Andrew Penny, September 2 2021

How to Set up a Direct to Customer Sales Channel

For many new companies, selling direct to the customer is quite natural. However, if you run an established company, you might be asking yourself how difficult will it be to set up a direct to customer model. This is the fourth in a series of articles on D2C. In previous articles we’ve looked at the factors that make D2C possible, the non-cash benefits of D2C, and the increase in margins it brings. This one explores how to set up a D2C approach.

When most people think about D2C, they think about the sales process - “closing the deal”, so they focus on awareness creation, customer engagement, chatbots on the website, payment engines, etc. While this may seem straight forward, we need to remember that each client’s ‘buying journey’ is unique. In a Face-to-Face (F2F) situation, the company representative can modify their presentation. In a D2C environment, the technology needs to allow the buyer to choose their own path.  Individuals buy differently from corporations; large companies buy differently from small ones. Each country has its own culture which again affects buyers’ journeys. 

And, if you want to go further, individuals can be segmented based on psychographics such as age, digital native, male, female, etc; this is why we are such fans of highly focused market segments and tight positioning. 

Closing the deal is just the beginning. How will you replace all those other functions that your sales channel used to perform or contribute to? Each situation is unique and requires a unique approach. However, remember that you have, in all probability, more than doubled your gross margin per unit - now is the time to spend some of that.  Here’s how: 

Shipping / Logistics.  Amazon broke down all the barriers in shipping stuff almost anywhere in the world next day. Amazon offers their logistics systems as a service that you can use. And many other providers are stepping up to compete with them. Regional warehouses with three-day delivery are a no-brainer. 

Installation. “Idiot proof” products designed for easy installation or integration are a good first step. ‘How to’ videos also support buyer installation. If that is not possible, then contracting with local service providers for ‘as needed’ service is a good back up; you train them with Videos and support them with Augmented Reality (AR). 

Warrantee claims.  Photos and video chat are good ways to validate a claim. But be generous - you have the margin. Not nit-picking warrantee claims is a great way to build your brand and secure client loyalty (and referrals). 

Service. Videos of every type of repair will support DIY clients and any techs they hire to help them.  An added step is the use of AR (point your camera at the item and AR adds notation, part numbers or whatever is appropriate). Great for diagnostics and, when shared live with a factory rep, is very effective. 

Parts.   Most of our clients are worried about getting replacement parts to keep their products running. Again, with an ‘Amazon-like’ logistics system, parts can be next day - almost anywhere; one client reported using regional warehouses and last mile delivery via Uber… 

Each situation is unique, but I encourage you to explore how you can adopt D2C. The way the world buys has forever changed. Make sure you don’t get left out. 

See you next time with an article on Adopting D2C when you currently depend on channel partners. 

Written by

Andrew Penny


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