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Ep 561: Unwinding the Tactical Spin Cycle: How Pilothouse Builds Strategy That Scales
00:41:42
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- [00:00]
A
In the DTC space. Five years ago, you could launch a product or a business that didn't actually have any sort of like product or growth or competitive advantage built into it. And you could optimize your way into success because there was so many people in market. Now that competitive landscape has changed.
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B
Strategy is the how component of getting what you want. A strategy should have clarity on how you're going to win.
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A
If you haven't identified a fundamental challenge preventing you from getting where you want to go, anything you say will sound good.
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B
There's this shift that has to happen at some point in a DTC business's life cycle. You've already done all the efficient harvesting. That's where you have to actually start thinking about this new playbook.
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C
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A
No filler.
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C
I am Eric and I am back with a very special episode with Pilothouse's CEO Dave Steele and our Head of Strategy. Duncan Ferguson to talk a little bit about some of the things we're seeing in the space the last quarter of 2025 and I think 2026 is the year of strategy. Everyone's talking about what actual good strategy is, how to execute it, how to spot when you don't have a strategy. And I thought maybe we, I know this is a big, big issue at Pilothouse with our clients right now and maybe we could start by what we see when they're isn't a strategy present, which we call the tactical spin cycle. What is the tactical spin cycle and how do we diagnose when someone's in it?
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B
Dave, nice.
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D
Good to be on Eric.
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B
Thank you. Yeah.
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D
So the tactical spin cycle, it's best described as a positive feedback loop towards shorter term outcomes and tactics. And what happens, especially you know, our roots as a performance marketing agency and clients who want short term outcomes, is that when you set those short term parameters, it forces behaviors and short term tactics to create results within that window. And the problem is that as that cycle continues, each time you squeeze the rag a little bit more and every time you step back up to repeat that process, it becomes less efficient. And as that happens over time it becomes harder to break out of that cycle and start focusing on longer term strategic decisions and moves. Hence you get stuck within it.
- [03:57]
C
That's even enforced by these algorithms. Right. Because you get these diminishing returns as you target a narrower audience or you've only focused on maybe deeper down the funnel. You get worse and worse iterative outcomes as it has as it's sort of like drawing on all of your past performance which is dwindling. It's a cycle, it's a vicious cycle.
- [04:14]
B
Vicious cycle, exactly. The in market audience, everyone's competing for it and as everyone continues to compete for it, it's like you're picking the low hanging fruit. And if everyone's going after that fruit pretty soon there's, there's none left. And you haven't built a ladder to climb up the tree and go after an out of market audience to start converting them.
- [04:33]
C
What were you going to add on there, Duncan?
- [04:34]
A
I think like I like that as a, as one facet of the explanation for people listening to this, you might also imagine how it feels to be in the tactical spin cycle, which is like you're looking at your Shopify, you're looking at your Meta or Google and you're thinking, oh my God, I need to get more revenue coming in, what can I do? And then you create a list of stuff that you can do and you're freaking out spending 16 hours a day trying literally everything you possibly could to get a result. And that list just grows and grows and you spend more and more time and you're experiencing diminishing returns. And that's what the tactical spin cycle feels like. When really what's going on is you could say it's like the strategic situation in your industry or whatever, something bigger is going on in your environment that you're not addressing. And so if you step out a couple layers, you can say, oh, actually the root cause is this thing. And maybe there's three things I can do to address that. And it might take a little bit longer, but they'll be more impactful than spending 16 hours a day trying to do as many little things as you possibly can.
- [05:53]
C
What's the best way out? Well, the one thing I always think about, I just did an interview with Pretty Litter this week and they're this crazy $1 billion cat litter company that had like the best product strategy I've heard in a long time. It was basically like a health diagnostic tool for cats where if the pee was too acidic or too basic, it shows up as a bright color. But then also because they're using this mater, their shipping costs were a third less than all of their competitors and they basically he's exited for a billion dollars in like five years, which is absolutely crazy. So like the product strategy of that was just mind blowingly good. And then he had a great growth strategy to go along with it. When, you know, as an agency, we're getting companies that come to us, they already have hopefully their product strategy in place and then we're talking about growth strategy here today is there.
