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The Power of Direct Mail in E-commerce: An Overlooked Marketing Channel with Drew Sanocki, Founder of PostPilot
Episode 226th September 2023 • The Conversion Show • Erik Christiansen, CEO & Co-Founder of Justuno
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In this episode of "The Conversion Show," Erik Christiansen, CEO of Justuno, interviews Drew Sanocki, Founder of PostPilot. Drew has an extensive background in retail and shares his insights on how direct mail can be a game-changer for e-commerce businesses and explains the features of PostPilot, including segmentation, automation, remarketing, retargeting, and acquisition.

Erik and Drew discuss:

  • The integration capabilities of Post Pilot with platforms like Shopify and Klaviyo.
  • The concept of the discount ladder and the 30, 60, 90 plan.
  • Optimizing retention, basket size, and conversion rates before focusing on customer acquisition. 
  • The key to effective postcard designs is treating direct mail like a Facebook ad.
  •  The shift in mindset regarding direct-to-consumer brands.

Watch the episode on The Conversion Show YouTube channel

Host: Erik Christiansen https://www.linkedin.com/in/erikc/

Guest: Drew Sanocki https://www.linkedin.com/in/sanocki/

Justuno https://www.justuno.com/

PostPilot https://postpilot.com/

Transcript:

Intro 00:00:05

Welcome to the Conversion Show, a podcast that's all about. You guessed it, conversions, everything that gets you to your goal, whether that's purchase, lead capture app, install content downloads, chat engagement, or demo requests. We're talking conversions hosted by Erik Christiansen, CEO and co-founder of the leading conversion optimization platform, Justuno. On the conversion show, Erik sits down with industry-leading marketers, e-commerce growth experts, founders, and entrepreneurs to chat all things conversion marketing. Be sure to follow the conversion show podcast to be notified when a new episode goes live. Like what you hear? Leave us some love with a review. And now here's your host, Eric Christiansen.

Erik 00:00:51

Welcome to the conversion show today. I'm really proud to have my guest, Drew Sanocki, who we go back ten-plus years and I encourage anyone listening if you're in front of a computer and type Drew Sanocki into LinkedIn and you're going to find a background that is is very well, what's the word? Diverse. 

Drew 00:01:17

Long and boring.


Erik 00:01:18

It's well-versed. KarmelLoop retailer he's been a retailer himself he is now CEO of Post Pilot a direct-to-consumer postcards highly segmented which is what we're going to get into today. Very exciting. So let's welcome to the show Drew.


Drew 00:01:37 

Thanks, Eric. It's good to see you again. As you said, we've known each other for ten-plus years. I remember when we took over Karmaloop you know, we got it out of bankruptcy. And one of the first things we did was put Justuno up. And that was probably 2014, 2015, just to reengineer the pop up. And they were amazed at how we went from, I don't know, we probably ten next to the opt-ins in a week back then.


Erik 00:02:02

Drew has always been a big supporter it’s very exciting. You turned that thing back around to 100 million, didn't you?


Drew 00:02:11

It was you know we got it cash flowing again and I think at its peak it was up around 100 million. But you know, for us, the big the big win was just to right the ship and then sell it to a strategic which we did.


Erik 00:02:28

So huge background and retail background and turning companies around Drew for years I was so always so impressed with he has this 30 60 90 day. What do you call it? Can you share with the crowd here 30, 60, 90 because this is always been ...


Drew 00:02:51 

That came from private equity. I think it was like whenever you buy a company or acquire a company, you, the investors, all the board wants the 30, 60, 90 plan. And it's like, you might have a five-year plan for how you're going to grow this thing, but you have to show the team that gave you the capital how you're going to make significant changes in the first 30, 60, 90 days.


Drew 00:03:19 

So everything sort of came from that. I mean it Carmelo up at auto anything we had these sort of well thought out strategic plans. But what the board really wanted and what what I have since learned they pitch their investors on or they have to update their investors on is like what what what are you going to do in the first 30 days?


Drew 00:03:38 

You know, how do you hit the ground running? How do you get this thing cash flowing quickly?


