Last updated: May 22, 2024

How to Grow a DTC Brand to 8-Figures (23 Step Process)

Growth Marketing
Startup

How do you grow a D$C brand from idea to 8 figures?

 

After working with 100+ brands at my growth agency, I have seen some raise $80M and others go on Shark Tank.

Along the way, we have been taking notes from the great ones.

Here are the 23 things to do if you want to guarantee success.

 

1/ Get the Product Right. If Not, Nothing Matters.

 

How do you get the product right? It’s not about being the best. It’s about . . .

 

  1. Being different >> Atoms Shoes has 1/4 sized shoes
  2. Knowing your persona >>> HumanKind with eco-friendly buyers
  3. Solve a problem >>> Neat with Sweat

 

You don’t have to do all of this. But, you should do one of them really well.

 

 

2/ Launch on the Back of Your Flagship Product

 

People don’t fall in love with the brand first. They fall in love with a product and the brand follows.

 

What product do people talk about the most? What product has the highest conversion rate or referral rate? Start with that.

  1. Girlfriend Collective >> Leggings
  2. All Birds >> Tree Runners
  3. Neat >> The Pit Stopper Undershirt

 

3/ Solve a Real Problem

 

What problem makes customers proactively search for a solution?

 

Start with the “painkiller product” and then you can follow with the “vitamin products.”

 

  1. Kreyol Essence helps with hair growth
  2. Curology personalized acne care
  3. Neat hides pit stains and back sweat
  4. Feets going after, well, feet

 

 

4/ Focus on a Specific Persona

 

Don’t be everything to everyone. Bonus points for having a persona with low price sensitivity and high intent to buy. Bala Shoes hit $1.5M in 7 days with shoes for nurses . . . and that’s targeting one job profession. Listen to their story below.

 

LINK HERE

 

5/ Get the Business Model Right

 

Here is the holy grail for a DTC business model:

 

  1. High AOV
  2. High repeat purchases
  3. Low return rate (Beauty products > pants)
  4. Limited colors & sizes
  5. Bonus points for subscriptions (Ex: Billies) or being able to push bulk buying (Ex: Bombas)

 

 

6/ Create a Movement

 

Don’t just sell a product. Sell the dream. This helps attract early adopters and it can earn you a high NPS score.

 

  • Everlane >> “Radical Transparency”
  • Toms & Bombas >> Buy a Pair, Give a Pair

 

Leverage Bain & Harvard “Elements of Value” study for ideas on the values to use for your brand.

 

Don't just sell a product - Sell an aspiration - d2cc ecommerce

 

7/ Create (and Own) Your Category

 

Don’t promote your product. Promote a category and it’ll lift your brand.

Spanx invented the shapewear category with a simple use case. Own a category and you own the market.

 

Don't promote your product. Promote a category and it'll lift your bran - ecommerce d2c marketing

 

8/ Pick a Fight with the Status Quo

 

How do you make noise and get noticed? Take on the status quo or big brands and become the underdog.

Look at how ThirdLove attacked Victoria Secret to gain market share.

 

ThirdLove attacked Victoria Secret to gain market share - d2c ecommerce

 

9/ Build a Community Early

 

Your community can become your super power. They have a high repeat purchases, they help with product development, and you can mobilize them for launches.

Take notes from Kreyol Essence, Glossier, and LuluLemon.

 

 

10/ A Cool Product Isn’t Enough. Test Activation Tactics & Offers.

 

A “cool” product isn’t enough to get sales. Test different activation offers to give people a reason to buy today.

 

  • ThirdLove > Fit Finder
  • Curology > First Month Free
  • Mott and Bow > Home Try On Program
  • Beardbrand > Beardsman Quiz
  • Neat > Sweat-Proof Guarantee

 

Leverage the irresistible offer formula from $100M Offer book by Alex Hormozi.

Test Activation Tactics - d2c ecommerce

 

11/ Turn Your Customers into Marketers

 

Launch a referral mechanism that actually works by giving away a product that wows customers. Plus, it gets your CAC down.

 

  • Girlfriend Collective gave away leggings for a social share that got them 200k new customers
  • Harry’s gave away razors for emails and got their waitlist to 100k

 

Referral tools to use: Kickoff LabsViralloops, and Smile

Launch a referral mechanism that actually works by giving away a product that wows customers

 

12/ Invest Early in Organic Traffic

 

As you scale, you need to get your paid traffic to under 50%. SEO is a way to do that. Invest in content that captures searches for high intent phrases.

Honest Company nailed this with definition searches like below.

 

Invest Early in Organic Traffic - How to Grow a D2C Brand

 

13/ Retention is the New CAC

 

As ad costs go up, you want to invest in email, SMS, loyalty programs and lifecycle marketing to grow sales.

Create a personalized retention strategy by getting customer data with a quiz funnel or w/ onboarding.

Take it from Forerunner Ventures and their article: Your CAC Doesn’t Matter.

 

 

14/ Customer Service as Marketing

 

For high repeat purchase business models (Ex: beauty, razors, etc.), customer service can serve as a secret weapon for building customer loyalty.

 

 

Remember that every customer touch point (especially unhappy touch points) is an opportunity to win a customer over.

 

Customer Service as Marketing - How to Grow and Market a D2C Brand ecommerce

 

15/ Invest in CRO to Unlock Growth

 

Don’t waste good ad dollars on a bad conversion funnel. Invest in a CRO agency (I am biased to Growthhit.com) that does on-site tests and qualitative research for you. You could be 1 test away from doubling your conversion rate.

