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How to scale a D2C business: A COO’s perspective

A Fractional COO's perspective to scaling your D2C business cover image

In his book The Valuation of Digital Intangibles, Prof. Roberto Moro-Visconti defines scalability as “the ability of a process, network, or system to handle a growing amount of work.” Now, you’ll get to read a Fractional COO’s take on how to scale a D2C business. 


The rapidity by which digital businesses can scale compared to traditional industries explains both their meteoric rise in the world of commerce. On the flip side, scaling too rapidly can cause a startup to crash and burn. 


Managing the ability of your D2C startup to handle increased business is a COO’s business. The exact process that a COO engages in will depend upon the nature of your D2C business and the product it provides. 


Let’s look at seven keys necessary to scale your enterprise and the role of a Fractional COO in establishing a framework for success. 


7 keys to scaling a D2C business (and how your Fractional COO can help)


A D2C business deal, with two people shaking hands in sing of agreement

Number 1: Understand Your Value


It goes without saying that any successful business needs to be able to differentiate itself from its competitors. Without being able to understand and communicate the value you provide, you will not be able to properly differentiate yourself from your competitors in the marketplace. 


A D2C business can provide value to the market through one of the following ways:

  • Providing a brand new product or service. Can you remember the world before the existence of ride sharing or dating apps? 

  • Improving upon the quality, variety of offerings, ease of use, price, or timeliness of an existing product. Until Canva came along, everyone was at the mercy of PowerPoint and dodgy clip art albums on the net.

  • Copy-Paste. Bring a tried and tested concept from one market to an untapped market. This phenomenon usually occurs when expats from one part of the world return to their home country and introduce a new product in a market where it never existed before. Some examples of these are mobile banking apps and apps used to manage communications and billing in multifamily dwellings like condos and apartment buildings. Another way this can be achieved in the original market is by expanding the number of languages that a product is offered in. 


It is important to understand how you distinguish yourself from your competitors, or if you are providing a completely novel D2C product or service, why your offering is both beneficial and necessary to your customer base. 


A knowledgeable and experienced Fractional COO can help you clarify what makes you both unique and valuable but also help guide you in a logical manner as you begin your scaling journey.


Number 2: Market appropriately


The American Marketing Association defines marketing as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” 


The principles behind appropriate marketing for a D2C business are not dissimilar to a brick and mortar establishment. These include –

  • Knowing your customers’ needs and pain points. Corollary to this is communicating how your D2C business can meet those needs or relieve these pain points. 

  • Establishing your presence. If your target market is college students, TikTok is where you need to be. Stay off Facebook. 

  • Utilizing a marketing plan. It is critical to budget properly across the most logical and effective communications channels for your D2C business and get the best ROI on your marketing dollars. 


A Fractional COO will not only have an understanding of marketing but more crucially the work tasks that marketing requires from within your startup. The best products and services will never see the light of day unless the importance of marketing and marketing activities are appropriately communicated to your staff and are integrated as part of your day-to-day business functions. 


Number 3: Relationship Building and Stakeholder Management


Cultivating and maintaining relationships with your D2C customers is predicated on understanding your base and which segment of your base is the most profitable. It is necessary to prioritize relationship building with your most important customers as these are the people who will provide both repeat business but help evangelize your services to others. This, friends, is all Business 101.


However, you also need to consider other stakeholders as well, including communities impacted by your startup, its products, and its activities. Who can forget Dapper Dan and his struggles within the fashion industry in the late 1980s and early 1990s, which within that era could have been developed into an opportunity for collaboration instead?  Have you considered if there are any unintended negative consequences in how you manage stakeholder relationships and relate to society at large as you build your customer base? 


If you or your staff need assistance in how to build client relationships and constructively manage stakeholders, a Fractional COO is just the person to step in and evaluate your processes to identify activities where relationship building can be emphasized and developed.  


Number 4: Engagement


Customer engagement goes hand-in-hand with relationship building. 


In a D2C business it is rare that you will see your customers face-to-face the way a deli owner would sell a sandwich to someone working across the street. But just like the deli owner and her staff would take the time to learn the orders of their regulars, so should you. Likewise, a tourist or someone stopping by the neighborhood from another part of town would also want to feel the same warmth and respect as a decades’ long customer. 


Many D2C businesses operate on a subscription model or are built on the premise of repeat business. While it is tempting to focus on attracting new customers through promotions, doing too much too soon solely for the sake of bringing on additional clientele may be detrimental in the long run if you neglect your most profitable and loyal core customers or if you bring on so many new clients that you do not have the adequate amount of staff and resources to accommodate them. 


A Fractional COO will suggest ways to reward your core to protect what you have already established and also to maintain a level of control during your scalability journey.


A customer service agent looking at the screen smiling

Number 5: Service with a smile


One episode of rudeness or ineptitude on the part of your staff can send a long standing customer running for the door. And in the age of social media where it is so easy to voice displeasure about customer service, ill mannered, negligent, and/or poorly trained employees can be the downfall of your startup. 


Long wait times and incomplete or insufficient responses to queries are also signs that your startup does not have enough resources to prioritize customer engagement. How your startup communicates with prospective and existing customers is so critical to its success. Or failure. You simply cannot scale without having a plan in place on how to deal with the public in a prompt, friendly, and knowledgeable manner. 


Running a smooth functioning operation is the bread and butter of a Fractional COO. By meeting your team and engaging with your systems and processes on how you interface with the public (and how the public interacts with you) can prevent potentially embarrassing reputational damage via social media as you engage in scaling and help you retain and obtain clientele. 


Number 6: Seek influence


In the case of D2C businesses which sell consumer goods, such as cosmetics, a typical tactic to seek influence is to recruit influencers on social media and leverage their audiences to promote and sell their products. 


If your startup is not in the business of producing a tangible physical product how you seek influence will vary upon your audience. If you are a fintech startup and you are targeting adults in their early to mid-twenties, finding a brand ambassador on social media may be one way of reaching your target audience. 


However, if your product is more niche or novel for its time, you may have to combine several methods to seek influence and build hype. Facebook, Gmail, and Clubhouse all started as invitation-only services, relying solely on personal networks, which combined a sense of exclusivity with a means to manage scalability. 


Traditional methods of seeking influence, such as attending and sponsoring conferences, conventions, and trade shows and publishing white papers may also be part of the mix. With the advice of a Fractional COO, your startup can incorporate influence seeking within a greater marketing plan. 


Number 7: Track and Measure Your Performance


Like everything else in your operation, if you are not adequately tracking and measuring your performance, you will never be able to scale successfully. A Fractional COO will be able to guide you through your scaling journey and recommend the best analytic tools so that you can understand both where you are within your marketing plan and what you need to do to reach the next level. 


Bhuva Shakti is the COO you need to scale your D2C business.

Wherever you may be in your scaling journey, a Fractional COO can provide you with invaluable knowledge and experience across all fronts. If you are running a D2C startup, it is critical that you bring on someone who is fluent in both traditional business operations and tech. Take advantage of Bhuva’s decades of experience as a tech leader and schedule your consultation with Bhuva’s Impact Global today! 





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