4 Big Predictions On The Future of D2C Marketing

I was on a call with members of my team and we were looking at Claude and how Claude has a new feature where you can upload CSVs, spreadsheets, things like that, right? And it'll give you visual data, visual representations and interpretations of that data and you know, help you to figure out like for example, where roadblocks are on your sales funnel. And actually that is the example Claude used, you know, seeing like sort of how to optimize the sales funnel and a customer journey and things like that. So then that actually brought up the question of, you know, how long. So the AI is just better than us at running marketing campaigns. The short answer is I don't know. But the longer answer is probably, probably two years. That's the longer answer. That's my guess. You know, that's just me thinking about where AI is now of GPT4O and Preview and 01 Preview and Quad. And I'm somebody who uses it generated multiple eight figures of value this year using AI, right? If you, if you count people in my mastermind and kind of private group of business owners all doing between 3 and $300 million a year and they use a lot of the processes that I've created and taught them, I play a role or have an impact in generating half a billion to a billion dollars a year probably in revenue. Which sounds crazy if you don't know me or anything about direct response, but I. That's how it is. So say in two years from now I really can do all of your marketing put out, you tell what to do. It sort of runs and executes the campaign, acquires customers, all those things, what would happen? Right? What are the outcomes of that? If AI can basically run marketing campaigns, optimize those campaigns, acquire customers, really run and build and scale a direct to consumer business for you in two years from now. What does that mean? How do you win? Because everyone can do that. Isn't it just a complete equal playing field? So here's how I'm thinking about this. First of all, the people who get big now will still have an incoming advantage because if you are big enough already and you have enough revenue already, then you are able to spend more money, money potentially than somebody else who has a launch that campaign, right? Because the limiting factor becomes money. So even if like somebody, if we AI is realized profitable out the gate, I don't think it's so good that everything it does makes you money, but it's able to find the winning campaigns that will make you money. But that takes money and some Time to optimize. Let's say it takes way less time with AI still going to take some money. Maybe it takes less money still, but there's still going to be a strain of humans, right? There's still the constraint of customers and all these different products and offerings. And so like, how do you break through the noise even with really optimized campaigns? If it's true that in two years from now, AI is going to be doubt in enough that it can launch a new campaign, help acquire customers and help scale a business without really any human involvement, besides a bit of direction of what the objectives are and things of that nature. And by the way, maybe that's too optimistic. Again, it's three years, four years, five years, but it doesn't really matter. I think that if you run a DTC business or brand or offers, or you're a contractor, freelancer, service provider, you really need to be thinking about this. First of all, I think building a brand becomes more important than ever since. So if everyone can click buttons, beep boop bop and scale an offer or scale, you know, make sales in a sales funnel, what matters is a brand. Now AI can do the branding for you too. Okay, fine, but there's a limiting factor here, which is humans. The amount of humans, the amount of attention span, and how many brands they can engage with, interact and choose from, right? What cuts through the noise? Even if you can do cool branded stuff, you're gonna be competing with more new brands and not less. How do you win? I think one thing is you need to build a brand now. Make it a big brand that gets in front of a lot of people and then do a lot to build connections and try to create loyalty with your customer base and awareness in a broader market. I think you have to do that. Because if you can do that now, you stay positioned, right? How many new drinks have come but Coca Cola is still okay? Coca Cola can worry about market share sliding. People don't drink soda as much. People don't drink sugar. Coca Cola, you know, has issues. But all of the new drinks in different distribution and the proliferation of gas stations and at home soda, it doesn't matter, right? They're Coca Cola, they're still okay. Now that's a massive example of Coca Cola. You may not become Coca Cola, but if you build that brand, you're in a lot better shape to weather the storm. But you need to build the brand. Now. The next thing I think about is economics. Anything I'm doing these days for the glp, one company that I own a percentage of the new skincare company that I've launched. I want to grow into a big large brand as fast as possible. Anything I do, I want there to be a subscription component. Not just because you make lots more money with subscription and you have this great kind of nest egg right every single month. Why does that matter? We can pay way more money to acquire customers. So our margin in our GLP1 company first month is like let's say we make $120, right? For a custom customer profit. Let's say this is an example, it varies but $120, we'll pay $500 to acquire a customer. Why? Because we have this giant pool of like profit coming in that could subsidize it. And then we know people are going to stay on for several months. So I can pay $500. We have days where it's like $800. I'm just like, oh well, you know, whatever. But we have that build up. Somebody new comes in with GLP1s. How are they going to compete with us? Because ad costs have gone up. CPAs are much more expensive. What are they gonna do? They're gonna pay a CPA to people to make sales like okay, well if they're gonna use affiliates these days are probably gonna pay 250, $300 per sale. But there's no CH because pricing pressure is going down. So that becomes more competitive. There's always someone who will undercut a little bit. And so it's a race to the bottom of GLP1. So I call it this. When I came into the industry a year ago, I said eventually we'll basically have to give people semaglutide for free and or you know, a dollar or whatever it has to be, right? And that's it. And it's be a matter of what can you do to keep them on subscription for as long as possible and how do you build a halo or universe of additional products or services or things you can offer them that are higher margin. But GLP1 becomes commoditized. It already is a commodity essentially it becomes