DTC Podcast Ep 561: Unwinding the Tactical Spin Cycle – How Pilothouse Builds Strategy That Scales

Date: November 21, 2025
Host: Eric Dick (DTC Podcast)
Guests: Dave Steele (CEO, Pilothouse), Duncan Ferguson (Head of Strategy, Pilothouse)

Episode Overview

This episode puts the idea of "strategy" front and center for DTC (direct-to-consumer) brands, dissecting why so many teams get stuck in endless short-term tactical actions—dubbed the "tactical spin cycle"—and how to break out of it by building scalable, coherent strategy. Pilothouse leadership shares their structured approach to diagnosing business challenges, building unified strategies, and creating systems for sustainable growth. Expect a deep dive into frameworks, memorable brand case studies, and hands-on advice for e-commerce leaders facing saturated markets.

Key Discussion Points & Insights

The Shift in DTC: From Tactical Hacks to Fundamental Strategy

• Post-2020 DTC landscape has moved from "growth by tactics" (when the market was less saturated) to requiring a core competitive advantage and a defined strategy.
• Five years ago, optimization and endless tactics could cover for lack of foundational product or growth advantage, but that era has ended.
  • Quote: “Five years ago you could launch a product… and you could optimize your way into success because there were so many people in market. Now that competitive landscape has changed.” — Duncan, [00:00]

The "Tactical Spin Cycle" Explained

• Definition: Brands and marketers doubling down on short-term tactics while feeling nervous about results—with diminishing returns as the low-hanging fruit disappears.
• How it Feels: Frantic, exhausting, lots of tabs open, long hours spent on optimization, but ultimately no breakthrough.
  • Quote: “You're freaking out spending 16 hours a day trying literally everything… and you’re experiencing diminishing returns. That's what the tactical spin cycle feels like.” — Duncan, [04:34]
• Enforced by Algorithms: “You get these diminishing returns as you target a narrower audience… like picking the low hanging fruit… soon there’s none left.” — Dave, [04:14]

Recognizing the Spin Cycle & Breaking Out

• Example: Pandemic workout equipment brand scales fast but subsequently stalls—teams scramble but can’t fix market saturation with more tactics.
• Lesson: Need for higher-level, strategic diagnosis rather than infinite tactical tweaks.
  • “We were sitting there wringing our hands, trying… to do as many things as possible. But the strategic situation… was impacting us, and… tactical optimizations… never going to overcome that unless we address this higher-level thing.” — Duncan, [07:06]

From Tactics to Strategy: Foundations and Definitions

What is Strategy (vs. Goals)?

• Strategy = How you win
  • Not just the “what” or outcome, but the “how” you’ll achieve it.
  • “Strategy is the how component of getting what you want. Internally, we call that the ‘how we win’ statement.” — Dave, [11:02]
• Common Mistake: Confusing outcome/goals (e.g., “increase retention”) with strategy.

The Importance of Diagnosing the Core Challenge

• “If you haven’t identified a fundamental challenge preventing you from getting where you want to go, anything you say will sound good.” — Duncan, [13:18]
• The key is framing a central challenge (not a vague wish) so that teams can actually solve for something real.

The "How We Win" Statement

• Application: Unites channels, teams, and creative under one mission.
• Example: Instead of generic messaging, targeting “the audience we’re best designed to resonate with” unlocks clarity across all channels.
  • Quote: “Our business is actually really well designed to resonate with this group… So we're going to win by focusing on this group… and everything downstream… changes.” — Duncan, [15:38]
• Brand Case Study: Hims & Hers
  • Diagnosis: High demand for treatment of embarrassing health issues, but low follow-through due to stigma.
  • “A ‘how we win’ statement could sound like ‘we’re going to destigmatize embarrassing health issues.’ … Everything below that needs to rally behind that mission.” — Dave, [16:48]

The Anatomy of Good Strategy

Kernel of Good Strategy (Richard Rumelt Framework & Pilothouse's Adaptation)

• Three key elements (plus Pilothouse's addition):

  1. Diagnosis (the core challenge/opportunity)
  2. Guiding Policies
  3. Cohesive Actions
  4. (Pilothouse addition) Clear Objective/Goal
  • Because different goals require different strategies.

• Critical Idea: Strategy is about picking a point of leverage, not trying to do everything.

  • “If we had infinite resources, you wouldn’t need strategy… but… there’s only so many hours… money… So strategy is finding the leverage point.” — Dave, [20:05]

The Risk of Reluctance:

• It’s hard for founders/teams to focus on “one thing” for fear of missing out by saying no to other quick wins.
• Good strategy demands courage, rigorous thinking, and sticking to chosen priorities.

System Thinking vs. Channel Silos

• “A system makes sense out of complexity by thinking in terms of wholes rather than individual parts.” — Dave, [23:16]

• Analogy: The Cake—Ingredients alone are valuable, but only by thoughtfully combining do you achieve something greater (the cake, not just flour or sugar).

• Channels must not just run in parallel, but be woven together for “system efficiency”—moving people along the full customer journey.

  • “How efficiently is this system making consumers… aware, and making aware people consider, and making considering people purchase? That is the new definition of system efficiency.” — Dave, [24:19]

• Practical Example:

  • Budget debates ("Should we move more to Meta or Google?") miss the point—without a unifying strategy, shifting spend is just whack-a-mole.
  • With strategy: Identify the best market; craft assets; build a customer journey; measure effectiveness across the full funnel, not just per channel.