Erik 00:03:43 

It's the low-hanging fruit.


Drew 00:03:44 

Yeah, it's always it forces you to focus on the low-hanging fruit.


Erik 00:03:48

And in today's market, there is still so much low-hanging fruit. And, you know, Drew had that years ago. It was, if I recall, it was the email. So, you know, sending a 30, 60, 90 day email to those segments and you're early on and, you know, segmenting your audience, your own channels with email. And I think what we're going to talk about today is where are we in that today?


Erik 00:04:14 

And when we talk about customer lifetime value and we talk about other low-hanging fruit, Drew has uncovered a great one with Post pilot. And can you share the new way to do postcards and kind of your approach?


Drew 00:04:33 

Yeah it's just Post Pilot started with so we do direct mail for e-commerce businesses our goal is to help more businesses unlock this channel to become more resilient businesses, right to diversify their marketing, to do everything from retention to acquisition through direct mail. I got the idea because I've always used it. So I've been in e-commerce for 20 years and as you mentioned, in turnarounds, we'd acquire a property or we'd take over a property and very quickly have to look for what's the low-hanging fruit.


Drew 00:05:10 

A lot of that was on retention. The brands were doing retention well enough. They weren't re-engaging past buyers. And when you looked at the data, most of those past buyers, there's a very rich audience. For any marketer, we're not subscribed to email. So they had either never subscribed or who had had unsubscribed. So there's really only one way to get a hold of them is direct mail.


Drew 00:05:34 

It's the only way you can get all your customers because the customers don't have to opt in. It was always very hard. The karma loop at auto anything, you know, you'd have to find a printer, you'd have to upload your designs. Attribution was a mess. Know there's a long lead time from when you decide to run the campaign to when you see the results.


Drew 00:05:53 

And I said like, why can't it be as easy, as easy as email? You know, I want it to be like Klaviyo or, or send Lane or Romney send where you just log in and send. So, I built Post Pilot to do that. I actually acquired it from the developer probably in 2018 and we spent about a year on the product turning it into something like Klaviyo for postcards.


Drew 00:06:17 

On the retention side, since then, the platforms evolved, so we've had to then remarketing retargeting and in our acquisition, you can do things like catalogs, you can do things like shared mailers to get the costs down. But it's all within the platform. And I think we timed it really well because in 2020, 2021, Apple comes out with iOS 14.


Drew 00:06:42 

This makes Facebook really hard for a lot of brands. So I think the last ten years made us lazy marketers where you'd throw money at that matter and it would work and all of a sudden it didn't in 2021. So brands started realizing that they had to be marketers again, that they needed to diversify, their revenue channels.


Drew 00:07:03 

And we were there in the Shopify App Store as the leading direct mail app. So it's just been a bit of a rocket ship since then.


Erik 00:07:13 

It's fun. Retention has been a major word with the customer acquisition costs, Facebook, everything. And so we actually, you know, we have been hearing about mailers becoming more popular again. What's new with postcards or catalogs? You know, as you go to post pilot, you're doing segmentation, personalized mailers, what's present, what's new, what's hot?


Drew 00:07:50 

What's new, I think, is the segmentation really it is it and automation. Maybe ten, 20 years ago, direct mail was you know, you you upload a C ISV to a printer and you send the same offer to everybody on that. CSP Well, now you can much, much like email. You can segment your customers based on what they purchased before and recency, frequency, and monetary spend, which is kind of how the catalog industry's always done it, but how recently somebody purchased the number of times they've purchased, the total amount they've spent.


Drew 00:08:30 

And you can just automate these campaigns such that as customers or people fall into the various segments, the system will print and send a card, even if it's one card a week, right? So you can have your abandoned cart campaign cloned into a postcard. You could have a handwritten note go out to VIP customers every time they reach a dollar threshold.


Drew 00:08:55 

You know, the total spend goes to a thousand. I want them to get the handwritten note, and then you can have your retention campaigns go to customers who haven't been around in a while that you want to pull back to buy again. So I think as a marketer, the possibilities are endless. It's all it's all within the app.