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B
Can.
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C
Can a good growth strategy overcome a mediocre product strategy?
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A
Well, let's also think about maybe what gets people into business, especially in the DTC space in the first place. Right. The reason we're talking about the tactical spin cycle now and not five years ago was because the situation in the DTC space five years ago was that you could launch a product or a business that didn't actually have any sort of product or growth or competitive advantage built into it. And you could optimize your way into success because there were so many people in market. And so it was all about how many tactics can you do to optimize your way into success. Whereas now that competitive landscape has changed and so you actually do need to consider those things and build them into your business. And so one of the things that we see A lot, and I've personally seen this a lot with partners that come to us is that they've never had that built into their business and then they're struggling to succeed and then they're seeking someone to do more tactics for them, like higher volume of things to optimize when really there's a bit of a self reflection needs to happen about where does my strategic advantage come in, how do I actually win in this space? And so I would just add one. Sorry, this is a bit long winded, but I'll just add one example that I. There's examples with happy endings and some with less happy endings. But I remember we had a workout equipment brand that did really, really well during the pandemic. And it was like scaling to the moon. And I was working with that partner and things were not going well, we weren't growing anymore. And I thought, how many more things could I possibly do? I was working 14 to 16 hours a day, working my ass off to try and do as many things as I possibly could. And all of us were sitting there wringing our hands, trying to figure out what we could do with clients not happy, they're freaking out. And then news story comes out and it says, peloton nearly bankrupt because workout equipment sales have gone through the floor. And that's because the strategic situation in the workout equipment world was impacting us. And the small little tactical optimizations on our platform was never going to overcome that unless we address this higher level thing. Now, of course we're not going to come up with something to solve that problem. But that's some context about the tactical spin cycle is down here in optimizations. And strategic work is at a higher level that's going to address a lot of the stuff at a lower level that's upstream.
- [09:10]
C
And I guess the key is being able to manage the things you can manage. So when, when we come, when a brand comes to us, what are the things that we're going through to assess where they are in their strategic journal and whether they're in the journey and whether they're in the tactical spin cycle or not?
- [09:26]
B
I think it starts with data analysis, right? So often I'll give you, I'll give you one example. Brand comes doing about $20 million top line grow aggressively over the past three years. And when you look at their sort of decline now heading into the past, let's say one year and a half, when you actually look into Meta, for example, which is the top driver of their customer acquisition, you know, over the past three years spending $16 million, 50 million US users on the platform with an average of 17 times frequency. They're starting to saturate in many ways the in market audience, right? And so that's a great example of them needing to actually step out and say, how are we going to influence consumer behavior of the broad market? And that requires a new strategic approach, that requires longer term thinking, that requires defining, hey, who is our real customer? How are we going to speak to them? How are we going to socially swarm that person? Because it takes more than just one ad impression to convince them to become in market and to care about your brand.
- [10:32]
C
So what exactly strategy is one of those words? It's like, you say it enough times, you're like, what does this word even mean? But it's funny, I find myself because I feel a little called out in this podcast because for five years now been talking a lot about the tactics, right? There's so much that where we call out platform specific tactics and that's been some of our biggest wins when we tell people about, you know, putting a link in your meta ads and boosting your conversion rate by 20%, all these sort of tactical things that we talk about on the podcast. But what, what from your perspective is strategy?
