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In episode 99 of the Customers Who Click podcast with Ian Yung, VP of Growth at Parachute Home, we’ll be exploring how brands can move away from aggressive discount messaging.
Avoiding overdiscounting in the DTC space is something I’ve been very vocal about for ages. I’m not saying to not do it at all, I’m just saying that doing it without any kind of strategy and only as means to drive some extra revenue will result in quick gains that’ll have a ripple effect on your future relationship with the customer - the only loyalty some of them will have is for your discounts, or those of your competitors if they happen to give a better deal.
Another great point my guest also made which a lot of brands need to understand is that people don’t buy just because of a discount or a sale. They still have to have a want and a need for your products. If the motivation isn’t there, then it'll take a very strong promotion to convert someone, and even then they may not be the sort of customer you want to be acquiring.
Ian is the VP of Growth at Parachute Home, a DTC brand selling premium quality home essentials. Ian’s had some great experience in a few different industries, including the Flash Sales industry, with B2B and B2C experience as well as experience growing two-sided marketplaces. You can connect with him on LinkedIn, or head over to https://www.parachutehome.com/.
00:55 - 06:03 - Biggest Contributors to Parachute Home’s Rapid Growth - Three things: the pandemic, since people had more time on their hands and spent most of it at their homes so they wanted to make it as comfortable as possible; second, high retention rates and people coming back for repeat purchases, and third, Parachute have considerably upped their paid marketing efforts. Ian and his team are also big on organic reach and word of mouth as well, focusing on providing a great brand experience and products to encourage that.
07:47 - 12:45 - Ian’s Approach to Experimenting with Different Channels - Ian believes that if you don't continue to explore your boundaries, every channel will eventually peter out; everything will reach a plateau and then your growth will plateau, too. It’s good to be able to shift your budget elsewhere once a channel becomes less and less profitable, rather than increasing it over and over again. This is especially true now with the turbulence around Facebook advertising and iOS updates.
15:00 - 18:39 - How to Grow a DTC Brand Without Heavy Discounting - Yes, people love discounts, but none is going to buy something just because it's on sale if they don't like the product to begin with. In Ian’s words, “ Discounting seems like a seasoning that you add on top of an acquisition dish, but nothing that can stand on its own”. Instead, Parachute takes customer research seriously and focuses on understanding what makes people buy their products and use that information to fuel their messaging. That way, their customers buy their products because they truly want to and believe it’ll help them achieve their goals, and not because there’s a sale on.
Another great thing Parachute is doing is they design and source their own products to ensure they deliver on the brand promise. Many retailers simply go to China and purchase goods there, but Parachute is more into listening to their customers and creating products that bring real value to their customers.
18:55 - 27:12 - How to Get More Out of Your Customer Research - First of all, you’ve got to speak to your customers - and I’ve certainly noticed that not enough brands do. But there’s another catch. While qualitative research in general is a fantastic way to gather customer insight, go beyond surveys (as they can be biased) and look into the quantitative side of things too. Discover how people interact with your products, look at your sales, customer service and returns data as well to understand how your customers truly feel about your products and brand. Additionally, spend some time learning about different research methods, their advantages and shortcomings so that you’re getting the whole picture, and not just a little peek into your customer behaviour because that leaves room for assumptions.
28:15 - 40:03 - Ian’s Tips for Other Brands Looking to Move Away from Heavy Discounting - Ian’s not saying don’t do discounts because they don’t work - they always do, without fail. But without a strategy, they’re just shortsighted quick cash injections that dilute your main messaging since people will be more focused on the discount than your product value messaging. You need to go back to basics and figure out what your brand stands for, and what is the reason your customers engage with it in the first place - and make sure your product delivers on that promise.
41:32 - Who Would Ian Like to Take For Lunch in the D2C Marketing World?
Ryan Reynolds to talk about his creative process behind the peloton campaign.
42:38 - Ian’s Must-Have Ecommerce Tools:
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