Drew 00:09:13 

You just want to be able to segment and target. I think stepping back a little bit, you always want that sort of holy grail of the of the right offer to be in front of the right customer at the right time. And it can be on it should that should be on site and this wasn't a lead in just you know but it should be you know.


Erik 00:09:33 

If someone wasn't paying attention, they would think they were you were talking, explaining the on-site experience of how it should be.


Drew 00:09:40 

Yeah. But it's it's sort of like if I'm in a certain segment, if I am somebody who bought once and hasn't been around for 60 days and I'm due to buy again, you want to give me an offer, You know, it might be a discount. I might be like, Hey, you might also like this to purchase. I should get that same offer when I open my email, when I look at my SMS, when I check the mailbox or when I go on the site, you know, it should just be consistent.


Erik 00:10:05 

Everything you just talked about, you know, you know, recency, frequency, monetization, you know, I laughed when you said, you know, the right offer at the right time to the right customer. Literally, my team, we wrote that down last week, you know, because people want they expect it to speak to them. And it's it's really refreshing to hear you talking about mailers the same way we're talking about the onsite experience here.


Erik 00:10:39 

It just, you know, and it goes into old-school retailing.


Drew 00:10:44 

Yeah, it goes back to really I mean, I learned it from Seth Godin, who wrote Permission Marketing, I don't know what, 25 years ago or something, but he just talks about the best marketing is personal and relevant. And if you increase that relevance, like what's going to increase the relevance, it's a personal offer that's like that's designed with you in mind.


Erik 00:11:06

So as we talk about the personal offering and it being relevant, we're talking about zero and first-party data. How are you as a company working with digital marketers, e-commerce managers to get that data into your system?


Drew 00:11:23

Well, on the retention side, I would say most of the brands have that data. You know, you've got the customer, you know, what he or she bought before and when, you know, in your transactional data, you know, his or her address, right? So it becomes very easy there to segment off of that stuff. You know, a customer bought this.


Drew 00:11:45:21 

They might also like this customer hasn't been around in a while. Let's send her this other offer.


Erik 00:11:51 

And so being in Shopify, that's you're obviously just connecting the app and you're able to access that data.


Drew 00:11:57 

Sure. If you're on Shopify, we could have a native integration. If you're on Klaviyo, we have an integration there. You know, you can pull that data from a number of different sources. So I think direct mail is very similar to email on the retention side, It's different from email on retargeting and on acquisition where it's more akin to Facebook because there you can look at your existing data, and generate a lookalike audience.


Drew 00:12:24 

So a brand new cold audience layer on top of it. Direct mail attributes, household spending has bought from a Walmart before and then you can get very targeted with your prospecting campaigns or your retargeting campaigns.


Erik 00:12:41 

Nate Attribution has been a big subject of conversation and debate this year, especially with SMS marketing. How do you approach attribution with mailers? Is it unique promotions, or unique URLs? How do, how do you communicate that back the ROI in value back to your clients?


Drew 00:13:05 

Yeah, this is something from, you know, you ask any CMO if you add up all the attributed revenue, this is typically like a ... If you add up all the attributed revenue from, you know, email, Facebook, Google, whatever, and it's like 300% of the actual revenue of the business.


Erik 00:13:21 

It's like, you go on LinkedIn and see all these different posts “like we increased case studies, we increased their ROI.”


Drew 00:13:28 

Yeah.


Erik 00:13:28 

So everybody by 130% and they're like tenable.


Drew 00:13:31 

Obviously every service provider out there is going to try to lay claim to as much revenue as they can. And PostPilot is no different, you know, but I would say realistically, as a CMO or CEO, there's an upper and lower bound in direct mail. You see the group that received your marketing campaign and then you see what they did on the site afterward so you can calculate a lift or on the more conservative side, you can measure things like coupon redemption.


Erik 00:14:09 

Control groups.


Drew 00:14:09

Control groups, that's probably the gold standard is like, okay if you know you're somewhere between the customer ROAS and the coupon ROAS, like a holdout group, we’ll tell you exactly the impact of any promotion.