- [11:02]
B
It's an interesting one to tackle because we've defined it at Pilothouse. But I think to, to answer that, I want to set up a, a bit of a frame. And the first piece of the framing is what is strategy? And there's many definitions. You know, you can go to Oxford Dictionary, you can go to all these different thought leaders. We have our own definition. And then there's a second lens to look through, which is what is good strategy, which introduces new elements that are not part of the first conversation. So just as a thought experiment, Oxford Dictionary defines strategy as a plan of action or a policy designed to achieve a major or overall aim. And I'm going to pin this plan of action. We've certainly internally got ourselves tripped up on this concept of a, of a plan of action. Hopefully we come back to that in a minute. But one thing that definition does is similar to a book we like to refer to from Richard Rumelt. Good strategy, Bad strategy. He clarifies in his book in the same way that definition clarifies that a strategy is not the overall aim. And oftentimes strategy gets conflated or mixed up with a goal or an objective or a target. So people would say things like, my strategy is to increase retention or grow ltv, when in fact that's an Outcome, that's a target. They'd say achieve 50 million annual recurring revenue or decrease CPA or CAC by by 20%. Those aren't strategies by that definition, they're outcomes. So what's happening is a confusion about what you want with how you will get what you want. So there's a fundamental aspect of defining what strategy is, is to say strategy is the how component of getting what you want. And internally we like to, we like to call that the how we win statement. Right? So a strategy should have clarity on how you're going to win. It should define what the aim is, and then it should have clarity on how you, how you're going to win. And if you have those things, I'd say you technically have a strategy, but that does not mean you have a good strategy, which we maybe get into.
- [13:19]
A
There's something really interesting that you run into a lot which is, and I really don't want this to. It sounds soft when you talk about it and then you start to intuitively understand a bit better. But frequently if you just tell someone, hey, you want to grow 50% year over year, and you say, how will you win? Well, we're going to win by dominating the market or something like that, which is kind of doesn't really give you a lot of direction. There's some sort of like policy involved, some sort of. It gives you a sense of how you're actually going to make decisions downstream. So frequently what happens is if you haven't identified a fundamental challenge preventing you from getting where you want to go, anything you say will sound good. Everything sounds like a good strategy when it's not tested on the core challenge that's in front between you and your goal. And deciding and framing that challenge is incredibly important because then it reframes everything you decide to do downstream. And the interesting thing about the how we win statement is that an organization or a business has all these subunits of people. Let's just think about a digital marketing team. We have the meta media buyer, we have the Google Media buyer, we have our email marketer, we have our content people, we have our brand people, and we have our socials people. All these people are going to be operating on what they believe to be best practices. They're all going to be making their own decisions on how to best do their job in each one of these little areas. And all those things inside their zone of Google or meta or email, all those decisions might be good from their little world. But if you don't have a strategy that tells all those people, how to win, then you won't be harnessing the power of all those channels together to compound them into one actually winning strategy moving forward. And this is the big thing that we, we see with our teams when clients get caught in the tactical spin cycle. Everyone's spinning in their own directions, doing all these different things, but they're not actually making a team that's greater than the sum of its parts. And that's what the how we win statement is. It gives guidance to each one of these players on how to work together.
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C
What does a good how we win statement sound like?
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A
Well, I'll tell you this, like we've had brands where they were trying to this is a consistent thing. Actually. Their problem is they're just trying to speak to everybody and it doesn't resonate with anyone. Your messaging is so generic. Now there's a time and place for generic messaging or whatever, but it's not targeted. And so you actually don't know what to say. So you would just end up saying totally generic things to all sorts of people. No one actually resonates with it and no one actually cares. And so how you win is saying, okay, our business is actually really well designed to resonate with this group of people of this age group, this gender, this geographic location. So we're going to win by focusing on this group of people and then everything downstream from that. You think about your meta targeting, your Google, your email, all of that changes and everyone's like, okay, we're going after these people. And so you can decide to do generic growth hacking across the board that sort of like kind of works with everybody. Or you can actually figure out how to market to your ideal customer, which I think can get lost in the DTC space because everyone's trying to high speed, volume, tactical spin cycle growth hack their way somewhere.
