Search By Topic The Green Supply Chain Distribution Digest
Supply Chain Digest Logo

Supply Chain News Bites

Supply Chain Graphic of the Week: The Economics of Brands Going Consumer Direct


Focus must be on Lifetime Customer Value, McKinsey Said, Due to High Acquisition Costs


Dec. 10,  2020


With consumer behavior changing radically, and many retail channels in turmoil, consumer goods companies and brands have little alterntive but to start or expand direct to consumer strategies (DTC).


But the economics are very different. It costs twice as much to acquire a DTC customer as one buying through traditional retailers, the consultants at McKinsey say. So, consumer good brands have to thinking thinking from the perspective of lifetime customer value, as shown in chart below.



Source: McKinsey


As can be seen, McKinsey work to build a DTC business where the lifetime customer value is twice the cost of customer acquisition costs before fully scaling the program.


Any reaction to our Supply Chain Graphic of the Week? Let us know your thoughts at the Feedback button below.


 Your Comments/Feedback




Follow Us

Supply Chain Digest news is available via RSS
RSS facebook twitter youtube
bloglines my yahoo
news gator


Subscribe to our insightful weekly newsletter. Get immediate access to premium contents. Its's easy and free
Enter your email below to subscribe:
Join the thousands of supply chain, logistics, technology and marketing professionals who rely on Supply Chain Digest for the best in insight, news, tools, opinion, education and solution.
Home | Subscribe | Advertise | Contact Us | Sitemap | Privacy Policy
© Supply Chain Digest 2006-2023 - All rights reserved