DTC Lessons - Unlock the power of loyalty with LoyaltyLion

Each week, we're handing the floor over to an expert in the Ecommerce space to share their wisdom on building a resilient DTC brand in 2022 and beyond.

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Today, it's the turn of LoyaltyLion's Senior Technology Partnership Manager Jack Johnson. LoyaltyLion is an eCommerce customer loyalty and engagement platform, powering growth and retention through data-driven loyalty programs.

Take it away, Jack!

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Let us know your role and what you do day to day.

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I am a Senior Technology Partnership Manager (a mouthful, I know) at LoyaltyLion. I have the best job in the world, building strategic relationships with technology partners. I get to talk and learn from some seriously smart people. 

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I spend a lot of time thinking about how we can deliver as much value as possible to our partners and help solve our mutual clients biggest problems. 

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What are the biggest problems facing the DTC world right now?

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Before joining LoyaltyLion, I advised DTC brands on their eCommerce strategy. Almost all of these brands experienced the same problem, eroding margin and tighter profits. In recent years this has been exacerbated by increases in Customer Acquisition Cost and Operating Expenses.

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Now more than ever, DTC brands need to be considerate of where they’re investing capital. 

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What 3 things should DTC brands be doing to retain their active customer base?

1. Give customers a way to engage with your brand by incentivising actions which are beneficial to you. Such as; following on social media; sharing zero party data; and signing up for SMS campaigns. By incentivising these actions you build a loyal community who will be exponentially more valuable. 
2. Treat customers like individuals. Understand who you’re speaking to and why they resonate with your brand. 
3. Create a VIP experience for your top customers. Introducing something as simple as a tiered loyalty program gamifies customer engagement and lets customers know that you value them.
   
   

What loyalty insights can you share that DTC brands should take advantage of?

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Loyalty data is really powerful. You can segment customers into those who are loyal, those at risk of becoming disengaged with your brand and those that you need to win back. When you invest in loyalty, you should be pushing this data into every other element of your tech stack. We have a great collection of integrations which pass this data into email and SMS communication. 

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When you invest in a best-in-class technology stack, the overall functionality you have is greater than the sum of its parts. Make sure you understand how all these tools speak to one another and all the tactics you have at your disposal.

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What are the top 3 brands you’ve seen executing these strategies?

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There are so many examples, some of my favourite include: 

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LIVELY, who send a variety of customised loyalty emails to their customers using Klaviyo. On top of making their emails on-brand, LIVELY uses LoyaltyLion data points to make sure each one is personalised to each customer.

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Wild Nutrition, who use an Integrated Loyalty Program to display its program in the site’s banner. This makes it convenient for loyalty members to access and also shows that their loyalty program is a priority to the brand. 

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REN SKINCARE, who use tiers to encourage customers to level up, spend more, and make their loyal customers feel special. At the “Starter” level you earn £10 vouchers. At the higher “Champion” level you get access to more exclusive rewards (like early access to new products). These tiers promote exclusivity and push members to engage.

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What are the common mistakes you see DTC brands make when trying to drive more revenue from their current customers?

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Over reliance on customer acquisition. 80% of an average DTC merchant’s business comes from the top 20% of its customers. Brands should be focusing significantly more time on ensuring these customers remain loyal. 

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Besides this, I think the brands that succeed nowadays are the ones who are willing to get creative with their marketing strategies. DTC brands who use the same cookie cutter communication styles as 75% of the marketplace are going to struggle more and more moving forward.

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What do today’s customers want, according to LoyaltyLion?

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Customers want to be treated like individuals, and feel understood by DTC brands. Leverage loyalty data to understand who you’re speaking to, and tools like Relo to offer flexibility dependent on their specific wants and needs. 

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What are your predictions for the coming months?

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Brand trust and values have never been so important. The cost of living crisis is now front and centre for many consumers, impacting shopping behaviours. Consumers will be looking for brands they can really trust – they won’t be dictated to by price and deals alone. DTC brands should consider what they can do now to build faith with their customers. 

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Who do you look up to as an industry expert?

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Gareth Everard - DTC extraordinaire who has launched and operated a vast array of brands. Gareth has an almost perfect track record of giving the right advice at the right time. 

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Who are 3 people in the eCommerce ecosystem you look up to and recommend everyone should follow?

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Rachel Jacobs, An agency expert who will simultaneously educate you and lambast you for being too posh (at least in my experience).

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Tim Richardson, Founder @ Your Basket Is Empty. A fantastic podcast that has opened my eyes to the way DTC brands operate.

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Chris Lavoie, Tech Partnership Lead @ Gorgias. I literally save everything Chris posts on Linkedin and revisit his posts at least a few times a month. If you’re building a technology partner strategy, I recommend following Chris.