D2C businesses can achieve incredibly rapid growth and impact, so often it feels like the speed at which you are scaling makes just hanging on hard enough, let alone optimizing and driving efficiencies. 

Once you are over the hump of achieving that early traction, you will be pouring money into awareness and acquisition. Ensuring that you maximize the impact early on will have compounding effects across your entire business.

At Kleene we’re big believers in creating a metric pyramid which allows you to manage your business in the comfort that you are in control and not missing important points of focus.

Initial D2C metrics

At the outset, you’ll scale growth and manage burn, so your first level of metrics will be –

Acquisition 

• CAC
• Conversion
• AOV
• Margin

Retention

• Retention rate
• Payback period
• LTV
• Margin

Metric challenges

These metrics can pose three key challenges:

1. It’s difficult to access the key information as often there’s a partial or inconsistent picture
2. People spend a lot of time assembling this data from various systems and sources
3. This data is not being shared effectively across the company, so teams are not aligned on priorities and focus

The solution

A single source of data truth and BI tool solves this – bringing all of your data together, removing silos and providing a complete overview of the business.

One of the simplest ways to initially assess effectiveness is through cohort analysis. Looking at the above metrics trended by time is useful, but splitting this out further and understanding how the different time based cohorts compare to each other will allow you to see two important things:

1. If your customer behaviors fundamentally differ as you scale – becoming more expensive to retain or decreasing AOV – this type of insight can be masked by whole estate averages.
2. Whether you are improving fundamentals over the lifecycle of the customer’s engagement – early customers ordering more frequently now than before, higher AOV. This is a fantastic way to spot issues and also to predict future growth.

Slicing this data by key dimensions is an invaluable way of identifying likely contributing factors and generating hypothesis driven actions.

While these metrics give you a birds eye view of how your company is performing and allow you to see the health and direction of the major drivers of your business, to impact these metrics using data you have to go deeper and really analyze opportunities and concerns revealed within your data.

D2C Data analysis

For most D2C businesses, keeping on top of the complexity and scale of their customer data is a losing battle. When you look at the number of customers, marketing channels, content touch points and types of interaction, it can be hard to know how to maximize impact.

Initially you want to focus on reach and getting your style of content aligned to your brand and audience. Knowing who you are as a brand, and what you want your relationship to your customers to be, is key. Once you have this right and you are scaling, you’ll need to start leveraging the power of the vast datasets you’ll be acquiring. This will allow you to compete for attention with today’s savvy customer.

Empower D2C growth through data

Ensuring that you capture the right information at the start, can make a huge difference to how quickly you can adopt powerful techniques to maximize your performance.

The following are all possible if you have a clean, comprehensive view of your customer. Each of these will deliver significant impact:

• Site and content testing strategies
• Multi touch attribution models
• Next best action prediction
• Recommendations and customer segmentation

Too often we find businesses make a decision to pursue one or more of these and find their data is so poor that they have to take a huge time penalty in getting going, to fix and then re-acquire enough data to take action.

Kleene can accelerate your journey to delivering this value. Get started to find out how.