Limited Supply Podcast – Season 11, Episode 3: Underrated DTC Tactics and Strategies

Host: Nik Sharma
Release Date: January 22, 2025
Podcast Title: Limited Supply
Episode Title: Underrated DTC Tactics and Strategies

In the third episode of the eleventh season of Limited Supply, host Nik Sharma delves into a treasure trove of often-overlooked tactics and strategies that can significantly enhance Direct-to-Consumer (DTC) brand performance. Responding to enthusiastic feedback on the inaugural episode of the new season, Sharma shifts focus from commonly overvalued strategies to those underrated yet potent methods that can streamline operations, improve data utilization, and boost revenue.

1. Leveraging AI for Creative

Sharma opens the discussion by emphasizing the transformative power of Artificial Intelligence (AI) in creative processes. While many associate AI with tools like ChatGPT and DALL·E, Sharma highlights advanced applications that facilitate scalable and rapid creative generation.

Key Points:

• Advanced AI Tools: Platforms such as Butter and Marpipe utilize AI to produce a vast array of creatives quickly, enhancing ad production efficiency.
• Innovative Features: Butter, for instance, can transform user-provided images by removing backgrounds and converting them into 3D renders, ready for ad usage.
• TV Ads Innovation: TV Ads AI stands out by ingesting digital creatives and performance data to generate multiple TV ad variants, allowing brands to test and deploy numerous creatives instead of limiting to one or two.
• Specialized AI Platforms: Tools like Claude offer superior copywriting capabilities tailored to specific brand voices, surpassing generic AI models.

Notable Quote:

"Claude’s great for copywriting, especially when you train it, you know, specific to your brand. It's a little bit stronger than just ChatGPT."
[Timestamp: 05:30]

2. Setting Up a Real-Time Analytics Dashboard

Sharma underscores the importance of real-time data in making informed business decisions. Moving beyond rudimentary daily reports, he advocates for comprehensive Business Intelligence (BI) tools that aggregate data from multiple sources into a unified dashboard.

Key Points:

• Evolution of Reporting: From manual reports sent via email to sophisticated BI tools like Tido, which Sharma utilizes to create customized dashboards named "Sharmalytics."
• Customization: BI tools allow brands to tailor metrics and equations to align with specific business goals, offering insights beyond standard reporting tools.
• Integration: Seamlessly integrates data from platforms like Shopify, Meta, Google, organic search, email, and SMS into a single, accessible dashboard.

Notable Quote:

"The beauty of using a BI tool is that you can actually build it around your business... you can actually set all these equations up and see them exactly how you want to see them versus more reporting tools will just tend to have the, you know, what 99% of people need."
[Timestamp: 09:15]

3. Establishing an Affiliate Program with Publishers

Sharma advocates for leveraging publishers as affiliates, rather than relying solely on traditional influencer or creator affiliates. This strategy taps into the vast reach of established publications, enhancing brand visibility and credibility.

Key Points:

• Integration with Skim Links: Ensures seamless connection with publishers’ CMS, allowing automatic tagging of products with affiliate links within content.
• Relationship Building: Developing strong relationships with affiliate editors and managers at key publications like Refinery29, POPSUGAR, Buzzfeed, and Business Insider to prioritize and promote brand offers.
• Incentivized Commission Structures: Creating tiered commission models to motivate publishers to drive higher sales volumes, often offering higher commissions than standard affiliate platforms like Amazon.

Notable Quote:

"With publishers you get access to their entire... you get to be on their website... they're always putting out gift guides, listicles, roundups."
[Timestamp: 13:45]

4. Removing Honey and Capital One Shopping

Sharma warns against the pitfalls of browser extensions like Honey and Capital One Shopping, which can undermine existing affiliate efforts by hijacking sales attribution.

Key Points:

• Affiliate Hijacking: These extensions insert their own affiliate links during the checkout process, diverting commission from primary affiliates or creators.
• Ineffective Traffic Generation: Despite promises of extensive audience reach, data shows negligible traffic driving, making them ineffective for genuine revenue generation.
• Recommendation: Brands should scrutinize and potentially remove these extensions from their affiliate programs to protect legitimate revenue streams.

Notable Quote:

"When I looked into that data, I basically just realized all they were doing was taking credit for sales that were not theirs... Honey is just a scam."
[Timestamp: 17:20]

5. Investing in a Strong Organic Social Presence

Beyond paid advertising, Sharma stresses the importance of cultivating an engaging and authentic organic social media presence to foster deeper connections with customers.

Key Points:

• Social Profiles as Storefronts: Platforms like Instagram and TikTok serve as critical touchpoints, often more influential than the official website for brand perception.
• Optimized Highlights and Content: Utilizing Instagram Highlights to showcase user-generated content, press features, FAQs, and product showcases, making essential information easily accessible.
• Engagement Strategies: Implementing features like broadcast channels, direct messaging with creators, and exclusive content for close friends to build a loyal and engaged community.

