By eliminating the middlemen DTC brands enjoy larger profit margins and access to a lot of customer data
Marketers are fascinated by DTC (direct-to-consumer) brands because of their direct relationship with consumers and ready access to their data. This helps them calculate customer acquisition costs and projected lifetime (LTV) better than companies that depend on intermediaries.
These distributor-independent brands are increasingly becoming famous for their perceived data richness. But the author states that, while DTC brands have customer information like transaction details and location, the real-time behaviour of consumers is still untraceable.
Their LTV projections are made based on how the brand acquired the user and the user’s action on the brand’s website and app only. But it is hard to track behaviour off the app and find the consumer’s potential, affection and behaviour towards other competitor brands.
[3 minute read]