The Customer Creator Principle

There's a little-known strategy powering conversions, profits, and YOY growth for countless successful DTC brands - a principle that leverages ancient psychology and modern technology for maximum impact. 

In good times and in bad, this principle is the cornerstone of any effective marketing campaign. Even in environments where CPMs are rising. Even when ROAS is unreliable.

Businesses that don't possess this knowledge struggle to maintain momentum and hit their goals. Rather than their efforts compounding over time, each new marketing campaign is just as difficult as the last. 

But with this strategy on your side? 

You'll be able to optimize ROI across your entire funnel... without spending another cent on A/B testing, expensive creative or high-risk campaigns that rely on more luck than skill.  

And although this strategy drives performance for brands of all shapes and sizes, most business owners and marketing professionals don't even know it exists. 

So, what is this strategy? 

It's something that we call "The Customer Creator Principle". 

It's the key ingredient to turning drive-by website visitors and lukewarm prospects into committed customers. 

That might sound like a fantasy to you right now. But don't worry! By the time you've finished reading this article, you're going to understand: 

1. Exactly how this principle works.
   
2. Why it's so effective for DTC brands.
   
3. How you can put it to work for your business, too. 

And if you need some extra help putting these insights into practice for your business, no sweat: 

(Bonus: three lessons to turn these insights into revenue)

The Customer Creator Principle Defined

The Customer Creator Principle = The most powerful marketing channel you can have as a brand is the positive, uncompensated, online recommendation of a person with influence on potential purchasers of your products. 

Simply put - Customer Creators are an incredibly valuable asset for any ambitious DTC brand. 

This rare breed of highly satisfied customers, by sharing their experiences of buying from you online, have a positive impact on dozens, hundreds, or even thousands of potential buyers over time.

Customer Creators: 

• Leave glowing photo and video reviews for your products
  
• Share posts of themselves using your product on social media
  
• Speak about your brand to their friends and family
  
• Share your referral code whenever they get a chance to do so
  
• Buy from you repeatedly
  
• Recommend (and defend) you over competitors

And most importantly - they do all this without getting paid to do so.

Rather than giving them money or free samples to shout you out, these are real people who passionately support your brand because your product means something to them. They go the extra mile willingly - because they care. 

Customer Creators have the ability to improve ROI across your entire marketing funnel. 

To be clear: this runs deeper than simply working with influencers or getting positive reviews from satisfied clients. 

An ever-growing base of customer reviews, influencer shoutouts and brand collaborations is extremely valuable to any brand with growth ambitions. For proof of this, consider the following: 

1. 60% of buyers will pay more for a product that has good reviews - and 31% will pay even higher prices for “excellent” reviews
   
2. Research indicates that influencer marketing returns $5.70 for every $1 invested in the channel (assuming product/audience fit).
   
3. Brand collaborations (both between DTC companies and in tandem with partners outside the industry) have been highlighted as a key growth channel for ecommerce by leading experts. 

But there’s a problem. Not everything is quite as positive as it seems: 

1. The World Economic Forum estimates that fake online reviews have a massive impact on consumer purchasing behavior - to the tune of $152 billion per year.
   
2. 4 in 10 consumers say they see too much branded content on social media (and trust influencers less and less as a result).
   
3. Measuring ROI on influencer campaigns and brand collaborations is a consistent issue for data-driven marketers: one which is challenging to solve. 

On the balance of evidence, two things are clear: 

1. Social proof is the critical asset for DTC brands.
   
2. The current best ways brands have of securing social proof, while powerful, have some problems. 

So, the question is: 

Why is having Customer Creators more effective than simply having lots of social proof to rely on? 

The answer might surprise you. Read on.

The Real Issue Bottlenecking Conversions and Limiting Customer Lifetime Value

The average person is exposed to thousands of ads on a daily basis. 

Surrounded by so much noise, most consumers have learned to tune these advertisements out. 

They scroll past intrusions into their social feed. They skip Youtube ads. They ignore sponsored posts, check out multiple sources of reviews online and look for trusted brands they can rely on above all else. 

Consider your business. There's a good chance that thousands of potential customers have been exposed to your ads over time... 

But, for one reason or another, they didn't convert. And now, they might not even remember your name. 

There are a couple of common reasons why this happens. For instance:  

1. Your prospect doesn't feel that your offer is worth the cost.
   
2. Your prospect is not clear on what core benefit they're going to obtain from using your product.
   
3. Your prospect has no incentive to take action at that moment.

These are common objections that any well-structured marketing campaign will address, helping to remove roadblocks that stand between you and your customers at every point along their buying journey. 

However, solving any of these issues fails to address the real problem: 

Your customers don't trust you. 

Trust is everything. Without a solid foundation of credibility, you have zero chance of building meaningful relationships with any prospective customer. 

The reason why is simple: 

The Trust Gap. 

The Trust Gap: What Is It and How Do I Cross It?

Between your business and your prospective customers, there's a divide. 

