The appeal of the direct-to-consumer movement is simple: by selling to consumers online, you can avoid excessive retail markups and offer some combination of better design, quality, service, and lower prices because there is no intermediary.
The pitch makes so much sense that since 2012, 400-plus DTC startups in the United States have collectively raised $3 billion in venture capital, with about half of that funding doled out in 2018 alone.
The flipside of all this cash is that it’s created an environment where customer acquisition costs (CAC) via digital marketing channels like Google, Facebook, and Instagram continue to rise. SmartyPal tried to expand its acquisition through Facebook and saw its CAC go from $60 to hundreds of dollars.
It’s why smart DTC brands are focusing more on text message marketing. (Modern Retail even went so far as to call SMS the new email for DTC.)
In this article, we cover some brands positioning SMS at the core of their marketing strategy and explain why it’s become a profitable, scalable, and less-competitive arena for companies to connect with their customers.
When you read about the merits of text marketing, it’s usually the 98% open rates, 45% conversion rates, and high click-through rates mentioned.
Don’t get us wrong–they’re all reasons DTC brands send more texts.
But a lot of consumer brands look at it as a way to keep a conversation going with customers and foster a deeper relationship.
As people have to provide express written consent to receive your texts, they’re offering you access to the same space as close friends and family.
Companies facing increased competition in saturated markets that range from cosmetics to athleisure can connect with customers on a personal level. It’s why many DTC retailers are taking a conversational, brand marketing approach to SMS.
That’s not to say there aren’t brands using it to share content and promotions. That’s one of the advantages of SMS marketing: it’s flexible and can help you achieve a broad range of goals.
We picked five brands that use SMS in different ways to communicate with customers. These companies will hopefully give you some ideas for your direct-to-consumer text message strategy.
Judy brands itself as “a new line of ‘ready for anything’ digitally connected emergency kits to make safety simple.”
We already highlighted Judy in an article on creative SMS marketing campaigns. We’re calling them out here too because texting is a central element of their overall DTC strategy.
Judy has a dedicated messaging team of six that work on texting its tens of thousands of subscribers.
Customers are asked to provide a phone number so Judy can text them with updates and tips, like when it’s time to change the battery in their carbon monoxide detector at home.
As the New York Times put it, “It’s not just about the kit, but also the customized content and education they offer.”
Versed is another example of a direct-to-consumer text message marketing strategy we’ve covered before in an article on non-promotional content. The DTC brand offers a text message-based hotline for all things skin.
Three employees on Versed’s 20-person team compiled a glossary of hundreds of questions commonly asked of the skin-care brand, and manually handle the service for now.
The team addresses questions related to general concerns about issues such as the difference between an oil and a serum, when to apply products, and how to reduce a zit as quickly as possible.
They look at the number of engagements with the hotline, the frequency of questions asked, and the percentage of people who are repeat hotline users.
The idea is that SMS interactions inform Versed about customer’s needs, an invaluable source of market research.
We wanted to include a direct-to-consumer text message strategy that is more traditional in its approach.
Using our Mobile Sign-Up Widget, the team advertised a 10% off discount for new subscribers. When a website visitor clicks on the “GET 10% OFF” button, their native text app opens with the keyword and number prefilled. All they have to do is tap send.
Beyond sales, the conversion rate for website traffic increased by 200%, and Toroe’s SMS subscriber list grew by 22%.
Conversational commerce has taken the world of e-commerce by storm. We think nothing of chatbots that help us complete transactions within Facebook Messenger or when Alexa gives us an update on when that pair of boots we ordered will ship.
Increasingly it’s also SMS concierge services guiding us through higher-end purchases.
Empathy Wines is an excellent example of conversational commerce in action. Gary Vaynerchuk, also known as Gary Vee, created the company to offer a new way of selling high-end wine.
Customers who purchase 12 bottles of each of the three wines will benefit from Club Empathy, which includes an on-demand text-based “sommelier” service, for any wine need a club member has.
The concierge provides everything from a Pinot Noir recommendation for a picky father-in-law, or help in booking top wine tastings for a Sonoma weekend getaway.
The ‘text-to-buy’ model is set to change the way we shop. SimpleTexting customer, LunkerText, is ahead of the curve.
The concept behind the DTC play is straightforward. You set up your account in less than two minutes and get a daily deal text with the best fishing tackle and gear deals.
Subscribers just respond with the number of units, and they’re all set.
As they put it, “two seconds a day to get ridiculous tackle deals delivered to your doorstep.”
Traditional mobile commerce requires customers to take multiple steps–they need to add their address, set up payment, and sometimes even create an account. All these steps can create friction and reduce the chance someone purchases.
If all you need to do is reply with the number of units, you’ve removed all purchasing barriers virtually.
Great Jones, a startup selling pots, pans and even an oven directly to consumers, uses a similar approach to Versed.
It offers a free text message service called Potline where anyone can ask for recipe ideas, get advice when things are going wrong in the middle of the cooking process, and even get tips on how to clean up afterward.
The service was initially available from 4 p.m. to 8 p.m. EST on Monday and Wednesday evenings but has since expanded–pointing to what a success it’s been.
With the coronavirus pandemic forcing people inside, the women’s apparel brand Summersalt created a new texting experience that was all about bringing joy to their subscribers’ lives.
People text the word “Joycast” to the brand’s number to receive different types of content such as uplifting memes and activities to do during the quarantine.
Over the past several years, the direct-to-consumer landscape has shifted consumers’ attention from legacy retailers to nuanced, smaller shops.
While the competition in the e-commerce world continues to rise, brands now need to find ways to innovate or run the risk of falling into irrelevance.
Texting will play a role in this innovation by reducing friction, providing value, and setting brands apart from their peers.
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