commoditized. Now you can offset that a little bit by building brand. But the reason this matters is somebody new comes in the GLP1s and so in them to compete with us and basically lose 200, 300, 400, 500, $600, whatever it's going to be before they make money both on the month one acquiring customers and potentially month two, month three, what needs to happen, they either need to have Millions and millions and millions of dollars that they're ready to throw and burn in order to get to that point. Which is risky, especially because we don't know how long GLP1s will be available to the public in this current form. I have a lot of thoughts on that, but I'm not going to get into them right now. But that's risky. But. So they either have to have, you know, get investment, 10 million, $20 million investment, have 5 to $10 million in cash that they want to put in by themselves, or they have to go so slow to acquire customers and build up that recurring that they'll never catch up because we're so far ahead of them already. And we're going to keep acquiring more customers and have more recurring. We can invest more money to where we can go negative for three months, four months, a year. It doesn't matter if we want to even do that and stay in the business. The point is it's virtually impossible for them to catch up unless there's a huge war chest. So let's go back to AI. If you build your brand now, you have a bunch of subscription revenue, you are, you know, this big brand that you're doing, let's say nine figures recurring and sud, anyone can enter the market with AI and have a profitable sales funnel. What becomes the limiting factor? Well, like I said, it's people, right? People are only going to choose from so many brands. But another factor is your war chest, the economics. So even there, great, your AI can fire customers and it should be profitable. But here's the thing, right? I can pay 2x3x5x10x more to acquire a customer than you can, right? And I've got this huge war chest and I can do it way more scale than you can. So even though AI in theory can do this, if I'm so far ahead of you on what I can spend to acquire customers, then you're still going to have a hard time catching up or reaching any scale because I'm going to beat you. And so actually, what I think happens potentially in this universe is cost to acquire customers will become way more expensive, not less expensive, right? CPAs will go up, not down, because if anyone can acquire a customer, you have to pay more to acquire a customer. How do you, how do you differentiate, right? Brand size, right? Market penetration, and then how much can you pay to acquire that customer? If someone ahead of you two years from now, when you have that magic AI tool, it doesn't really matter because they can pay way more than you to acquire a customer. And the second part of that that's really interesting is probably cost to consumer goes down because anyone can do a compelling offer that would convert. What are you going to. There's going to be downward pricing pressure on so many things. So I think a lot of things, whether this is supplements, skincare, high ticket items, maybe even info and knowledge products, I don't know. I have to think about that more. But that pricing goes down, right? There's downward pricing pressure. So the cost of consumer is going to get lower on all of these things while the CPA goes up. And the way you're going to win is from subscription. And I think that's interesting because there's a lot of people like there's a whole SaaS movement where they're talking about getting rid of subscription, right? People are tired of subscriptions. Go back to like a single use or single payment. I forget the terminology for this. Essentially pay once you get the software like it used to be back in like the 90s for software. Right. And I don't think that. I actually think we'll be in more of a subscription economy over the next five years than less of one. Because that's really the only way that these businesses are going to be able to dominate, compete. And once you figure that out, which is such an incentive, right, there's such a high incentive to have a lot of subscription revenue because then you can acquire customers for more money, you can give away profit for free. You can have the higher CPAs that I think more and more and more businesses will really focus on subscription. So if I'm where I'm sitting today and I own a direct to consumer business, what do I focus on? I focus on getting scale as fast as I can, right? I don't think it's this happens tomorrow. I think you have a year at least, maybe two years, possibly longer. But what's the downside, right? Let's also go to this asymmetrical risk component. What's the downside of being wrong here? Well, I mean wrong. I don't think I'm wrong being early. If I'm early by five years or 10 years, it doesn't matter. Okay, cool. I built a giant business, a big brand, and it's extremely profitable because of subscription revenue. And I just clean up, right? If I'm wrong entirely and what happens, I build a giant business, big brand, tons of subscription revenue, and I have less competition forever and more profit. I don't have to lower my pricing at my cpa. Doesn't go up your cost per acquisition, right? Doesn't go up as much as I thought it was. I clean up, I make a ton of money, I'm rich and life is great. So there's really no downside to doing this. You try to get big reach, scale, you focus on subscription. How do I get a really good subscription business where people stick, right? So good products, good customer experience, over deliver, provide more value, surprise them. How do I increase subscription? So I've got one core subscription product, how I bring in other subscriptions or boost the subscription package, right? And how do I build a big brand? How do I make this a brand? Not just a big offer, not just a big funnel, but a big brand that people have loyalty to, going back to, over delivering great experience, authenticity, all of these things. So that even as marketing gets easier, I'm above all of that. There's this little hustle, you know, and Malay down here, I'm positioned up here. I think that's how you have to look at it strategy wise for the next couple of years and I think if you don't do that you are in a lot of trouble. So that's what I wanted to share. I hope you find that valuable. If you do, make sure if you watch this on X, please give me a follow or share this comment, retweet, whatever. You watch this on YouTube, please make sure to, you know, subscribe, comment, like it, whatever. If you watch it somewhere else, I don't know, engage please because I think this is really valuable. Good advice. I think it's super important. I don't know how many people will see this or how important you'll think it is, but to me this is crucial. So what to share and thanks for watching.