Issue 23 - Is DTC Dying?

Plus all you ever needed to know to build an LP

Author

The DTC Times
July 21st, 2024

You know when the stars converge and you get not one but three experts giving you years worth of advice on CRO? 

Ok, that’s not really a thing. But it did just happen. 

To save you time, we condensed it all right here so you discover the fundamentals to building LP’s and upping your conversion game.

Question is…it even worth your time given DTC is dying?

This week:

  • Your guide to CRO

  • Is DTC dying? (Sort of but not really)

  • Quick hits

Your guide to DTC CRO

Since you never convert 100% of your website visitors, conversion rate optimization (CRO) never really ends. There are huge gains to be made by getting it right, of course, but getting it right is the operative phrase here.

Why are we talking about CRO? Well, DTC Twitter recently blessed us with a cornucopia of conversion wisdom, and we thought we’d sum it up for you. 

Specifically: 

We’ll start by condensing Harry Dry’s and Oliver Kenyon’s advice. 

Above the fold

That’s the part of the landing page that’s immediately visible when you arrive. 

As Oliver says: “it all starts with a scroll-stopping first impression”.

It’s kind of like trying to catch an Abra in the early Pokemon games - all the customer wants to do is teleport away, and you need to somehow keep them there. 

Oliver and Harry both agree that this section should have: 

1️⃣ A clear and concise value proposition

You should communicate this through your headline. Think - unique, specific benefits. 

Can’t think of anything unique/specifci? Don’t worry, build a hook around their objections. 

Next, use your sub-header to support the headline, e.g. by explaining how you will execute the value prop. 

2️⃣Enticing visuals

High-quality images, relevant images that help users visualize the value proposition.

3️⃣Social proof & trust building

Customer testimonials, logos, impressive numbers, badges, seals, etc… Also, triple-check the copy for errors. 

If you don’t have any social proof, make getting a single quote and 5-star review from a happy customer your priority. 

4️⃣CTA Magic

You need a call to action. But you’ll want to add a bit of something to make it more enticing. One option is to tackle objections, e.g. “Book a call, it’s free” or “Get an audit in 2 minutes”.

Another CTA tactic is to highlight the value prop again, like: 

The CTA at the end of Harry’s newsletter intro also deserves a mention. Users click just because they wonder he means by “roast ”-->

Turns out he meant his review of our homepage would be a roast, as in a “15-minute tear down of your homepage”. Nice.

5️⃣The final and most effective trick

Implement scarcity or urgency. You can include a few terms that imply it, or go hard and slap a countdown timer in there.

Below the fold

What comes next? 

If you’ve got them scrolling to find out more, that’s a big win. 

Here’s the checklist for this section. 

1. Solidify the value proposition

List and demonstrate your features. Take this example from Riverside:

They let you get a direct feel for their value prop. 

You can also tackle more objections here: 

2. Inspire action through social proof

Double down on demonstrating customers or clients who have experienced and enjoyed your offering. 

3. Tie up loose ends with a FAQ

For the stuff you couldn’t fit neatly on the rest of the page, put together a section with longer explanations and objection handling. 

4. Hit them with more CTAs

You can insert a CTA after each of the above sections. Link it to the section in question, e.g. after social proof, make the CTA suggest the reader could be one of these happy customers. 

5. Connect with them

Introduce them to you and your team. A founder profile can suffice. A team picture does well too. Share a piece of your founding story if possible. 

Javy and what’s after the landing page

Landing pages and CTAs are only step 1. 

What happens after the CTA is just as important, and Javy did it right. 

Rather than use a standard landing page, they made an advertorial.

It does a lot of the same things your landing page should, from demonstrating value proposition to handling objections, plus includes CTAs. But it feels more like a news article than a straight-up ad. 

Count the amount of urgency-inducing elements in that mid-page CTA. 

Now, on to the offer page. 

In a beautifully designed UX, they offer four bundles, which scale with gifts and a discount percentage. You’ll notice a ton of reviews and not one but four urgency elements. 

Last, the bundle builder.

They let you pick from a great selection of flavors, and pepper each one with scarcity implications, e.g. “back in stock”, “limited release”, “sold out”, etc…

And that’s how to close the sale.  

Takeaway: If you’re looking for areas for improvement, CRO might be a good place to start. Build from the fundamentals mentioned here and see how to make your value prop clear, your brand compelling, and your offer compelling. 

Are zombies really plaguing DTC? 

Modernretail’s recent article: “Zombie brands, fire sales & quiet closures are plaguing the DTC world” sparked discussion around the idea that DTC as an industry may be struggling, if not dying. 

Which of course prompted responses from DTC operators.

But before we get into these, here’s the gist of the article.

It covers how Fan Bi, CEO of the Hedgehog Company**, states that there has been a proliferation of “zombie brands” in the industry – DTC companies that are struggling, yet not quite dead. 

These are brands doing everything they can to survive, i.e. layoffs, discontinuations and going silent on socials, and often ending bought back cheap. 

Bi believes this is the fallout of the ZIRP era, which we’ve covered here before, when money was cheap, VCs were flirty, and valuations were frothy.

**This might be a good time to mention that the Hedgehog Company buys brands worth $5 to $15M*, which could explain Bi’s perception of a “zombie plague”. 

Nothing new. 

But is this really a plague on DTC? Or just tougher days than in DTC’s recent golden age? 

Drew Fallon, CEO of Iris Finance pulled data from their customer base to comment on the article’s conclusions.

In his thread, Fallon notes that brands worth over $15M are doing fine. Good even. 

Brands worth under $15M, not so much. 

As you can see in the graph below, Iris’ bigger brands (>$15M) have seen an average 35% growth YoY every month since January. 

Meanwhile, smaller brands (<$15M) have been shrinking in aggregate. 

Drew’s conclusion: it’s hard to be the little guy. 

Taylor Holiday from the Common Thread Collective thinks it’s because big brands have LTV cash flowing in from existing customers, which usually covers operating expenses and more. They can borrow from this to pursue customers at low initial profitability.

Smaller brands, in contrast,  don’t have this luxury and generally need to chase first-order profitability. They rarely have months or years worth of cash to prop them up during down times as well.   

As for zombie brands, Taylor believes we’re seeing a “cleansing” of the ZIRP era’s least worthy profiteers. 

Takeaway: Zombie brands may be multiplying as a result of cheap money and DTC COVID expansion era.

The new DTC landscape, cleared of the companies and habits that grew up on free money, may end up being better and stronger in the long run.

Quick Hits

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