- [16:49]
B
One example of the how we win statement. I don't know if this is actually their how we win statement, but just while we do sort of studying on brands that we can talk about hims and hers, I imagine that their diagnosis early on was that embarrassing health issues have huge demand but low treatment rates due to stigma. So if that was an observation of the mass market, right. That's not the in market, that's the out of market total addressable. A how we win statement could sound like we're going to destigmatize embarrassing health issues, right? Or we're going to normalize embarrassing health issues and that becomes a company level, brand level thing that everything below that needs to rally behind that mission. So when you're doing a creator brief, when you're doing internal content, when you're doing a commercial, you should be able to watch every piece of asset that gets produced and say, does that normalize embarrassing health issues? And they realize they had to adopt humor, right? Because that's how you can broach that subject. And so that becomes the thread that is weaved through all activities below that mission.
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C
It's a great example.
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A
There's a question coming up on this thing where it's like, our channels are not talking to each other. How do we get our channels to work together better? And this is consistently the thing that we've run into for years. And we, we thought about it like, how do we get Meta and Google to plug into each other and email and all this stuff? And when really we found ourselves that we were actually asking the wrong question, the question that we should have been asking is, what is our theory on how to win? And then how do we deploy marketing channels effectively to win that way? And so I think a lot of the time we sit here at the sort of channel level and say, how many more channels should we add? Should we add TikTok? Should we add another channel and that will add another layer, another channel of revenue? Instead, think about what is our challenge, what are we trying to accomplish? And then what is the best way to actually execute that strategy? And it's like, maybe it's two channels, maybe it's three, but they would be chosen and deployed based on how you. What your theory is of winning.
- [19:02]
C
Okay, so Dave, we talked about strategy, we talked about. But how do we know the difference between good strategy and bad strategy?
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B
Earlier I mentioned Richard Rumelt's good strategy, bad strategy, and that's sort of our, our internal bible in many ways, of how we define that. And Richard uses the concept of a kernel, which is every good strategy has three parts, three elements. The first element is a diagnosis. The second element is guiding policies. And the third element is cohesive actions. And we think maybe slightly different than that framework in that we actually think the goal or the objective should be fundamentally tied to strategy. Because if, for instance, the goal was to grow by 20%, that's much different than when the goal is to grow by 100%. So therefore the how the strategy would need to be quite different depending on that. So we would add a fourth element to that, just at least internally to goal. But the diagnosis, the first part is what you were speaking to, Duncan, which is identification of a core problem or a key opportunity and that's often overlooked in that if we had infinite resources, you wouldn't need strategy because you could just throw the kitchen sink at every problem. But the reality is there's only so many hours in the day, there's only so much money in a budget budget. And so strategy is needed to find the leverage point. That's a key word through all of this, is where are the leverage points? And if you think of any kind of military example of where a huge army got beaten by a smaller army, it's because they found leverage. And then you would be referred to as that's good military strategy. And so for small brands that are growing, that have bootstrapped, limited resource, that's where strategy is required. Rather than a situation where you try and do everything and you stretch time between everything, really identifying what is the main thing. And then inter. Next, you know, the main thing is keeping the main thing. The main thing. That's very hard to do. But good strategy is to create a. To create cohesion and clarity, to keep the main thing the main thing. And that's the first aspect.
- [21:08]
C
And have it flow downstream and make.
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A
Sure it flows downstream. But here's the. Maybe I can again frame this from like my own experience in the DTC space is that so much of the perspective in the DTC space is sort of like thinking about risk. Right. It's very hard to have the confidence to say, this is the problem. Here's what we're going to do. It's this one guiding thing, or like maybe these two things. We're going to focus on these two things and nothing else. That's very hard to make that decision. And you want to feel confident that you've made that decision very well because then that's going to trickle down to all sorts of other decisions for a decent amount of time. And I think that when we work with a lot of our partners who are used to being in this tactical spin cycle, that's the question that they may not even realize is over their head, is that, well, why would I do that thing when I could do a hundred things and see which ones pan out? And I'll just do more of that. Where you actually need to spend quite a bit of time doing some hard thinking, which is what we do with our partners. And we figure out where those points of leverage are. And we figure out, okay, we believe there's this much opportunity in this space and it's worth the bet. And then there's a whole bunch of work that happens. We're trying to Keep a team actually in line, not spinning off in their own tactical spin cycles, but actually keeping your team all moving in one direction to make sure that you get to that destination, which is the pot of gold at the end of the rainbow. It's challenging to do.