Erik 00:14:24 

We were talking about control groups last week in terms of even looking at pricing differently, how to structure, how do you show the value of your own SAS company to your clients. That's a whole nother subject. But it's important for digital marketers to be able to report back to their team, their bosses, you know, and report to their CMO.


Erik 00:14:45

Hey look, here's some attributable revenue for real. And because we did a control group.


Drew 00:14:52

Right and I think really every service provider probably could do control groups, but they don't because the results won't be as strong as the ROI they claim to produce.


Erik 00:15:09

Different subject. Can I challenge you on something? 


Drew 00:15:14

Yeah, go for it


Erik 00:15:15

Having studied environmental design and being a homeowner now and going to the mailbox and getting all the mailers, I'm going to give you the benefit of the doubt here not only because I see you do some sustainable work with planting trees and using good paper.


Erik 00:15:34 

I'm all about getting less paper used. Now, if you can tell me, we send less because they're more effective because they're highly segmented, I'll help build your case.


Drew 00:15:50 

Okay, That's interesting. From the get-go, we realize that direct mail uses paper. Right. It's and we've had some customers who are sensitive to that. You know, we try to offset it as much as we can. But it's it's the nature of the category. I think that you're printed on paper.


Drew 00:16:14

But to your point, you know, if you did a highly targeted mailing of our catalog alternative, it's called a catalog versus a 90 page catalog or whatever you're going to save paper. So yeah, if you're already using direct mail and using a catalog, we could save you paper.


Erik 00:16:36 

Do you print on rice paper?


Drew 00:16:39 

I don't know. I don't think so. There are some alternatives, like hemp paper. Rice paper, and we have explored some of those.


Erik 00:16:48 

Well, you know, with consumer goods people talk about consumer responsibility. People do shop based off of environmental consciousness, Shopping Gives is another example. People want to shop with brands that support causes. I'm just curious, your approach your company's approach to that it sounds like not doing the big catalogs, it's as minimal as possible.


Drew 00:17:23

Yeah, recyclable paper offset the print jobs we do have and, you know, I would say by nature in our industry of e-comm, there's a lot of trees being cut down, you know, not just for the direct mail portion, but the cardboard for the shipping packaging.


Erik 00:17:51 

Fair enough. Speaking of the postcards and designs, as I'm going through it, the designs themselves and the personalization, what is effective these days?

Transcripts

Intro:

Welcome to the Conversion Show, a podcast that's all about. You guessed it, conversions, everything that gets you to your goal, whether that's purchase, lead capture app, install content downloads, chat engagement, or demo requests. We're talking conversions hosted by Erik Christiansen, CEO and co-founder of the leading conversion optimization platform, Justuno. On the conversion show, Erik sits down with industry-leading marketers, e-commerce growth experts, founders, and entrepreneurs to chat all things conversion marketing. Be sure to follow the conversion show podcast to be notified when a new episode goes live. Like what you hear? Leave us some love with a review. And now here's your host, Eric Christiansen.

Erik:

Welcome to the conversion show today. I'm really proud to have my guest, Drew Sanocki, who we go back ten-plus years and I encourage anyone listening if you're in front of a computer and type Drew Sanocki into LinkedIn and you're going to find a background that is is very well, what's the word? Diverse.

Drew:

Long and boring.

Erik:

It's well-versed. KarmelLoop retailer he's been a retailer himself he is now CEO of Post Pilot a direct-to-consumer postcards highly segmented which is what we're going to get into today. Very exciting. So let's welcome to the show Drew.

Drew:

Thanks, Eric. It's good to see you again. As you said, we've known each other for ten-plus years. I remember when we took over Karmaloop you know, we got it out of bankruptcy. And one of the first things we did was put Justuno up. And that was probably 2014, 2015, just to reengineer the pop up. And they were amazed at how we went from, I don't know, we probably ten next to the opt-ins in a week back then.

Erik:

Drew has always been a big supporter it’s very exciting. You turned that thing back around to 100 million, didn't you?

Drew:

It was you know we got it cash flowing again and I think at its peak it was up around 100 million. But you know, for us, the big the big win was just to right the ship and then sell it to a strategic which we did.