With NEAt, we were able to go from a 0.7% conversion rate to a 4% conversion rate while taking the AOV from $58 to $97.

 

Here is the before and after:

 

 

16/ Meta & Instagram Ad Tips

 

Too many to list but do these out of the gate:

 

  1. Connect Shopify Catalog and run these ads for anyone that abandons their cart
  2. For prospecting creative, lean into UGC & Influencer content that demonstrates the value of your product. TLDR: Show don’t tell.
  3. For retargeting creative, How-tos, social proof, and detailed product shots win
  4. Optimize for purchases and get out of the way of machine learning. At GrowthHit, we use the optimization framework from the Facebook MBA program and it’s been the best investment we have made to date.

 

Here is our demo ad that’s getting us a CPA under $20 for Neat:

 

 

17/ Google Ad Tips

 

Google ads and Facebook ads work well together when you can do the following:

 

  • Bid on your brand name (Yes, it’s annoying but protect your brand)
  • Setup Google Shopping ads
  • Do keyword mapping on the high intent but medium volume keywords

 

Also, give it 90 days before you call it. Google ads are a garden you need to nurture and grow.

 

paid search

 

18/ Don’t Reinvent the Wheel with Your Tech Stack

 

If you’re just getting started, start with the following tools and don’t look back:

  • Shopify
  • Klaviyo
  • Smile
  • Yotpo
  • Outgrow
  • Deliverr
  • Justuno
  • Shipstation
  • Gorgias

 

19/ Know Your Unit Economics, Then Scale

 

Having a health scorecard you can reference every week is key to running a profitable DTC. Here are the metrics to consider:

 

  • What is your margin?
  • What’s you’re payback time?
  • What’s your AOV?
  • What’s your CAC (blended) and CAC (per channel)?
  • Revenue per email?
  • Purchase Conversion rate
  • What is your return rate?

 

Here are some benchmarks from StoreGrowers:

 

 

20/ Your Launch Strategy Gives You an Unfair Advantage

 

For a new brand, product, or a new color, go big on how you roll it out to your audience. Here are some tactics companies deployed.

 

  • Ministry of Supply leveraged Kickstarter for pre-sales
  • Harry’s built a 100,000 waitlist pre-launch
  • Bala Shoes spoke with 500 Nurses pre-launch

 

Here are some launch examples:

 

 

21/ Do NOT Make a Growth Plan. Make a Growth Calendar.

 

The best brands are the ones that make noise every month or every 2 weeks.

How do you manage this rapid cadence of content creation, launches, partnerships, and stuints?

It’s not with a to do list.

It’s by using a Growth Calendar to plan it out. Below is an example of a DTC brand that was able to calendar out all of their marketing moments to maximize their sales.

Learn more about the GROWTH CALENDAR concept.

 

22/ Build Your Growth Strategy Around Seasonal Dips & Spikes

 

With your business, you might know that every year these two things will happen:

 

  • Q4 will be big (Over 40% of sales)
  • Q1 will be slow (Less than 20%)

 

How can you leverage this information to maximize sales?

Calendar out your launches, partnerships, & promos around the peaks and valleys to maximize sales. The best brands make noise every 2-4 weeks to hit sales goals. These brands factor in when it is demand capture season (Q4) and when it’s demand creation season (Q1).

 

23/ Build Your Growth Machine

 

To put all of this today, you need a growth machine that can manage the entire strategy. Here is a visual look at the core pieces to your DTC growth machine. It includes:

 

  • Activation Offer
  • Traffic Sources
  • Website
  • Email & SMS
  • Marketing Calendar / Plan

 

What’s not included? Layering on Amazon as a channel and wholesale as a channel. But that topic is for another post!

 

CONCLUSION:

Here are the 23 things you can do to turn your DTC brand into an 8-figure business:

 

1/ Get the Product Right. If Not, Nothing Matters.

2/ Launch on the Back of Your Flagship Product

3/ Solve a Real Problem

4/ Focus on a Specific Persona

5/ Get the Business Model Right

6/ Create a Movement

7/ Create (and Own) Your Category

8/ Pick a Fight with the Status Quo

9/ Build a Community Early

10/ A Cool Product Isn’t Enough. Test Activation Tactics.

11/ Turn Your Customers into Marketers

12/ Invest Early in Organic Traffic

13/ Retention is the New CAC

14/ Customer Service as Marketing

15/ Invest in CRO to Unlock Growth

16/ Meta & Instagram Ad Tips

17/ Google Ad Tips

18/ Don’t Reinvent the Wheel with Your Tech Stack

19/ Know Your Unit Economics, Then Scale

20/ Your Launch Strategy Gives You an Unfair Advantage

21/ Do NOT Make a Growth Plan. Make a Growth Calendar.

22/ Build Your Growth Strategy Around Seasonal Dips & Spikes

23/ Build Your Growth Machine

 

What did I miss? Let me know in the comments.

 

Want more content like this? Join my email newsletter right here. Or, check out how we’re building our own brand (Neat) because we share everything we’re doing right here.

Jim Huffman

Founder & CEO GrowthHit. Startup mentor at Techstars, General Assembly, and Sephora Accelerator. Author of The Growth Marketer’s Playbook #1

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