The DTC Podcast

How do you get your CFO to approve a bigger marketing budget for a DTC brand? Drew Fallon, former CFO of Mad Rabbit, says finance is watching one number, CAC, and that brand spend only gets funded once direct response is efficient enough to pay for it.

Drew is now CEO of Iris Finance, a finance platform for CPG and DTC brands, where he sees the books of 200 brands, most of them between $20 million and $300 million in revenue. He joins Eric Dyck and Claudia Lauture, VP of Client Services at Keen Decision Systems, to work through the argument between marketing and finance, including who should own the budget and when a brand can afford upper funnel. You walk away knowing what to bring into the budget meeting and how finance will score it.

Get the DTC Newsletter: https://directtoconsumer.co

WHAT YOU WILL SOLVE
You don't know what finance is judging your plan on. Drew's answer is CAC. If CAC, retention and LTV to CAC land where his model has them, he says he does not care how much you spend or what you spend it on.
You need money for a bet that won't pay back this quarter. Drew wants one of two cases made: that it raises MER and contribution margin, or that the upside is big enough to be worth the risk.
You want to start brand marketing and direct response is only just carrying the business. Drew says there is no room yet. Most companies he sees don't start brand work until somewhere past $30 million in revenue, and he would not do it at $10 million.
You think you have topped out on Meta. Drew says Meta takes a brand farther than most operators expect, and that you can probably ride it to $100 million.
You are looking for the next channel after Meta. Across the 200 brands on Iris, Drew has not seen one scale AppLovin spend and make more money. The pattern he describes is a brand that reaches $50 million on Meta, puts $200K a month into AppLovin and watches its margin go away.
Your upper funnel keeps getting cut to hit the quarter. Claudia's team at Keen runs both plans out two and three years, so the cost of the cut is on the table next to the short-term number.
Your cash position keeps surprising you. Drew builds a bear, a base and a bull case, then tests the base at 40% over and 40% under. Beating plan by 60% can still run a brand out of money, because of inventory.
Nobody agrees who owns the marketing budget. Drew says it is usually the marketing lead and should be the CFO, on the condition that the CFO understands growth marketing, which he calls rare.
Your agency bill is being questioned. At Mad Rabbit, Drew let go of an Amazon agency he liked because it cost roughly $60K a month and he could hire two full-time people for two thirds of that.
You are planning Q4 the way you did last year. Drew is hearing more brands pull back on TikTok after losing money there last year, and supplement founders tell him they are waiting for January because Q4 brings higher returns, more churn and discount shoppers.
You are reporting platform revenue to finance. Both guests named it as the number they stopped trusting. Drew: "It's all higher than what you get on your P&L."

ABOUT THE GUESTS
Drew Fallon is co-founder and CEO of Iris Finance and the former CFO of Mad Rabbit. https://irisfinance.co
Claudia Lauture is VP of Client Services at Keen Decision Systems, the marketing mix modeling, planning and forecasting platform. https://keends.com

HARNESS THE HALO
Harness the Halo is a six-part series from DTC and Keen about the spend that doesn't pay you back the same day, and the measurement that gives you room to make it. This is episode 5 of 6, and a new episode drops every other week.

SPONSOR
Harness the Halo is presented by Keen Decision Systems. Keen measures the incremental impact of every channel on sales, revenue and profit, and forecasts how a channel will perform before you spend in it. https://keends.com

When should a DTC brand move into retail? Flex founder Lauren Schulte Wang said no to Target twice, and retail is now over 60% of revenue. She waited until her supply chain and her marketing engine could handle it, and she went because customers told her every month that they wanted to buy the product in a store.

On the DTC Podcast, Lauren tells Eric Dyck how Flex got from a landing page with 200,000 emails and no product to 30,000 retail doors and more than 185 million menstrual discs sold. She covers the DTC strategy behind the timing of the retail move, how connected TV and subway ads lift every other channel, and what she is doing about a category that only 3% of people have heard of.

