7 Ways to Scale Your D2C Brand and Boost Revenue

By Nick Pietropinto

Ask CEOs to identify their top business goal, and many will answer, “Growing my company.” Clearly, growth is a key metric of business success. But in the world of direct-to-consumer (D2C) businesses, there’s a case to be made for placing more emphasis on scaling, rather than simply growing.

Before we delve in why that is, let’s clarify what we mean by growth versus scale. For most businesses, growth refers to the amount of revenue a company adds to its coffers — typically measured every quarter. To achieve that growth, however, businesses must often grow their resources as well: for example, hire more people, invest in more technology, expand into new locations, acquire more clients, and/or secure more capital. All of which come with significant costs. As the adage goes, “It takes money to make money.”

Scale, on the other hand, focuses on increasing revenues and profit margins without substantially increasing your costs. So, for example, you scale your customer base from 100 to 1,000 clients without having to hire new people or spend substantially more on advertising. More than merely growing your business, scaling requires being more efficient in doing so.

D2C Brands Are Growing. But Are They Scaling?

There’s no question D2C businesses are experiencing rapid growth. Around 43 percent of American consumers are now familiar with D2C brands, and 69 percent of those have made at least one D2C purchase in the past year. Experts predict that by 2025, the global D2C market will reach an astonishing $1.5 trillion. Just look at Lovevery — the D2C educational toy brand — which has experienced 1,043-percent growth during the past 5 years. And they’re not alone.

The challenge is in translating that growth into sustainable revenues and profitability. Data reveals that two-thirds of the fastest-growing startups wind up failing. For instance, e-commerce fashion brand Nasty Gal enjoyed rapid growth, but failed to make a profit due to high overhead costs. And companies that have the fastest revenue growth often have poorer performance than slow-growing businesses. By no means does this mean you should avoid rapid growth. It does mean that as a D2C brand, you should be thinking strategically about how to sustain that growth while also being more efficient.

That’s where scaling comes into play. To quote Hendrith Vanlon Smith, Jr., a managing partner at Mayflower-Plymouth, “Every company that intends to grow, should directly address the barriers to scaling.”

There are many different ways to scale a business — from improving the supply chain to streamlining operations to adjusting pricing to automated processes. But for now, let’s focus on one of the most impactful strategies: scaling your D2C brand to drive profitability.

Growing a successful D2C brand in today’s fragmented, complex, and highly competitive retail landscape while remaining profitable is no easy task. It can take tremendous amounts of time, effort, and capital that eat into revenues. The good news is there are tried-and-tested methods for scaling a D2C brand without significantly increasing your costs. Here are seven best practices we employ with great results for our D2C clients.

1. Solve a Problem. Before you can scale, you’ve got to determine what problems your product solves. Defining your brand’s purpose is an essential first step to scaling its success. American economist and Harvard Business School professor Theodore Levitt said it best: “People don’t want to buy a quarter-inch drill; they want a quarter-inch hole.” So, while bells and whistles are fine and well, having a product that achieves the end-result your customers want is critical to standing out and driving demand.
   

2. Target Your Audience. Without knowing exactly who your customers are, you might as well be throwing your marketing dollars into the wind. Maximizing the cost-effectiveness and ROI of your media purchases requires identifying your ideal target audience — including their buying behaviors and the media they consume. This targeted approach allows you to spend less money while reaching more prospects, which — in turn — lowers your per-lead and customer-acquisition costs.
   

3. Broaden Your Media Mix. In today’s fragmented media landscape, investing all your media budget in single channel to reach your customers simply won’t cut it. The most cost-effective way to scale your reach, leads, and conversions is by creating a strategic media mix based on your target audience’s media habits. This mix should ensure that your consumers see and engage with your D2C brand on every channel and platform they use.
   

4. Embrace an Omnichannel Strategy. The D2C model is no longer limited to online only. Which is why your media mix should adopt an omnichannel approach that juggles digital, social, traditional, print, outdoor, TV, video, radio, in-person, email, influencer, and more — with a highly strategic cadence that you continually fine-tune. An omnichannel approach supports an elevated customer experience, while making your D2C brand seem like it’s everywhere all at once without costing you a fortune in ad spend.
   

5. Maximize Customer Lifetime Value. According to PwC’s 2023 Global Consumer Insights Pulse Survey, 58 percent of consumers are more likely to make a purchase from brands they have a direct relationship with. And McKinsey reports that D2C brands have a 50-percent higher customer lifetime value (CLV) than traditional brands. Maximizing CLV, however, requires providing an exceptional customer experience before, during, and after the purchase. That’s where having quality, trained, and well-managed call centers becomes essential to scaling while also driving revenue.
   

6. Make Data-Driven Decisions. Scaling effectively requires the agility to make fast decisions and pivot on a dime. It’s critical to make sure those decisions are also driven by data. From identifying your target audience, to creating your media mix, to adjusting your omnichannel strategy, data holds the key to maximizing the return on your brand-scaling activities. Data will also show you what’s working and what isn’t, so you can target your spend and stop wasting money.
   

7. Work With a Media Management Expert. Doing all the above can be a challenge, especially when you’re running a D2C business. Bringing in a media management expert can end up saving you a lot of money while scaling your brand with optimal success. The right partner will have a proven data-driven methodology, strong vendor relationships and management skills, omnichannel expertise, cost-saving strategies for media buys, and call center resources that drive CLV. They’ll help you maximize your media efficiencies, make faster decisions based on experience, do more with less, and boost sales while boosting your D2C brand.

The bottom line, without scaling there is no growth. At Double Diamond VIP, we offer demonstrated expertise in scaling D2C brands while simultaneously driving revenue. The two can go hand-in-hand, and our team is ready to show you how. Learn more at www.TryD2C.com.

Nick Pietropinto is the founder and CEO of Double Diamond VIP. He can be reached via email at nick@doublediamondvip.com.