Lindsay McCormick, CEO, and founder of BITE, is tough and full of heart. McCormick bootstrapped her company from the living room to one of the fastest-growing personal health brands in the United States, remaining profitable the entire time.
She meticulously applied the scratch your own itch formula, which allowed her to know her customers intimately. As the company has grown, she has taken this one step further and spends over 100 hours a year calling her customers to really get to know and understand them.
“There's never been a more important time than knowing your customer and really understanding them and caring about them and not just seeing them as a customer, but really caring about them. Taking the time to learn everything you can about them.”
They run super lean and tight operations and focus on building products of quality while investing in innovative new product launches. All of this is made possible because of strong relationships from customers to suppliers.
To me, the best part of speaking with her was her genuine nature and her pulse on the business while always keeping the greater purpose, or mission of the business, sustainability at the forefront.
By doing this, BITE has successfully expanded from oral health into the personal care space, allowing them to take an even bigger BITE out of plastics, leading the charge towards environmental wellness.
In turbulent times like now, McCormick believes that better businesses will be the result. Here are some ways we discussed in which you can strengthen your business in the current economic climate but also thrive in the future.
Get to Know Your Customer
In order to be successful, it is more important than ever for direct-to-consumer (DTC) companies to know their customer base. With the current state of the economy, there are a number of macro-environmental anomalies that can impact businesses. Inflation is one such factor that can have a significant impact on businesses.
As prices rise, consumers may be less likely to purchase items, or they may purchase items from cheaper alternatives. Knowing your customer and understanding how this might affect them will help you make informed decisions about pricing and product mix in order to keep customers loyal.
Run Lean Operations
In order to survive in today's economy, DTC companies will need to focus on lean operations. This means streamlining their processes and becoming more efficient. Additionally, they will need to focus on their customer acquisition costs and lifetime value. By doing so, they can ensure that they are profitable and can weather any economic storms that come their way.
Focus On Building Quality Products
In a time of inflation and economic uncertainty, it's more important than ever for DTC companies to focus on building quality products. Not only will this help ensure customer satisfaction, but it will also increase the chances of repeat purchases.
If you are a subscription-based company, if they know the quality of the product is there, customers are more likely to maintain their subscription. The cost of customer acquisition is on a steady rise, it's easier to sell to existing customers than it is to find new ones, so make sure your products are of the highest quality.
Invest in Innovative Product Development
In order to stay ahead of the competition, DTC companies need to continuously invest in innovative product development. This will help them maintain their position as market leaders and ensure that their products are always in demand.
Additionally, by investing in new product development, DTC companies can also keep their prices competitive. This is an important strategy for ensuring that customers continue to purchase your products.
Develop Relationships With Key Suppliers and Vendors
In order to have a successful business, you need to have great relationships with your suppliers and vendors. Good communication is key to maintaining these relationships. You should always be clear about your needs and expectations, and be responsive to their inquiries. Be sure to establish trust and respect, so that you can work together effectively.
Finally, don't forget to show your appreciation for their help in keeping your business running smoothly. Showing thanks will only strengthen the bond between the two of you.
Implement a Smart Supply Chain Management Strategy
In order to keep up with the rising costs of goods and services, DTC companies need to implement a smart supply chain management strategy. By sourcing materials and components from the US, they can avoid the potential tariffs and other economic uncertainties that come with importing goods from abroad.
Additionally, by investing in US-based manufacturers, they can support domestic jobs and help stimulate the economy. However, it's important to note that not all parts of the supply chain are created equal. Not all ingredients or components can be sourced locally; in other cases, sourcing locally may not even be an option.
Make sure you’re buying from suppliers who can provide you with the quality, reliability, and availability you need for your products, and above all, vendors and suppliers you can pick up the phone and have a conversation with. Sometimes the most old-school principles work best in maintaining a solid supply chain.
To Summarize
One of the biggest challenges for businesses today is staying profitable in an environment that almost seems to be a perfect storm of challenges for DTC and CPG companies. To succeed, DTC businesses will need to focus on strengthening their operations and developing new products that will drive future demand. It will also be important to keep up with consumer trends and remain relevant to the needs of your customers.
Like McCormick, the most successful business owners are those who have a vision for the business and never lose sight of it. You will have some bumps along the way as you learn as much as you can and implement the strategies necessary to become more successful. Over time, you will find that your business is stronger and more profitable than ever.