Get the DTC Newsletter: https://directtoconsumer.co

WHAT YOU WILL SOLVE
A big retailer wants your product and you are not sure you are ready. Lauren turned Target down two years running until supply chain, manufacturing and margin-based LTV to CAC were dialed in, because a marketing engine that cannot scale before retail will not scale once you are on shelf.
Your subscription keeps missing the moment customers need the product. Flex changed pack sizes, changed frequencies and opened fulfillment centers on both coasts. The fix was in the customer research the whole time: people wanted to buy it in a store.
Your product needs explaining before anyone will buy it. Flex ads without an education piece perform worse, so the answers to "will it get stuck" and "is it messy" go inside the ad itself.
You are about to spend real money on your first TV campaign. Flex hired a big agency, shot a high-production spot Lauren had doubts about, and had to spend out a contract on ads that did not perform. The rule since then is that nothing runs on TV unless it has already worked on YouTube.
Your category has almost no awareness and you cannot outspend the giants. With unaided awareness of menstrual discs at 3%, Flex added CTV, New York subway ads and campus marketing so that a friend's recommendation, a subway poster and a TikTok from a small creator all reach the same person.
You do not know which content will move retail sales. A plain YouTube video explaining how the Flex Cup's pull tab works went viral and lifted Flex's velocities at Walmart by double digits.
You launched to a huge waitlist with no way to fulfill it. Flex could not ship in the US yet, so the founders flew to Europe on cheap Iceland fares and hand-packed discs at local post offices. They had $80,000 in pre-orders before demo day.
You found a competitor's patent on the product you wanted to make. Lauren pitched the company, got turned down, designed around the patent, and then acquired that company while she was still in Y Combinator.

ABOUT LAUREN
Lauren Schulte Wang is the founder and CEO of The Flex Company, the period care brand behind the Flex Disc, the Flex Cup, Softdisc and Softcup. She started Flex in 2015, went through Y Combinator in 2016, and coined the term "menstrual disc." Flex products are sold in 30,000 stores including Walmart, Target and CVS. https://flexfits.com
Instagram and TikTok: @flex

STAY CONNECTED
DTC Newsletter, daily ecommerce marketing and ecommerce growth tactics: https://directtoconsumer.co
YouTube: https://youtube.com/@dtcnewsletter
LinkedIn: https://linkedin.com/company/directtoconsumer

TIMESTAMPS
00:00 How Flex turned viral attention into growth
08:00 Why doing things that don’t scale works
12:00 How retail became Flex’s biggest growth channel
17:00 Why product education drives performance
32:00 What makes TV and YouTube creative work

How can AI agents speed up ad creative for a DTC brand? Braydon, a creative strategist at Pilothouse, has agents build his swipe file every Monday and Claude write his design tickets, which saved him five and a half hours last week.

Braydon joins Eric Dyck on All Killer No Filler to walk through the full workflow. Grok Bot handles the research with a chief of staff agent that manages a team of sub-agents. Higgsfield turns the references he picks into on-brand mockups. Claude writes the tickets for the designers, who still make the finished ad. He also explains why he is not bullish on AI-generated ad creative right now, and why some of his clients have asked for zero AI in their ads.

Get the DTC Newsletter: https://directtoconsumer.co

WHAT YOU WILL SOLVE
You trigger every AI task by hand. Braydon sets up a chief of staff agent in Grok Bot that manages sub-agents on a schedule, so the research is waiting for him on Monday morning.
Competitor and creative research eats your week. His agents go through Pinterest, the ad library and Motion, and one run came back with a swipe file of around 70 creatives relevant to the brand.
You write the same design tickets over and over. Braydon loads his internal processes into Claude, hands it the ideas he picked, and it writes the ticket descriptions for the designers.
You can't tell where AI belongs in the creative process. He uses it for strategy, references and mockups, then gives the work to designers for the finished product.
Your AI images look like AI. Braydon starts from a reference photo taken on a phone or a real UGC image, which gets the output closer to an iPhone shot.
Your client has banned AI creative. Eric shares what he heard from larger brands, who test AI creative on a separate third-party brand page instead of the main account.
You copied an AI ad trend and it stopped working. Braydon on Pixar-style video ads and why formats like that grab attention for a moment and then fade once everyone runs them.
Your team keeps building the same AI tool three times. Braydon and Eric talk through shared context, token bills and what Pilothouse is building internally to fix it.

