Direct to consumer expert Ed Hauck is back on today’s show; he will discuss how direct to consumer works and provide answers.

How do entrepreneurs make it work?

As someone who has been doing direct to consumer for over twenty years, Ed sees direct-to-consumer like a large Math problem because you can go directly to the consumer and get individual buyer behaviors and receive feedback on product – it allows you to test, test and re-test.  So, by the time you go to roll something out and invest money - you have already tested the offer, and you have checked whether someone wants your product.

To get started

The entrepreneur has to think about some things for their customers, and the most important one is to be able to predict your return on investment.  In direct-to-consumer, there is the RFM (Recent, Frequency, Money.)

* Recent -- how recently did the customer buy.
* Frequency -- the more frequent a customer buys from you, the more likely it is that they will buy again and
* Money -- the more money a customer spends with us, the more likely it is that they will be a long-term customer.

Challenges faced in direct mail and digital

On the direct mail side – it’s the availability of a list – if you’re going to mail something, then you can use your list, but you also want to grow that list. On the digital side, using pay per click or Amazon product- sponsored ads – that’s where the market becomes competitive, and there might be a price to pay for that.

Do I ever need to consider retail?

There are many examples out there of direct to consumer businesses that have grown to the point where a retail chain will reach out to the brand and say – did you know your brand is the most searched term on our internal website and we don’t sell your product – we want to sell your product.  There is a natural cross-over point as you build your business to take advantage of certain types of retail to take your business to the next level.

Stay in touch

If you have missed any episodes with Ed, please go back to past episodes – they are available on iTunes, and they are on our website the10minutemarketer.com/podcasts