Notable Quote:

"Your Instagram profile, your TikTok profile, especially with the younger generation... your Instagram profile can sometimes be more important than your website."
[Timestamp: 21:10]

6. Building a Peer Group Chat

Sharma highlights the value of creating group chats with peers from different companies to facilitate real-time information exchange and collaborative problem-solving.

Key Points:

• Networking Benefits: Establishing connections with directors of performance marketing from brands like ThirdLove, Madison Reed, and Stitch Fix can lead to significant revenue gains through shared insights.
• Real-Time Insights: Group chats provide immediate access to emerging trends, tactics, and strategies that may not yet be covered in industry publications or reports.
• Continuous Learning: Encourages ongoing dialogue and support among peers, fostering a dynamic learning environment.

Notable Quote:

"Group chats, in my opinion, are the best way to get access to information... they are the fastest way a lot of times what you'll see in publishers, you know, industry publications or newsletters comes at least a day late than the group chat."
[Timestamp: 25:40]

7. Engaging with New Vendors

Sharma recommends proactively exploring new vendor solutions to stay ahead of industry developments and discover innovative tools that can provide competitive advantages.

Key Points:

• Vendor Meetings: Even if immediate adoption isn't feasible, meetings can offer valuable insights into emerging technologies and methodologies.
• Innovative Solutions: Exposure to vendors like TV Ads AI can reveal advanced approaches to ad creation and multi-channel marketing strategies.
• Future-Proofing: Understanding new vendor capabilities can inform long-term strategic planning and potential integrations.

Notable Quote:

"New vendors are usually challengers in the space and they're usually coming in because they have some edge or something that the current players don't have."
[Timestamp: 28:25]

8. Cleaning and Refining Customer Lists

Effective list management is crucial for operational efficiency and optimizing marketing efforts. Sharma advises brands to routinely clean and segment their customer databases.

Key Points:

• Cost Efficiency: Maintaining large, unverified lists can result in wasted spending on inactive or low-potential contacts.
• Enhanced Targeting: Tools like Waste Not Tech help identify and exclude ineffective contacts, improving ad targeting and overall campaign performance.
• List Health: Regularly cleaning email and SMS lists ensures higher engagement rates and better alignment with marketing objectives.

Notable Quote:

"If you're uploading these lists, you're also giving bad signals to Google Ads, to YouTube, to Facebook, etc. It's going to make your overall, you know, targeting more efficient and your ad spend also more efficient."
[Timestamp: 31:10]

9. Whitelisting

Whitelisting involves running ads through trusted channels or influencers’ accounts to enhance credibility and reduce Cost Per Click (CPC).

Key Points:

• Trusted Channels: Utilizing accounts of reputable publishers or influencers to display ads can lead to better performance metrics compared to running ads from the brand’s own account.
• Cost Benefits: Sharma notes significant reductions in CPCs, sometimes up to 50%, when using verified accounts for ad placements.
• Platform-Specific Strategies: On TikTok, leveraging Spark Ads can replicate the benefits of whitelisting by using authentic content to run ads, maintaining native feel and engagement.

Notable Quote:

"If you've got a verified person who you're whitelisting through, you'll probably see your CPCs drop half by half."
[Timestamp: 34:50]

10. Building a New Customer Offer

Creating compelling offers tailored to attract new customers is a fundamental yet often underutilized strategy. Sharma advises brands to craft offers that provide substantial value and encourage higher average order values (AOV).

Key Points:

• Strategic Offers: Develop offers that bundle products or include incentives like free gifts or extended trials to enhance perceived value.
• Data-Driven: Utilize sales data to identify products that drive the highest sell-through rates and base new customer offers around these insights.
• Testing and Scaling: Experiment with multiple offers to determine the most effective one, then focus acquisition efforts around the winning strategy.

Notable Quote:

"The goal is once you create an offer and test it, you might have to create a few different ones to test which one is the best one. But once you find a good offer, your entire goal should be scaling new customer acquisition behind that offer."
[Timestamp: 38:20]

Conclusion

Nik Sharma wraps up the episode by reiterating the value of these underrated tactics in building and scaling successful DTC brands. From harnessing advanced AI tools to enhancing organic social presence and refining customer lists, these strategies offer practical avenues for brands to optimize operations and drive growth. Sharma encourages listeners to engage with the community through Slack or Twitter for further discussions and to stay tuned for more insightful episodes that cut through the industry noise.

Final Quote:

"Those are all of the underrated tactics, tips, tricks, strategies that I wrote down for today... I'll come back with some more overrated and underrated tactics until next week."
[Timestamp: 42:00]

By integrating these often-overlooked strategies, DTC brands can achieve greater efficiency, deeper customer engagement, and enhanced revenue growth. Sharma’s candid insights provide a roadmap for brands willing to explore beyond the conventional and embrace innovative approaches to thrive in the competitive consumer market.