Like a ravine running 500 foot deep, this chasm is what prevents prospects from crossing that threshold and turning into repeat customers. 

How wide that gap is depends on the distance between: 

1. Your customer's condition before they make the decision to purchase from your brand.
   
2. Their projected end state after successfully achieving transformation thanks to your offering. 

The bigger the promised transformation, the wider the gap. 

If the gap is small (the type that can be crossed with a running jump), then your primary obstacle is going to be how motivated prospects are. 

To understand this, look no further than the Motivation Equation, a popular psychological framework that gives us an effective model for conversion rate optimization. 

There are four variables that impact how motivated you are to take a particular action: 

Expectancy = How confident you are that you can do what is being asked of you.

DTC Example: making a one-time affordable purchase is easy, but committing to an annual coffee subscription is hard.

Value = How valuable you perceive the outcome will be if you achieve it.

DTC Example: Commodity products that fail to address a core need for your audience (e.g. poorly differentiated stationery) will be seen as less valuable than products which offer transformative benefits e.g. a 90-day supplement bundle that helps you lose weight and build muscle.

Impulsivity = How likely it is that you will be distracted while completing the necessary action.

DTC Example: One-click checkout processes are faster and easier for consumers to stick to than complex processes that require buyers to jump through hoops to make their purchase. 

(That’s why Loox offers the first post-purchase upsell solution that displays photo reviews).

Delay = How long it will take to achieve your desired outcome.

DTC Example: Having a product arrive 2 days after purchase and being able to use it “out of the box” is easy. Having to wait for 2 weeks, or needing to learn to use it is more difficult to commit to. 

Taking these four variables into account, it’s clear that optimizing prospect motivation is a function of: 

1. Increasing Expectancy and Value.
   
2. Decreasing Impulsivity and Delay.

For example, if you're selling novelty socks, your winning formula will be to: 

1. Increase Expectancy by showing prospects exactly what they can expect when they buy from you through the power of visual reviews.
   
2. Increase Value by having lots of unique designs that your customers can't get elsewhere.
   
3. Decrease Impulsivity by offering time-sensitive discounts or issuing limited drops of new merchandise.
   
4. Decrease Delay by shipping your product quickly and incentivizing rapid action.

If, on the other hand, you're selling high-ticket electronics or premium cosmetics, you're going to encounter more resistance. 

It's not enough to simply increase how compelling your offer is and decrease friction in the process. 

Doing these things is important - no question. But if you're standing on the other side of a 500-foot chasm, the obstacle probably isn't how compelling your side of the divide looks. 

What your prospects are more concerned with is how they're going to bridge that gap. 

The answer? 

Credibility. 

Credibility crosses the divide between you and your customer, giving them everything they need to make their journey.

(As a rule of thumb: the bigger the transformation, the more credible you need to be.)

Once this is in place, sure - all of the things we discussed above are great to focus on. Make your offer more compelling! Offer time-sensitive discounts! Inspire action! 

But all of these tactical approaches are just Band-Aids if the underlying issue isn't addressed. 

This is where most marketers run into difficulty.

As professionals, we're all well-versed in what it takes to address customer objections, solve their pain points, and make our offers more exciting...

However, if we don't take the time to establish a foundation of credibility with them first, this will be wasted effort. 

The good news here is that removing this bottleneck will help to lift conversions across your entire funnel... at no extra cost. 

The bad news? 

There is more to credibility than simply soliciting customer reviews, purchasing shoutouts from influencers, or finding another prominent brand to collaborate with. 

Unless you already have a solid foundation of credibility, these things are usually ignored. Most people who have no specific reason to trust you will assume: 

1. Any reviews you have chosen to highlight are cherry-picked.
   
2. Influencers you are paying to promote your product will always try to make you look good.
   
3. Any brands you collaborate with have a financial incentive to say nice things about you.

But with a credible brand position, all of these assets help to drive action. 

There is compelling research to support this notion. For instance, consider the following:

1. Consumers are 15% more likely to buy after reading verified reviews versus unverified ones. Why? Verified reviews are more authentic - they’re credible. (Loox displays verified badges on reviews).
   
2. If comparing two products with similar ratings, most buyers will select the one with more reviews. Why? The more people have used something, the safer a proposition it is to buy it… and the more credible it appears. (Loox displays the review number count).
   
3. 67% of B2B buyers prefer to see a mix of positive and negative reviews when evaluating a brand. Why? Businesses that aren’t afraid to showcase problems people have had with their offering are seen as more credible. (Loox lets you respond to negative reviews to gain even more credibility).

Credibility greases the wheels of communication. It’s the asset that ties everything else together. When we have it, everything runs smoother. Without it, friction keeps building up over time, until movement grinds to a standstill.  

So, with that in mind, let’s talk about how you can leverage a simple set of rules to build credibility for your business. 

How Any DTC Brand Can Create A Rock-Solid Foundation of Credibility

Our main learning so far:

The Customer Creator Principle states that the most powerful endorsement your brand can receive is the positive, uncompensated, online recommendation of a person with significant ability to influence potential purchasers of your product. 