ABOUT BRAYDON
Braydon is a creative strategist at Pilothouse, the performance marketing team behind DTC. To talk through this workflow with him, fill out the form at https://pilothouse.co and ask for Braydon.

STAY CONNECTED
DTC Newsletter, daily ecommerce marketing and ecommerce growth tactics: https://directtoconsumer.co
YouTube: https://youtube.com/@dtcnewsletter
LinkedIn: https://linkedin.com/company/directtoconsumer

TIMESTAMPS
00:00 How AI workflows save hours every week
05:00 Building an AI agent team
08:00 Where AI creative works best
16:00 Using AI as a personal assistant
22:00 Building shared AI workflows for teams

Brand strategist Eugene Healey on DTC marketing at high creative volume: why creative is the new targeting, why brand books fail with creators, and how teams approve hundreds of ads a week.

How do you keep a DTC brand coherent when you're shipping that much creative? Eugene says the fundamentals of brand still hold. The job around them has moved from controlling every campaign to orchestrating hundreds of pieces of creative the brand no longer controls.

Eugene lectured in marketing and brand management at the University of Melbourne, runs a brand strategy studio, and is an equity partner in the brand tracking platform Tracksuit. On his second DTC Podcast appearance he tells Eric Dyck where brand strategy goes when media becomes the key variable, and how a team builds the judgment to approve work at volume.

Eugene's live cohort course, The New Fundamentals of Brand, starts October 12. It runs seven weeks, with live sessions, studio groups of five or six people in your time zone, and interviews with brand leaders from Hinge and Nothing. Final-release seats are limited: https://thenewfundamentals.co

Get the DTC Newsletter: https://directtoconsumer.co

WHAT YOU WILL SOLVE
Your team ships more creative than any approval chain can review. Eugene's model has senior people approve the overall pattern while juniors and mid-levels own the day-to-day sign-off.
Your brand book can't govern creators, partners and communities. Why you hand third parties a suite of assets that can travel into their context, instead of 80 pages of logo rules.
Your team still works strategy, then creative, then media. Creative has to be conceived inside its distribution, which is why on Meta the creative has become the targeting.
All of your brand knowledge lives in one long-tenured person. How to spread that judgment across the team by debating why a piece does or doesn't feel right.
AI is producing work nobody on the team has read. Tobi Lütke's "slop grenades," and why saving money on copy makes little sense when media costs more than it ever has.
Your brand keeps trying to make memes. What Gap and the studio Invisible Dynamics did instead, bringing back music video culture with dance covers people remix on their own.
Your positioning sits in the aspirational middle. What Everlane's sale to Shein says about brands whose promise is that tomorrow can be a little better than today.

ABOUT EUGENE
Eugene Healey is a brand strategist and co-founder of The New Fundamentals of Brand, a seven-week live course for marketers and brand leaders. He previously lectured in marketing and brand management at the University of Melbourne and is an equity partner in Tracksuit. https://thenewfundamentals.co
Instagram: https://www.instagram.com/eugbrandstrat

00:00 Cold open: the funnel is now a tornado
00:22 Two years of making content, and what changed
01:51 Why he turned it into a course
03:50 The central thesis: from control to orchestration
04:50 Salience in the Andromeda era
05:39 Creative is the new targeting
06:56 Walter Cronkite and the creator model of trust
08:51 Everlane, Shein and the death of the middle
12:16 What happened to the analog revival
15:23 Private social and the entertainment platforms
17:26 Creative velocity and who approves the work
19:39 Slop grenades and human discernment
22:56 Can AI hold the brand's judgment?
25:06 Hiring top screenwriters for UGC scripts
25:45 Stop making memes and become the meme: Gap
29:08 Tracksuit, queryable brand tracking and Hall
30:17 Sydney Sweeney and why we let ourselves get rage baited
34:54 Inside The New Fundamentals of Brand
38:02 Seats, and where to sign up
38:30 Wrap

