On Building and Scaling a DTC Brand
So my experience building a D2C brand was launching Hue & Cry back in 2009-2010 and helping expand that to multiple product categories, multiple SKUs, within those product categories, into a profitable, multi-million dollar business.
The most important metrics to look at for a business like that is profitability. Making sure that what we're doing from a day-to-day perspective is smart from a cash perspective, but also profitable and also just extremely top-line focused as well. So it's this weird three-legged stool between profitability, creativity, and being original and also doing something that customers resonate with.
On Specific Metrics to Watch
The most important metrics in my role at Hue & Cry were revenue, traffic, AOV, and conversion. Looking at those four metrics would really help identify what was
going well within the business. So revenue - it's not just revenue at a specific time; it's also looking at it over historical data and looking at it over a period of time to make sense of where it is today and if there's seasonality, if there's growth from a year-over-year perspective that's amazing.
Traffic is important to look at. You know that informs PR, that informs paid, that informs how well the site is working, if the site is working at all. So it's a very high-level metric that can give you the day-to-day health.
AOV really spikes once you increase your products or your product categories. If you have products that work well together and you can have them be in one batch working with each other and being purchased together, that will increase AOV. And that's one thing that really increased our revenue at a specific point in time.
And lastly, conversion is a great market sign for when you're launching your brand. If you're rebranding you can see how conversion has changed since that rebrand and as a business lives, seeing how that conversion can improve or gets worse, is a great sign to seeing what you've done the past that could lead to that change and help you learn for the future.
What Metrics Do Teams Often Miss When Building and Scaling a DTC Brand?
So in my experience starting Hue and Cry, and running Hue and Cry, and then consulting for various businesses, the big mistake that's made often is that the focus isn't on those top-line metrics. It's rather on individual marketing initiatives and not seeing how those marketing initiatives roll up to the higher level. It's easy to sort of get distracted by the flashy new things rather than taking a step back, seeing how the entire business could be run more efficiently, or looking at the entire business and seeing how all these marketing initiatives play hand-in-hand together.