What D2C companies need to remember when building a successful brand
At a panel discussion on powering growth as a D2C brand, panellists underlined the importance of understanding their own customers and building products and businesses around them.
“Because the [D2C] ecosystem has matured, it’s easy to start a brand and put a product out there. But how much time the founders put into really innovating and solving the consumer need — that really builds a brand in a very holistic way, in the long term,” said Dipanjan Basu - Partner and CFO, Fireside Ventures, a sentiment echoed by his fellow panellists at YourStory’s Brand Residency 2022, where hundreds of startups and brands gathered to learn about India’s fast growing D2C economy.
With the D2C industry in India expected to be worth over $100 billion by 2025, the panel discussion ‘Performance that Performs’ on how brands can scale faster was a welcome session at the two-day summit, moderated by Sapna Arora - Ex-CMO and Global Brand Head, . Dipanjan was joined on the panel by Ahana Gautam - CEO and Co-Founder, and Sakshi Mittal - Head - Growth and Marketing, ads, all of whom spoke about the importance of brands to focus on their customers' needs to build a successful business.
The customer’s always right
Kicking the session off, Ahana spoke about how being a D2C brand itself helped you have more control over your business model. “We want to be a consumer first, omnichannel brand — wherever the consumer is shopping, we want to be there. D2C is a very strategic channel, and there are different ways you can sell to the customer,” she said, adding that it was important to have an authentic relationship with them.
While Ahana and Dipanjan also raised the point of marketing your product well, and knowing when to market it, Sakshi added that targeting the right audience was just as important, saying, “Working with the right partners helps you with customer retention, which is one of the bigger challenges with D2C at the acquisition level itself. If you’re acquiring the right user it won’t be a problem in the longer run.”
Big on data
Leveraging user data would also help brands understand their customers better and build a better product for them, Ahana said, with marketing data becoming a huge driver for the same. “Track NPS (net promoter score) of customers, understand the words that they’re using (to recommend your product), and use that in performance marketing to a broader group of consumers. Everything should be fuelled by consumers and data can help you in those aspects,” Ahana said.
Sakshi also spoke about the Paytm ads platform and how it was able to help its clients target the right customers to create a loyal customer base through its various channels, explaining, “The depth of data with our platform is such that we have information on how much they’re spending, on what categories they’re spending beyond physical commerce, and how frequently they do it. That gives us an advantage over others to understand our clients’ requirements, whether it's sales or brand recognition, and to focus on different formats and targeting.”
Fundamentals of funding
Dipanjan brought his experience as a venture capitalist to the panel and advised brands and startups who were at the beginning of their startup journeys to focus on first finding the right product market fit. “As much as founders focus on building the product, the story about the consumer journey, it’s equally important to time the funding correctly. Raising too little, raising too much, raising ahead of product market fit are all challenging,” Dipanjan said.
He added companies shouldn’t be tempted to always look at getting the highest valuation and funding amounts from investors, especially in their earlier rounds. “When you do that, you’re setting the bar too high for your capital growth and you don’t focus on the fundamentals like building the brand, community, building a sticky platform. You end up burning too much to get a certain level of revenue,” Dipanjan said, adding that the right playbook for startups would be to target the amount that they actually need so they can set realistic revenue targets and build a great brand for themselves – “Once you do that, the market is yours.”
Ahana rounded off the session by telling the crowd to also hire the right people to manage your business, right from the top. “Be very clear about the kind of skill set and talent you want to bring in, and ensure that you have the right people,” Ahana concluded.