- [22:41]
C
And we live in this omnichannel world where again, on the DTC podcast we're talking, we're always talking about the new, whether it's Applovin or new traffic sources, Snap, or, you know, the exciting TikTok or TikTok shops, all these things. So we're always talking about expanding horizontally to these different platforms. But again, if all of them are in silos or aren't marching to the beat of the same drummer, then you're not going to be getting optimum results. So what do you mean by strategy? Like, I guess we talk about, you say you don't need more parts of your strategy, you need a coherent strategy. What does strategy coherence mean to Pilothouse?
- [23:16]
B
Nice. Well, I think that's. That introduces the second element of the kernel, which is guiding policies. And that's where systems theory is introduced, because a system make sense out of complexity by thinking in terms of wholes rather than individual parts. And the idea is if you're trying to solve a complex problem like customer acquisition, you can't think about it through the individual lenses of the multiple channels. So even if you tried to say, hey, I'm going to group all these channels together and manage them in parallel, that's not tapping into the power of a system. And the way that you do that is this concept of guiding policies. And the best way I've come to describe that is thinking of this cake analogy, which is ingredients of a cake, water, flour, sugar, each individually have value, but when combined together in a unique way, they create something that is greater than the sum of its parts.
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A
Right?
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B
Which is the end cake. And so an independent channel like Meta, who's out there, if it's just acquiring Meta customers and then the Google channel is acquiring Google customers and so forth independently, that is not creating this multiplication factor as when those channels are truly working cohesively together on the same unified customer journey with the macro goal of efficiency. Not at the level of how efficiently is Meta acquiring a customer and Google acquiring a customer, but rather how efficiently is this system making consumers who were previously brand unaware, aware and making aware people consider and making considering people purchase. That is the new definition of system efficiency that I think a DTC brand needs to get to. And that becomes this ladder. Earlier we talked to the tactile spin cycle. How do you get out of it? You to need to start climbing that ladder because that allows you to look over a longer time horizon.
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A
Let's maybe play a scenario here to make this a bit more concrete. Long standing debate that would happen with partners is where should budget go? Should you spend more on meta or you should spend more on YouTube and maybe we should have email or maybe we shouldn't have email. Not really sure. And if you are just making decisions as separately as we've frequently seen partners try to do is they'll say, well, Google's more efficient, so we should spend more money on Google because we're getting more efficient conversions there. So let's take money from meta, let's move it over to Google and then do that for a little bit and then revenue starts to go down. It's like, oh, okay, that's strange. Maybe we should try putting more money into meta. They go back and forth because there's no understanding of the relationship and they're trying to balance how to more optimally spread money across. If you have a strategy where you're saying, okay, our problem is that we're speaking to everyone the same when really we should be speaking to a specific group that's highest opportunity. Identify who those people are. Now you have something to hold on to. It's like, let's just say that market is, you've been speaking to everyone a little bit. It's not working very well. There's a market of, you know, $100 million market of people you can speak to. Get really specific. Now you can invest in, let's just say brand materials, assets and stuff like that. We know the money's there and we're just going to have to make an investment to try and acquire those people. You invest in brand materials that reflect your market that you want to go after. You build a customer journey. And it's like, here's we're going to do an awareness campaign, then we're going to have some conversion stuff on meta that's going to push people over the edge when they're a little bit on the fence about buying this product. We're going to measure not by conversions on meta, but we're going to measure by how we bring people into our own channels. Let's just say email plays that role. And so what are we doing? We're looking at a customer journey of how to convert this specific audience we've focused on. We're using our channels all together in one coherent customer journey that Those people pass through. And we're moving people from awareness on, let's just say YouTube awareness on their favorite channels to hitting them on Instagram with more persuasive ads to get a conversion. Now we're looking at moving them over into our own channels, which is email. And that is all hitting the same points, which is part of our strategy. It's like, you know how to get their interest, we know how to convince them to purchase, we know how long it's going to take. So we're going to. It's not going to be, it's not going to be an impulse buy. So we'll let them sit for two weeks in our email channel. We'll convert them there. That's the difference.