To support this, we also covered the following:

1. Credibility is the foundation that everything else you do as a business is built on.
   
2. Social proof like positive testimonials, influencer shoutouts and brand collaborations is valuable, but it doesn't replace the need to build a trusting relationship with your audience. In the absence of trust, these assets don't move the needle for your business because people are predisposed to ignore your advertising.
   
3. Without a credible brand position, ROI across your entire funnel will be stunted. But with this box ticked, you'll be able to effortlessly increase profitability, ROAS, CLTV and every other metric that matters to your business. 

With these points established, we are now ready to discuss how you can optimize for credibility across your entire business. 

To help you get started right away, we've distilled our framework into two simple rules that any brand can put into practice (and benefit from).

Over the next few sections, we’re going to unpack each of these rules and discuss exactly how you can put them to work for your brand. 

(You'll also get three exclusive lessons to help turn the insights into a high-ROI game plan.)

Rule #1: Think "Remarkable" Before "Marketing".

We live in a world where the best deals in any market are only a tap, scroll, or Google search away... and this has radically impacted what it takes to win in a competitive landscape. 

The game plan to dominate your space is different to what you would have used 10, 5, or even 1 year ago.  

It's not just about marketing anymore. Reaching your customers is easier than ever. But because there's so much competition for their attention, it has become very challenging to cut through the noise. 

You've seen the impact this has first-hand: rising CPMs, declining engagement, fuzzy ROI across all platforms, and an uncertain future for the channels DTC brands have grown to depend on over the past decade. 

As Shopify’s report “The Future of Ecommerce” says:

“As more businesses are online, it’s harder and harder to be found by new customers. Because it’s so easy to start online now, there are definitely rising costs of customer acquisition. Paid ads are getting really expensive, not to mention the Apple iOS 14 release, which has made it more difficult to track results in ad spend.”

Mel Ho

Senior Product Marketing Lead, Shopify

In their struggle to reach the top, most marketing campaigns end up competing in a blood-soaked race to the bottom.  

“Some brands are seeing ad costs go five times higher than [before] to drive the same amount of traffic.”

Ben Jabbawy

Founder and CEO, Privy

The solution to this problem is as simple to understand as it is challenging to execute: 

Focus on creating remarkable products. 

Remarkable products attract the attention you’re seeking.

Rather than needing to push your offers on apathetic prospects, you'll have excited customers seeking you out. Customer Creators will gladly recommend your brand, helping your business gain more and more credibility over time. And the people who buy from you will come back again and again - because you offer something they can't get anywhere else. 

Remarkability doesn't replace the need to market your business entirely. But it does ensure that you'll get the most bang for your buck with every dollar invested in promotion. 

Rule #2: Focus on the Long-Term, Not the Short-Term. 

Think about the people you have the deepest connections with. 

The people you're close to have a significant influence on your beliefs. From the clothes you wear and the car you drive to the products you buy and your general outlook on the world, their opinions matter.

These people are prime examples of Customer Creators. They may not have thousands of followers that value their perspective, but their judgments matter to the individuals they’re closest to - like you.

And it’s not just because you've known them for a long time. There are also some people you've known for the same duration that you don't feel all that close too.

The opinions of this second group likely don't affect you all that much. Rather than letting them influence your decisions, their input is usually just background noise. 

While there are many factors which influence how strong our relationships are with other people, there's one principle which holds true in practically every case: 

It's easier to build meaningful connections with people who are focused on building for the long-term, not just the short-term. 

And what's true for people is just as true for brands. 

The businesses that we connect with most easily are those which are more focused on nurturing a long-term relationship with us. 

Contrast a brand you trust with one you have negative feelings about. Which one seems to care about your relationship?

People's memories are better than you think. And like it or not, everything you do has an impact on how credible you are perceived to be. 

High-value DTC brands understand this and use this heuristic to forge strong connections with their audience that pay dividends over and over again for years... not just once. 

Conclusion

We've covered a lot of ground in this article. 

And though we've talked about this topic from many different angles, everything has been built around one core idea - The Customer Creator Principle. 

One more time, here's what that is...

The most powerful endorsement your brand can receive is the positive, uncompensated, online recommendation of a person with significant ability to influence potential purchasers of your product. 

This means that the best ambassadors for your business are people who are so engaged that you don't need to pay them to promote you. Actually, you get paid by them.

You can't buy that kind of endorsement. Sure, you can collaborate with influencers, partner with other brands in your niche, and spend limitless amounts of money on advertising. But without building a foundation of trust with your customers, you'll forever limit yourself. 

The best, most successful ecommerce brands understand this. 

They know that credibility through Customer Creators is the key to maximizing ROI across their entire funnel. 

And they know that, in a world where every industry grows more competitive by the day, this could make all the difference. 

No matter what your goals are, you can't go wrong by becoming more credible. 

That's exactly how you'll attract and retain the support of Customer Creators... 

And how you'll enjoy all the benefits they create for your brand, too.