Effective and Efficient employment,deployment and allocation of capital is always a challenging task for any company. When it comes to D2C companies, the utilized capital usage must be more calculated and strategized because it plays a very crucial role for the growth and success of the company as the business operations are carried out without any hindrances.
The question of ‘Where and how to use the utilized capital’ can be resolved specifically by D2C companies by concentrating on these key areas and strategies:
Marketing and Advertising: It is important for a D2C to deploy a sum of money for marketing and advertising as they help in gaining customer’s attention and enhance customer engagement which will eventually drive profit and growth.
Research and Development: Innovating new products and services and developing the existing ones constantly will help the company to meet the customer needs and stand out in the market. So allocating resources to research and development is never a bad idea.
User experience: Allocating capital for enhancing customer experience and enhancing customer support system is mandatory for a D2C company to retain and convert potential customers. Companies can invest in Customer Retention System (CRM) to strategically analyze and improve their retention rate.
Logistics and Shipping: D2C companies should consider investing in Smart Logistics Management tools and advanced last mile delivery solutions to give customers seamless and efficient deliveries.
Retention and Acquisition Strategies: While there are many retention and acquisition strategies, a company can go with a specific retention and acquisition Strategy according to their business activities. But the main focus should be on increasing customer lifetime value By nurturing the customers that they already have, and also by turning potential customer into actual customers
Brand Building: Investing in brand building will give a D2C company a big boost to their growth as It develops and increases the loyalty of the company. Companies can even create engaging contents like social media posts, blogs, newsletter, etc to stay connected with their customers.
The amount of allocation of capital varies from company to company depending on the type of business activity and their operations. If funds are under- or over-allocated or even mismanaged to the above-mentioned areas, it will be detrimental to the sustainability, viability and growth of the organization. Therefore, It is in the hands of the company to wisely specify the margin according to their wants and needs.