Starting a direct-to-consumer (DTC/D2C) business can be an exciting yet daunting endeavor. With lower barriers to entry, it’s easier than ever to launch a new product or service. However, competition is fierce, and most new companies fail within the first few years.

After studying some of the most successful DTC brands, several key factors stand out that contribute to their prosperity. While success is never guaranteed, following these essential DTC rules will significantly increase your chances of building a thriving business.

Define Your Purpose

Having a clear sense of purpose is foundational for any great company. Your purpose explains why you exist and the unique value you provide. It energizes your team and attracts like-minded customers.

For example, TRIBE’s mission to eradicate modern slavery unites employees and spreads brand awareness. Hiut Denim knew defining their “why” was critical before launch. The business couldn’t begin without a reason and purpose guiding decisions.

Take time early on to clarify your purpose. Let it shape your business model and brand story. A heartfelt purpose that resonates creates a solid foundation on which to build.

Build a Strong Community

Direct interaction with customers lets you continuously gather insights to improve. Yet you can’t thrive on transactions alone. The most successful DTC brands cultivate genuine communities.

TRIBE began as a community of runners and athletes. Snag Tights was saved by ingenuity and support from their community when cash flow stalled. Ugly keeps customers engaged by eliciting feedback and providing new products.

Community members are your best supporters. They provide ideas, spread awareness, and drive sales. Make community building a priority from the start. Use social media, events, content, and incentives to foster meaningful connections.

Obsess Over Customer Experience

With unlimited options online, customer experience is everything. DTC brands famously obsess over delighted customers. This starts with amazing products but doesn’t end there.

Graze, allplants, and tails.com built their own factories due to distrusting third parties. Brands carefully consider packaging, shipping, and easy returns. Heights prioritizes hiring staff who balance product expertise with joy in helping people.

Monitor net promoter score. Streamline ordering. Invest in flawless fulfillment. Turn problems into relationships through prompt and caring service recovery. Customer experience is your best marketing.

Iteratively Improve with Data

Unlike traditional retail, DTC brands own the entire value chain. This grants access to incredibly valuable customer data. Use data to constantly iterate and improve.

Ugly and allplants use reviews to refine recipes. Snag Tights’ modeling reflects their customer gender split. Hiut discovered newsletters, not Instagram, drove sales. Data sheds light on what is and isn’t working. Lean into those insights.

Adopt a Modern Mindset

DTC brands are modern businesses operating differently than legacy companies. They attack opportunities with fresh thinking unhindered by “how it’s always been done.”

Ugly supports a fully remote team across time zones, allowing rapid expansion. Half of Who Gives a Crap’s profits fund building toilets for those lacking access. Many brands like Hiut Denim focus on sustainability.

Rather than accepting trade-offs, ask “Why not?” Get creative with win-win scenarios. Increase access, improve lives, and lighten environmental impact through innovation.

Build an Emotional Brand

Your brand is more than a name and logo. It’s the emotional connection customers have with you. DTC brands spend significant energy developing their brand and integrating it into all touchpoints.

In the past, identity was signaled by clothes and cars. Now, purpose and values drive purchasing. An authentic brand that resonates emotionally increases sales and loyalty. Don’t treat branding as an afterthought. Do the work upfront to clarify your essence.

Stay Obsessed with the Product

Without a hero product, nothing else matters. The best DTC brands stay obsessively focused on delivering a superior product that solves a real need exceptionally well.

For Sugru and Who Gives a Crap, DTC was the only way to introduce their products. Lick, Casper, and Bloom & Wild built business models around improving the status quo. Keep innovating to maintain your edge. Talk to customers daily.

Create New Possibilities

Compare your product to competitors and traditional options. How are you fundamentally better? If the improvements seem minor, you may struggle to gain traction. DTC opens the door to rethink solutions from scratch.

Casper revolutionized mattress shopping by shipping beds in a box. Quip reimagined mundane daily habits around oral care. Bloom & Wild removed the worst parts of flower delivery. Don’t just make tweaks. Offer a meaningfully better way.

Optimize Experiences with DTC

For many brands, DTC provides the ideal route to market new innovations. Removing middlemen facilitates customized products and frictionless ordering. This allows for crafting the perfect end-to-end experience.

Without DTC, brands like Bloom & Wild would struggle to deliver their vision. Yet as demand grows, expanding into retail and other channels often makes sense. Do what’s best for customers. Just ensure excellent execution.

Prioritize Long-Term Thinking

With venture capital drying up, profitability is paramount. But resist short-term plays if they undermine your purpose. The most resilient brands take a long-term perspective.

Who Gives a Crap committed to a 30-year investment in their mission. Patagonia stayed private to avoid quarterly earnings pressures. Set bold goals for the future you’re building towards. Stay patient yet persistent.

Key Takeaways

Launching a DTC brand is easier than ever, but success is not guaranteed. By following the examples of leading brands, you gain a considerable edge. Key lessons include:

• Define your purpose
• Build an authentic brand and community
• Obsess customer experience
• Use data to constantly improve
• Adopt a fresh, modern mindset
• Foster an emotional connection with customers
• Keep improving your hero product
• Fundamentally rethink the solution
• Start DTC but expand strategically
• Take a long-term perspective

While DTC provides a compelling path to launch, growth requires delivering meaningful value to customers. By incorporating these essential rules, you set up your business for sustainable success.