Erik:

So huge background and retail background and turning companies around Drew for years I was so always so impressed with he has this 30 60 90 day. What do you call it? Can you share with the crowd here 30, 60, 90 because this is always been ...

Drew:

That came from private equity. I think it was like whenever you buy a company or acquire a company, you, the investors, all the board wants the 30, 60, 90 plan. And it's like, you might have a five-year plan for how you're going to grow this thing, but you have to show the team that gave you the capital how you're going to make significant changes in the first 30, 60, 90 days.

Drew:

So everything sort of came from that. I mean it Carmelo up at auto anything we had these sort of well thought out strategic plans. But what the board really wanted and what what I have since learned they pitch their investors on or they have to update their investors on is like what what what are you going to do in the first 30 days?

Drew:

You know, how do you hit the ground running? How do you get this thing cash flowing quickly?

Erik:

It's the low-hanging fruit.

Drew:

Yeah, it's always it forces you to focus on the low-hanging fruit.

Erik:

And in today's market, there is still so much low-hanging fruit. And, you know, Drew had that years ago. It was, if I recall, it was the email. So, you know, sending a 30, 60, 90 day email to those segments and you're early on and, you know, segmenting your audience, your own channels with email. And I think what we're going to talk about today is where are we in that today?

Erik:

And when we talk about customer lifetime value and we talk about other low-hanging fruit, Drew has uncovered a great one with Post pilot. And can you share the new way to do postcards and kind of your approach?

Drew:

Yeah it's just Post Pilot started with so we do direct mail for e-commerce businesses our goal is to help more businesses unlock this channel to become more resilient businesses, right to diversify their marketing, to do everything from retention to acquisition through direct mail. I got the idea because I've always used it. So I've been in e-commerce for 20 years and as you mentioned, in turnarounds, we'd acquire a property or we'd take over a property and very quickly have to look for what's the low-hanging fruit.

Drew:

A lot of that was on retention. The brands were doing retention well enough. They weren't re-engaging past buyers. And when you looked at the data, most of those past buyers, there's a very rich audience. For any marketer, we're not subscribed to email. So they had either never subscribed or who had had unsubscribed. So there's really only one way to get a hold of them is direct mail.

Drew:

It's the only way you can get all your customers because the customers don't have to opt in. It was always very hard. The karma loop at auto anything, you know, you'd have to find a printer, you'd have to upload your designs. Attribution was a mess. Know there's a long lead time from when you decide to run the campaign to when you see the results.

Drew:

And I said like, why can't it be as easy, as easy as email? You know, I want it to be like Klaviyo or, or send Lane or Romney send where you just log in and send. So, I built Post Pilot to do that. I actually acquired it from the developer probably in 2018 and we spent about a year on the product turning it into something like Klaviyo for postcards.

Drew:

On the retention side, since then, the platforms evolved, so we've had to then remarketing retargeting and in our acquisition, you can do things like catalogs, you can do things like shared mailers to get the costs down. But it's all within the platform. And I think we timed it really well because in 2020, 2021, Apple comes out with iOS 14.

Drew:

This makes Facebook really hard for a lot of brands. So I think the last ten years made us lazy marketers where you'd throw money at that matter and it would work and all of a sudden it didn't in 2021. So brands started realizing that they had to be marketers again, that they needed to diversify, their revenue channels.

Drew:

And we were there in the Shopify App Store as the leading direct mail app. So it's just been a bit of a rocket ship since then.

Erik:

It's fun. Retention has been a major word with the customer acquisition costs, Facebook, everything. And so we actually, you know, we have been hearing about mailers becoming more popular again. What's new with postcards or catalogs? You know, as you go to post pilot, you're doing segmentation, personalized mailers, what's present, what's new, what's hot?

Drew:

What's new, I think, is the segmentation really it is it and automation. Maybe ten, 20 years ago, direct mail was you know, you you upload a C ISV to a printer and you send the same offer to everybody on that. CSP Well, now you can much, much like email. You can segment your customers based on what they purchased before and recency, frequency, and monetary spend, which is kind of how the catalog industry's always done it, but how recently somebody purchased the number of times they've purchased, the total amount they've spent.