How do you run Black Friday when your DTC brand is already hooked on discounts? Split your customers into new and repeat, keep the coupon-trained cohorts on their deal, and use the Black Friday offer to bring in new customers who have never seen your 30% off.

On the second DTC Rundown, Eric Dyck is joined by Jordan Gordon, who leads email and retention at Pilothouse, and Rafael Gi, who works on partnerships and client strategy there. Each topic runs on a timer. They start with a brand that has run 30% off sitewide five times this year, move to why Meta keeps spending in the markets you have already saturated, and finish with the worst things Pilothouse finds when it audits a brand's email program.

Get an audit from Pilothouse: https://pilothouse.co

WHAT YOU WILL SOLVE
Your customers only buy when there is a coupon. Jordan separates the coupon-addicted cohorts, keeps showing them their price through email, and controls the offers new customers see so they settle on a new normal.
Your Black Friday offer is the same one you ran all year. Push it to 35%, or lead with an "up to" offer on a door buster that is not your most important product.
You treat your discount as a flat rate. Rafael budgets discounts like media spend, with a goal for each offer, such as a one-day drop on your best seller to capture new customer emails.
You give away margin in Q4 and get nothing back in January. Set an AOV threshold that earns a gift card customers can only redeem in Q5.
Your early access list waits weeks for the deal. Give them the Black Friday offer the day they sign up, then use the flow to sell them on buying from you all year.
Meta keeps spending where you are already strongest. In one Pilothouse audit of a nine-figure brand, two regions near where the company was founded held 8% of its addressable market, produced 40% of its revenue, and were being over-delivered by 20 to 30%.
Every region carries the same ROAS target. Set targets by market maturity instead: higher efficiency in saturated markets, break even or a small loss in new ones, and something in between for markets that are emerging.
Your email program is turned up to maximum. Jordan found one brand with 700 live flow messages sending up to four campaigns a day, and another using 30-day open attribution that credited email for sales driven by ads.
You do not know what email earns on its own. A control group that only receives the first welcome email shows you the incremental revenue.
Your SMS budget looks expensive. At one brand, email click-through sat at 0.09% while SMS reached 2.5%, and an SMS click cost 25 cents against roughly $1.30 for Meta and Google retargeting.
The algorithm narrowed your brand to one message. How a testosterone supplement ended up with a site built around libido, and why the fix meant rebuilding creative, site and email together.
Your pricing sits behind a quiz. At one subscription brand, only 3% of people who went through the quiz checked out.

ABOUT THE GUESTS
Jordan Gordon leads email and retention at Pilothouse and hosts The World's Best Email and Retention Podcast. https://podcasts.apple.com/us/podcast/the-worlds-best-email-and-retention-podcast/id1772940578

Rafael Gi works on partnerships and client strategy at Pilothouse, a performance marketing agency. https://pilothouse.co

STAY CONNECTED
DTC Newsletter, daily ecommerce marketing and ecommerce growth tactics: https://directtoconsumer.co
YouTube: https://youtube.com/@dtcnewsletter
LinkedIn: https://linkedin.com/company/directtoconsumer
Want to be on the Rundown? Email eric@directtoconsumer.co

00:26 Raf's hamstring and Jordan's white belts
04:49 Budget your discounts like media spend
07:15 Do bundles and gifts with purchase fix it
16:06 How a market matures
27:16 The supplement the algorithm turned into a libido brand
33:08 The subject line typo the investors saw
34:20 Budweiser Red Light and the Bud Light UFC promo
37:36 The $10,000 retreat ticket paid in Bitcoin