- [27:53]
C
Good strategy won't necessarily be indicated on any one platform by the ROI that's listed on that platform. In fact, if you have a really good strategy, you're on platform roas might look lower. I remember I saw a guy talking on Twitter the other day about like, it's not a flex to have a really high roas number on Metta. It's actually a flex to be a system that's in place that allows you to have a lower roas that a lot. But you make it up in the other parts of your strategy potentially.
- [28:21]
A
Yeah, because your meta now is able to do what it's supposed to do within a greater strategy, which is just to get in front of people and maybe carry them to a place where they're part of your own channel community. And so you're, you don't have to be fighting about where budget goes based on their most efficient channel. These channels all have a separate role to play.
- [28:39]
C
Can it mean practically like scaling back channels? Have we ever had a situation where we're like, well, you're in too many channels. We got to, you know, regroup under, you know, specific channels more so than, than spreading ourselves too thin. How, how do we know when a client, I don't know, has too many channels? Is that something we deal with?
- [28:55]
A
It does happen, but I think, like, the decision is to be made. It's like it's, again, there's, there's so many steps before you get to channels when it comes to, like, figuring out a really good strategy. And a lot of the time we have our partners come in where there's already a whole bunch of stuff going on, and it becomes, it becomes a very challenging conversation. Say, like, okay, what about all these other things we haven't considered yet? Let's map that out. And then let's revisit these channel decisions. Maybe hypothetically, it could be that none of the channels they have are the right ones and we need to completely restructure that. But that's the power of having a good strategy.
- [29:27]
B
Yeah. And that comes down to, I'd say you need to define who your actual customer is. And one other X factor is the customer density in a region. Right. So if you are selling men's shoes and you had density in a city, there's an actual multiplier effect when people walk down the street and they see your shoes, Each of those are an impression. But if only one out of every 10,000 people are wearing the shoes compared to one out of every thousand people, that multiplier effect needs to be taken into account from a, you know, from a media framework perspective, which, Eric, is your point about which channels are redistributing media on. The real question is which channel is our ideal customer on and in which regions are we trying to create customer density in? And that starts to create this conflict with the algorithm. Where a true performance marketing perspective is you let the algorithm go out and find the most efficient purchases and that's really effective and it's good. I'm pro algorithm. The downside is that it'll always go and find the thing that everyone has in common with, which is their proximity to purchase. And the issue with that is it creates a very narrow, thin customer base across a large geographic region because you generally are using open targeting. So there's this shift that has to happen at some point in a DTC business's life cycle where you've already done all the efficient harvesting and you now need to take that next level of growth. That's where you have to actually start thinking about this new playbook, because the old playbook will get you stuck in this cycle of shorter term time horizons. We need more. We need more efficiency this month. But the problem is there's no more. There's no more easy wins.
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A
And then you go for a promo.
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B
And then you go for a promo. Exactly.
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C
And then you get hooked.
