Unlocking Repeat Revenue with Rohit Maheshwaran, Co-founder of Moda
81% of Americans are set to buy from a DTC brand by 2023. However, a lot of DTC brands have been struggling with a huge rise in acquisition costs, being unable to repeat their first customers, and also facing huge shipping. So how do they understand increasing their margins, and what kind of growth strategies should they apply to get ahead in the market and also create an impact on the customer's lifestyle?
We deep dive into this with Rohit Maheshwaran, Co-founder of Moda. A creative technologist with 15 years of experience in developing web and mobile applications for enterprises and consumers. More recently, he has been building data products for brands and enterprises that need "fuel" to grow their business.His passion is using design, technology and data to create solutions that solve problems in a mobile-first and data-driven world.
Currently runs Moda, a customer data and engagement platform designed for DTC brands.
- Why is building a Repeat Revenue strategy important for DTC Brands?
- Strategies for Repeat Revenue DTC brands should adopt.
- Complexity involved in getting started on these strategies.
- Automations DTC brands can leverage for Repeat Revenue.
Aashish: Why is building a repeat revenue strategy important for DTC Brands?
Rohit: As a DTC brand, You first have to focus on designing, creating, and manufacturing then you've gotta deal with your website, your storefront, and supply chain issues. So putting that all aside, then you have to come to the biggest part of it, which is marketing your business, which means advertising and running expensive marketing campaigns. And, it doesn't show signs of slowing down at all. So the marketplaces and advertising platforms essentially are the ones that own the customer data, right? And they are the primary acquisition channels, they have all the power, and they are also the world's largest companies today. So dealing with that it's not a sustainable strategy to keep borrowing money from these platforms.
A brand today has to focus on the main solution, which is to build out a retention marketing strategy to increase your customer lifetime value. And also to build you know, long-term sustainable growth.
Aashish: Can you dig deep more into strategies for repeat revenue DTC brands should adopt?
Rohit: From a retention marketing standpoint, I like to broadly categorize them into like five overarching categories.
1. You need to have an exceptional buying experience. So your site has to be working fast. Showcasing your products with great branding and having a seamless checkout experience by running an endless commerce stack.
2. Implementing a comprehensive customer data strategy, everything from data collection to data ingestion and data management is an imperative part of the whole strategy. Today DTC apps use anywhere between three to 10 apps within their Shopify environment. That introduces a lot of behavioral data that goes unused typically. And what you wanna do is get a full picture of the customer to be able to get the complete insights to take action. And you have to be working off a single source of truth.
3. From all this data you can deliver very meaningful and memorable and relevant experiences to your customers. Drive Messaging that builds a long-term relationship with customers. Every customer is on a different journey, they're all very unique individuals and they have different ways of buying and interacting with your brand. You must be able to do that at scale with the data that you have. Most importantly, automating everything to provide individualized customer journeys like onsite recommendations, personalized emails and SMS, and WhatsApp messages to drive them through that buying journey seamlessly.
4. Build trust and loyalty. These initiatives are designed to delight and nudge them to buy more. Building and increasing your average order value through very strategic campaigns, how people do this and having a great understanding of your customer segments, which are essentially your RFM model segments so you can know what to offer who, to nudge them through that to an increased basket size.
5. And then finally, I think more recently people are introducing subscriptions for repeat revenue. That's a strategy that everyone can implement if they have the right product that can be sold and that drives sustainable growth through repeat revenue.
Aashish: How complex does it take to even get started on these strategies?
Rohit: So your typical DTC brand is on Shopify. And thankfully they have a great selection of Apps in the app store that helps you achieve all the strategies quite easily.
Every app has its data silo. This typically means that the user has to log into that particular app and have their customer data there. And whenever apps need to talk to each other, they need to use an iPad solution or, or some kind of CDP to essentially bring that data together. Right. And so if you are a bit savvier, you might be able to buy it, it can get very complex, very quickly.
And not all apps support each other in a very seamless, real-time manner, which is critical for automation. And so with the silos, it can get pretty complex if you are going to introduce a full-featured CDP or, maybe you wanna bring your data into a specific marketing automation tool.
That is gonna require some knowledge and some learning. But overall brands know that they have to reach their customers wherever they are, and essentially be able to deliver. The whole omnichannel marketing automation experience is the most important part of everything alongside using chat, reviews, loyalty, and subscription apps that help you drive those individual strategies along the journey of the customer.
Aashish: Rohit, you mentioned a lot about automation. Could you highlight some examples of automation that DTC brands can leverage?
It starts with understanding the customer journey. So somebody landing on the website is when you first can capture their attention and start capturing the data and to be able to nudge them to their next desired step in the journey.
- From the first visit, you must have a welcome automation flow that essentially shows a form for data collection which typically gives them a discount on their first purchase.
- And then you have your abandoned cart series, which is essentially when somebody abandons a cart or their checkout you can re-engage them via SMS or email depending on which channels they've opted in for, and then you can send them a reminder.
- And then once they purchase, like a post-purchase experience from the first time you can request a review to get more social proof, you can also offer them to join the loyalty program or discount on their next purchase, and so on.
- My favorite automation is actually behavioral-based automation where you can utilize product view browsing behavior data where you can look at what people are looking at from a product perspective, what sizes they're clicking on, and what colors they like. This yields surprisingly high results.
Aashish: Which DTC products do you love to buy and why?
Rohit: I've been a fan of Bellroy, an Australian leather goods company. I've been buying my wallets from them for over 10 years now. And I've to have a look back as well as then they, they now produce bags and stuff, which I've been buying as well.
And then more recently from a home office perspective, I've been buying at our Singapore local brand. Secret lab and prism who make gaming chairs and monitors and TVs. And so, yeah, so these guys are extremely good. They make cheaper and better products than they are giant competitors out there.
Aashish: Why do you love DTC brands?
I love DTC products because they are brands that value their product as well, and are passionate about what they build and create for people.
It's all about building a relationship. Goes back to the traditional way of businesses, selling to customers and knowing and sustainably connecting with their best customers without having to advertise or even do too much marketing.
They're typically now making very high-quality goods providing a very great customer experience. Larger brands, don't care whether they distribute their products through supermarkets, but DTC brands put that love into understanding and providing great customer support.
Aashish: Any one last piece of advice you wanna share?
Rohit: I think the first thing everyone wants to get into is instantly jumping into dumping money into customer acquisition, which is fine. It is part of the initial acquisition strategy when you're not a known brand. Put all your focus into retention, marketing from day one and setting up that stage for all the customer data that you were gonna be collecting.