Drew:

And you can just automate these campaigns such that as customers or people fall into the various segments, the system will print and send a card, even if it's one card a week, right? So you can have your abandoned cart campaign cloned into a postcard. You could have a handwritten note go out to VIP customers every time they reach a dollar threshold.

Drew:

You know, the total spend goes to a thousand. I want them to get the handwritten note, and then you can have your retention campaigns go to customers who haven't been around in a while that you want to pull back to buy again. So I think as a marketer, the possibilities are endless. It's all it's all within the app.

Drew:

You just want to be able to segment and target. I think stepping back a little bit, you always want that sort of holy grail of the of the right offer to be in front of the right customer at the right time. And it can be on it should that should be on site and this wasn't a lead in just you know but it should be you know.

Erik:

If someone wasn't paying attention, they would think they were you were talking, explaining the on-site experience of how it should be.

Drew:

Yeah. But it's it's sort of like if I'm in a certain segment, if I am somebody who bought once and hasn't been around for 60 days and I'm due to buy again, you want to give me an offer, You know, it might be a discount. I might be like, Hey, you might also like this to purchase. I should get that same offer when I open my email, when I look at my SMS, when I check the mailbox or when I go on the site, you know, it should just be consistent.

Erik:

Everything you just talked about, you know, you know, recency, frequency, monetization, you know, I laughed when you said, you know, the right offer at the right time to the right customer. Literally, my team, we wrote that down last week, you know, because people want they expect it to speak to them. And it's it's really refreshing to hear you talking about mailers the same way we're talking about the onsite experience here.

Erik:

It just, you know, and it goes into old-school retailing.

Drew:

Yeah, it goes back to really I mean, I learned it from Seth Godin, who wrote Permission Marketing, I don't know what, 25 years ago or something, but he just talks about the best marketing is personal and relevant. And if you increase that relevance, like what's going to increase the relevance, it's a personal offer that's like that's designed with you in mind.

Erik:

So as we talk about the personal offering and it being relevant, we're talking about zero and first-party data. How are you as a company working with digital marketers, e-commerce managers to get that data into your system?

Drew:

Well, on the retention side, I would say most of the brands have that data. You know, you've got the customer, you know, what he or she bought before and when, you know, in your transactional data, you know, his or her address, right? So it becomes very easy there to segment off of that stuff. You know, a customer bought this.

Drew:

They might also like this customer hasn't been around in a while. Let's send her this other offer.

Erik:

And so being in Shopify, that's you're obviously just connecting the app and you're able to access that data.

Drew:

Sure. If you're on Shopify, we could have a native integration. If you're on Klaviyo, we have an integration there. You know, you can pull that data from a number of different sources. So I think direct mail is very similar to email on the retention side, It's different from email on retargeting and on acquisition where it's more akin to Facebook because there you can look at your existing data, and generate a lookalike audience.

Drew:

So a brand new cold audience layer on top of it. Direct mail attributes, household spending has bought from a Walmart before and then you can get very targeted with your prospecting campaigns or your retargeting campaigns.

Erik:

Nate Attribution has been a big subject of conversation and debate this year, especially with SMS marketing. How do you approach attribution with mailers? Is it unique promotions, or unique URLs? How do, how do you communicate that back the ROI in value back to your clients?

Drew:

Yeah, this is something from, you know, you ask any CMO if you add up all the attributed revenue, this is typically like a ... If you add up all the attributed revenue from, you know, email, Facebook, Google, whatever, and it's like 300% of the actual revenue of the business.

Erik:

It's like, you go on LinkedIn and see all these different posts “like we increased case studies, we increased their ROI.”

Drew:

Yeah.

Erik:

So everybody by 130% and they're like tenable.

Drew:

Obviously, every service provider out there is going to try to lay claim to as much revenue as they can. And PostPilot is no different, you know, but I would say realistically, as a CMO or CEO, there's an upper and lower bound in direct mail. You see the group that received your marketing campaign and then you see what they did on the site afterward so you can calculate a lift or on the more conservative side, you can measure things like coupon redemption.