Strategic Cohesion: Channels, Creative, and Message

• Don’t evaluate success by isolated ROAS: “If you have a really good strategy, your on-platform ROAS might look lower… but you make it up in the other parts of your strategy.” — Eric, [27:53]

Channel Mix: Quality Over Quantity

• More isn’t always better—strategy demands starting from your ideal customer and working backwards into the channels that matter to them, sometimes scaling back (not adding) channels.

  • “There’s so many steps before you get to channels when it comes to… a really good strategy.” — Duncan, [28:54]

• Customer density, especially regionally, matters—a strong presence among a group (e.g., all in one city) can compound awareness and conversion across all channels due to network effects.

  • "If only one out of every 10,000 people are wearing the shoes compared to one out of every 1,000, that multiplier effect needs to be taken into account…" — Dave, [29:27]

Creative & Storytelling as Strategic Expression

• Case Study: Vessi Shoes—Strategy: “Own the rain” in Vancouver.
  • Combine high city saturation (seeing shoes “in the wild”) with marketing that triggers the right association (e.g., when it rains, think of Vessi).
• The “Power of Coherence”: Great strategy is expressed powerfully—channels don’t all need identical creative, but the underlying strategic message must be strong and resonant.
  • “You can have extremely consistent creative… but if the thing … is not very powerful, it won’t work. You need a good strategy expressed through all your efforts.” — Duncan, [34:36]

Pilothouse’s Structured Strategy Process

Step-by-Step Approach (as applied for clients)

1. Clarify the brand’s annual goal/objective
2. <span style="color:RoyalBlue">Diagnose the core challenge</span> blocking that goal.
3. Formulate a ‘How We Win’ statement for overcoming the challenge.
4. Identify target market segments (who are we winning with?)
5. Determine media behaviors: Where do these people live? Which channels actually matter?
6. Map the customer journey: Define communication at each stage from unaware to purchase.
7. Develop creative concepts to move people through the journey.
8. Run campaigns & feed results back into the system—review data, iterate, repeat.
9. Repeat cycle every 6 months for true strategic iteration.

• Quote: “We identify how we’re going to execute… break down the market into segments… figure out what the customer journey is… build a concept… run those things… get the data, put that into a feedback loop, and we start all over again. Usually takes six months.” — Duncan, [36:08]

The "Scaling Growth System"

• Pilothouse’s proprietary approach moves from top-level decision-making (goal, diagnosis, how-we-win) to tactical execution and ongoing insights.
• Emphasis on “decision hierarchy”:

  • Goal → Diagnosis → How We Win → Customer Segmentation → Media Frameworks → Creative → Tactics → Insights/Feedback.

  • “We created a strategic framework… moves from the very top—goal—down to customer segmentation, media frameworks, creative concept, tactics, and finally insights… That’s the ultimate end result of gaining control… it’s controllable, it’s predictable.” — Dave, [37:49]

Core Questions for Brands Assessing Their Own Strategy

• Can you articulate your biggest challenge right now? (Not a scattergun list, but THE core blocker to your goal)
• Do you have a clear “How We Win” statement that guides all activities?
• Are you crystal clear on your core customer (beyond just what the algorithm delivers)?
• Can your business grow without constant paid ads (recurring customer base/resilience)?
  • “If you purely let the algorithm build your tribe… your tribe ends up not having anything in common… Resilience comes from your ability to turn off advertising and… continue to see your business grow.” — Dave, [39:55]

Notable Quotes & Timestamps

• “Five years ago you could launch a product… and you could optimize your way into success because there were so many people in market. Now that competitive landscape has changed.” — Duncan, [00:00]

• “The tactical spin cycle, it's best described as a positive feedback loop towards shorter term outcomes and tactics… Every time you step back up to repeat that process, it becomes less efficient.” — Dave, [03:07]

• “You're freaking out spending 16 hours a day… and you’re experiencing diminishing returns… That’s what the tactical spin cycle feels like.” — Duncan, [04:34]

• “Strategy is the how component of getting what you want… the ‘how we win’ statement.” — Dave, [11:02]

• “If you haven’t identified a fundamental challenge… anything you say will sound good.” — Duncan, [13:18]

• “You need to define who your actual customer is… If you're not crystal clear on that and you're just purely letting the algorithm build your tribe, then your tribe ends up not having anything in common…” — Dave, [39:55]

• “We created a strategic framework… from the very top—goal—through to customer segmentation, media frameworks… tactics, and finally insights… That's the ultimate end result of gaining control.” — Dave, [37:49]

Memorable Moments

• The “workout equipment during pandemic” story—shows limitations of pure tactical focus when market reality shifts ([07:06])
• Cat litter company (Pretty Litter) example—how genuine product advantage can make billions, and that growth strategy cannot overcome a weak product long-term ([05:53])
• The “promo death spiral”—depending on discounts to drive conversions once you’ve harvested easy wins ([31:15])
• "Own the rain" (Vessi Shoes)—the importance of region- and context-driven storytelling ([33:25])

Key Takeaways for DTC Brand Leaders

• Stop the tactical spin cycle: Endless hustle on granular optimizations cannot overcome deep strategic misalignment.
• Good strategy starts with ruthless diagnosis: Frame the core obstacle before you prescribe solutions.
• Build consensus with a ‘how we win’ statement: Let this guide all channel and creative decisions.
• Align systems, not just silos: Channels must work together toward total customer journey efficiency.
• Strategy is expressed through coherent creative and channel choices: Consistency matters, but only if the message is meaningful.
• Iterate on the process: Strategic diagnoses, creative, media mix—all should evolve as data flows in.

For more on Pilothouse’s strategy framework, check out their public strategy ethos (linked in podcast notes) and subscribe to the DTC newsletter for ongoing tactical and strategic insights.