyze market trends, and more. But despite all of the power AI has to offer, it can’t replace how you test new channels in diversification.
“An organization has to have a complete understanding of what they’re putting into an AI. Just because something hits your CPA target or doesn’t hit your CPA target, you can get all sorts of results from AI. How do you know what creative is working or not? What are the different feature importance factors that drive AI to make whatever decision it makes? AI absolutely has a super strong role in marketing, but brands need the discipline for how to use it.” – Geoff Sanders
Elery agrees that AI will become more influential and powerful over the next year.
“I think the worrying outcome with AI is that large platforms are going to gain even more control. AI can absorb some of the work done by marketers and create high-performing, relevant ads. It’s going to give more control to the big platforms and less control to the brands.”
Future-Proof Your Brand With Diversification
In the dog-eat-dog world of DTC marketing, diversification is the key to continuing to grow and scale your brand. Listen to the full webinar to learn more about personalization in DTC marketing, the role of first-party data and cookies, the value of KPIs, and more.
For more insights on marketing channel diversification, download our free ebook, The 2024 Marketing Channel Diversification Report. In this ebook, you’ll learn about:
- Trends in channel diversification
- Challenges DTC and retail brands are facing
- Testing, optimization, and first-party data
- The rise of alternative marketing channels
- 3 critical KPIs you need to measure
- 5 future trends in DTC marketing