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A
Yeah. Think about this, Eric. Like the platforms want to serve you to the close, like Dave said, the closest to conversion. And so if you're running a feedback loop on your creative and messaging and you're seeing like performance with people who are closest to conversion, guess what kind of messaging is going to work really well with those people? Sale, urgency, Sale, Buy. Now, guess what? You end up doing more that goes into your feedback loop and then you're just like, then you're just deleting margin from, like, DTC businesses. Anyone listening to this will know exactly what I'm talking about. It's the promo death spiral. And so you're learning off of a black box is telling you, of course, that the thing that performs best is when you try and give someone a discount or you make it like their pants is on fire unless they're going to buy this thing. And that's because you are fighting for a thin layer of people desperately to convert them when really you should be looking elsewhere. There's more opportunity to get out of that cycle.
- [32:17]
C
Dave, when you were talking, I was thinking about Tony Yu from Vessi. And when he came and spoke at our event and talked about the kind of saturation that he was achieving in Vancouver, I think it was one out of every ten people or something in Vancouver has a pair of vessels. And so there's that piece where you're like, you're being proactive in your strategy as opposed to reactive. When you're reactive, you're going to get a thin segment of a lot of people across a lot of different segments. When you're proactive, you have that opportunity to. To actually get customer saturation. And then he layered in this whole idea of, like, brand storytelling or story sequencing, where it's like when you have all these people have the vessi. You see the vessi every day. And then all of their marketing was trying to associate the idea of like the rain when it's raining, you think of Vessi kind of thing because those are the shoes you put on to go out in the rain and live your life kind of thing. So I feel like there's the, there's the, the strategy that we're talking about here. And we've also alluded to it in the beginning, but like that creative strategy or that, like, storytelling strategy where your audience really feels heard by what you're saying and. And maybe more than one of your audiences and you have different campaigns that talk to them in different ways. But it's like that creative strategy and storytelling story sequencing so important for the strategy as well.
- [33:26]
A
Right.
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B
And that's a perfect example of the need for coherence. So if they're how we win, because I do. I do remember that. And if that was we want to own the rain. Right.
- [33:35]
C
That's what he said. Yeah.
- [33:36]
B
Shoe company that owns the rain. That's the how we win statement. Then the ex. How do you express that mission? Right. How do you express it? And that's where now you need to come up with creative concepts to bring that to life and then execute on it. And what's interesting is that is much different than the creative production cycle that often happens for channels like Meta. Right. Where you need to find a balance and that becomes our new hill to climb is how do you balance between letting consumers vote with their dollars, which is they engage with what they like, with you also having a strategic direction that you want to adhere to. So it's this bottom up versus top down conflict that we talk about. And when you can make those two things meet in the middle and align consumer interests with your brand strategy, that's when I think you achieve creating brand equity with driving performance. And that really is, I think everyone's objective here is we want to create long term value while achieving short term efficiency on our marketing dollars.
- [34:36]
A
Yeah. And also there's this thing about coherence and a friend of ours articulated this really well. I think when it comes to creative anyway, it's very easy to see people saying, you know, a creative strategy. The way that this creative strategy is going to work is we're going to be very consistent, it's going to be very coherent. And there's two ways of thinking about that. There's one, how coherently has your strategy been passed down through all the layers of your business or your marketing channels versus how good is your strategy and how powerfully has it been expressed in all of your marketing channels? And so like you can't go the term, the expression is matching luggage. You don't win through creative by having everything be the same. If the thing that is the same on everything is not very powerful. You can have extremely consistent creative, let's just say, you know, associating with the rain, you know, for some, let's maybe say maybe they tried that in San Diego where it doesn't rain very well. They could have the most consistent creative ever. It still wouldn't really work because no one actually cares about the ring because there's a rain there. But I guess the point I'm trying to say is that there's this idea of coherence or consistency or how powerfully your strategy is expressed through all of your efforts. It does have to be a good strategy first and then be coherently expressed through all your efforts. And sounds like Bessie's doing a great job of that.
- [36:04]
C
So what does strategy look like at Pilot House for one of these brands.
