Eric Bahn doesn’t typically invest in direct-to-consumer businesses. Yes, Bahn’s early stage venture firm, Hustle Fund, has a few D2C companies in its portfolio, but he only considers such investments when the founders are adept at brand building, performance-based marketing and customer retention.
“The problem is that it’s very rare to find founders who have mastered this trifecta of skills I think are necessary to run a D2C successfully,” Bahn said during a recent Oracle NetSuite sponsored webinar.
One founder that rose above the crowd is Noura Sakkijha of Canadian jewelry startup Mejuri. The five-year-old company, which bootstrapped itself during its early days before raising $28 million in seed funding, has become a sort of online cult retailer in a few short years, and Sakkijha joined Bahn to share some of the things she and her team have done to accomplish that.
It Started With the Brand
Sakkijha was especially clear about one thing: Mejuri made brand-building a priority from day one. She said that establishing the kind of connection with customers that leads to a strong brand requires a deep understanding of what your company stands for and the ability to be consistent in presenting those values.
That requires some self-searching. What is the business, and what is it not? And how does it demonstrate this with every step it takes? The answers to those questions can bring the kind of consistency that builds a brand.
“It’s not a big campaign that you put out there,” said Sakkijha.
Sakkijha also suggested that the channels a D2C startup chooses can go a long way toward forging a brand connection with customers. To get there, Sakkijha recommends lots of A/B testing to find out what channels work and which ones don’t. She urged webinar attendees to set up KPIs in order to monitor how close each channel comes to matching the brand’s vision, and not get attached to any single channel.
“You can’t put 100% into one channel,” she said. “You need to diversify.”
But Sakkijha made sure to point out that brand is about more than customer connection and channels. It’s the supply chain, fulfillment, human resources and product quality. It’s the customer experience, from shopping to problem solving. Paying close attention to all of these areas leads to organic word-of-mouth growth, which Sakkijha said is preferable to coaxing business by purchasing ads, particularly for startups.
Injecting Influence into Marketing
As for marketing, Mejuri took a highly non-conformist approach during the company’s early days, completely eschewing any paid marketing for months. Sakkijha just did not see that as a way to build community, so she chose a different strategy, instead forming partnerships with online influencers and like-minded brands.
When partnering with other brands, Mejuri sought companies with similar customer demographics that were at similar stages. (Sakkijha said partnering with more established companies often leads to imbalance in the relationship.)
Similarly, when Sakkijha looked for influencers to partner with, she didn’t look to the large, best-known influencers, but rather she targeted what she called “micro-influencers” who have a tight connection with their communities of followers.
In choosing like-minded companies and micro-influencers to partner with, Sakkijha recommends not being influenced by numbers of followers. Instead, she suggested looking at the relationship partners have forged with their communities. She said she especially likes to see that partners’ communities are asking questions and engaging with content.
Retention Recipe: Trust and Fresh Content
Jewelry isn’t an industry that’s historically had great customer retention. According to Sakkijha, jewelry retailers have traditionally targeted men looking to buy gifts for their wives, and often these were significant purchases that weren’t likely to be followed up any time soon.
As a third-generation jeweler (she followed her father and grandfather in the business), Sakkijha knew that if she wanted to have customers coming back over and over again, she’d have to approach things differently.
So Mejuri doesn’t specialize in engagement and wedding rings. Instead, the company sources jewelry products for people to wear every day, and it wants them to think of jewelry the way they would shoes or bags.
In order to engage its customers with that profile of product, Mejuri has adopted what Sakkijha calls a Monday drop model. The company introduces a few new products each Monday, committing to those products for at least four to six weeks. That amount of time allows the company to get a feel for what’s selling and what isn’t. It also enables Mejuri to stay on trend, reflecting changing tastes.
And as Sakkijha points out, it’s not just about offering new product.
“The combination of trust and fresh content brings people back,” she said.
Lest it sound as if Sakkijha is a startup sage of sorts, she took a moment to stress the value of having a network of mentors to turn to for advice. And Sakkijha said she isn’t shy about knocking on their doors when things don’t go as expected.
“I’m the kind of person who likes to learn from others, especially those who’ve been there, done that,” she said. “I still surround myself with a lot of mentors, and I reach out to them if I have a sticky situation.”Learn how NetSuite’s software works for startups.