- [36:08]
A
Coming into us, our brands that we work with, they'll tell us what their goal is for the year and then we will do a deep Dive into what we think their core challenge is preventing them from hitting that goal. There's a whole bunch of things involved with that, but we'll land on a core challenge that we think is, this is the big thing that we need to focus on. And then from there, we'll identify a how we win statement. We'll say, okay, this is how we get over this challenge. This is how we're going to think. This is our big decision. And then we move from there. We identify how are we going to execute on winning, with who, what group of people. We break down the market into segments we should target, and then we figure out where those people live in media. So do they live on beta? Do they live on TikTok? Do they live at home? Watch, you know, Monday Night Football. Okay, we're going to figure out what channels we're going to use and how we're going to reach those people. And then we figure out what the customer journey is for those people. How are we going to carry them from, like, unaware or, like, at what stage in the funnel they are all the way to conversions that can purchase. So then we map out the communication across all those channels and how we're going to carry them through, and we'll figure out why they care about the product. At each one of those stages, we build a concept for communicating that to those people. We build a bunch of ideas, and then we run those things, and then at the end, get the data, put that into feedback loop, and we start all over again. It usually takes six months.
- [37:48]
C
Anything to add there, Dave?
- [37:50]
B
A big part of how we think about strategy at pilotos is that strategy involves decisions. So we've created a strategic framework where we house those decisions in a decision hierarchy, and it moves from the very top, which is the goal of what we're trying to accomplish, through to these diagnoses and statements of how we win all the way through to customer Segmentation and Persona work into media frameworks in terms of how we're going to go out and market to those people through to creative concept and how do we bring our vision to life? And then tactics, how do we distribute that media to acquire those customers? And then finally an insights engine, which is how do we know why an ad worked, not just which ad works, and that's what you can achieve. That's the ultimate end result of gaining control. That's the benefit of a system, is that it's controllable, it's predictable. And the only way to get that is when there's this cohesion from top to bottom. So we call that the scaling growth system and we employ that with our clients, which does take time to consult with our clients about those high level decisions. And oftentimes clients may not actually have those big decisions made. So we're saying, wait a minute, how can we deploy tactics on meta if you're not even clear on how you're going to win, who your customers are? And if we purely start at the bottom of the structure, we will always be at odds. So we do need to start at the top and zip that from the top down to the bottom.
- [39:24]
C
Listeners listening if you're a brand, think about that. Think about whether you've kind of gone through these steps internally. So walk me through one more time for brands thinking about it, our icp, thinking about whether or not they have a good strategy, what are the core questions they need to be asking? Do they have a how we win statement?
- [39:42]
A
That's got to be one of them, I would say. Can you articulate your biggest challenge? Right now that's the biggest thing. Because if you've got a hundred of them and you're not really clear what the biggest challenge is to focus on, then it's going to be really hard.
- [39:55]
B
For you to have a strategy, who your customer is. If you're not crystal clear on that and you're just purely letting the algorithm build your tribe, then you'll find that your tribe ends up not having anything in common and there is no real resilience to that base of customer. Resilience comes from your ability to turn off advertising and stop your paid media and still continue to see your business grow. Where most, maybe most DTC brands, if they were to turn off their advertising tomorrow, their business would degrade to zero. And that's a problem. That's like, that's the biggest problem. And it speaks to this real issue that the purpose of paid media shouldn't be to only drive paid customer acquisition. The purpose of paid media should be to drive a baseline of persistent customers that will come back and buy again and again without needing to invest in advertising.
- [40:51]
C
I think this was a great first talk about strategy. I know this is going to be a theme for the rest of the year and throughout 2026. So I'm looking forward to kind of revisit this topic with you guys and keep digging it out because it's super important. On this podcast we're going to link on the bottom Pilot House's sort of public strategy ethos, our guide for how we think about strategy and hopefully it helps some people out there. Thanks for listening to today's episode. If you're not getting the DTC newsletter, you can subscribe for free at directtoconsumer co. And if you want to learn more about Pilot House's all killer, no filler services. Takeoff to Pilothouse co. I'm Eric Dick and this has been the D2C podcast. We'll see you next time.