Erik:

Control groups.

Drew:

Control groups, that's probably the gold standard is like, okay if you know you're somewhere between the customer ROAS and the coupon ROAS, like a holdout group, we’ll tell you exactly the impact of any promotion.

Erik:

We were talking about control groups last week in terms of even looking at pricing differently, how to structure, how do you show the value of your own SAS company to your clients. That's a whole nother subject. But it's important for digital marketers to be able to report back to their team, their bosses, you know, and report to their CMO.

Erik:

Hey look, here's some attributable revenue for real. And because we did a control group.

Drew:

Right and I think really every service provider probably could do control groups, but they don't because the results won't be as strong as the ROI they claim to produce.

Erik:

Different subject. Can I challenge you on something?

Drew:

Yeah, go for it

Erik:

Having studied environmental design and being a homeowner now and going to the mailbox and getting all the mailers, I'm going to give you the benefit of the doubt here not only because I see you do some sustainable work with planting trees and using good paper.

Erik:

I'm all about getting less paper used. Now, if you can tell me, we send less because they're more effective because they're highly segmented, I'll help build your case.

Drew:

Okay, That's interesting. From the get-go, we realize that direct mail uses paper. Right. It's and we've had some customers who are sensitive to that. You know, we try to offset it as much as we can. But it's it's the nature of the category. I think that you're printed on paper.

Drew:

But to your point, you know, if you did a highly targeted mailing of our catalog alternative, it's called a catalog versus a 90 page catalog or whatever you're going to save paper. So yeah, if you're already using direct mail and using a catalog, we could save you paper.

Erik:

Do you print on rice paper?

Drew:

I don't know. I don't think so. There are some alternatives, like hemp paper. Rice paper, and we have explored some of those.

Erik:

Well, you know, with consumer goods people talk about consumer responsibility. People do shop based off of environmental consciousness, Shopping Gives is another example. People want to shop with brands that support causes. I'm just curious, your approach your company's approach to that it sounds like not doing the big catalogs, it's as minimal as possible.

Drew:

Yeah, recyclable paper offset the print jobs we do have and, you know, I would say by nature in our industry of e-comm, there's a lot of trees being cut down, you know, not just for the direct mail portion, but the cardboard for the shipping packaging.

Erik:

Fair enough. Speaking of the postcards and designs, as I'm going through it, the designs themselves and the personalization, what is effective these days? They almost look like pop up designs, the ones I've seen on your site. How do you approach the actual effectiveness and cards that are going out? Has anything changed? Are you experimenting with anything unique?

Drew:

Yeah. You can certainly A/B test creative and a lot of our customers do that. But I would say it's a visual medium so we tell our customers like, Hey, think of it as a Facebook ad, right? You need a strong call to action and a good offer. It's probably not the place where you just want to do some thought experiments or a card with branding where you can't even understand who sent it. Leave that for more like on-site stuff. I would show the product and a strong call-to-action, coupon code really helps assess attribution and encourage you know encourages the recipient to act.

Erik:

I’m on your academy and going it through here, digital marketers are trying to learn, you know if they're going to invest resources and time which no one has, they're going to look for a sign that it’s automation, I just need a needle to turn this campaign on. Let's talk about that automation component because we're doing a lot of work with that, too, and digital marketers that are too busy. What's the number one thing that when you work with new clients, do they have aha moments of like, Why don't we do this months ago, years ago? Or are they coming from a different direct mail background?

Drew:

If they're coming from direct mail, I think they're sort of shellshocked a bit because that industry is very old school. They're used to a direct mail agency saying, okay, now we've got to requisition the paper, and now we're going to find a printer for you, and it's just paralyzing. You get these invoices that are a mile long with here's for the postage and for the paper and for the printing.

Drew:

So I think the first eye-opening moment is when they realize it's one cost for everything included, right? That the per card cost means like for the print, the postage, the sent, like the whole package, which if you're coming from digital marketing, you're thinking like, of course, that's what I'm used to, I'm used to SAS, but if you're coming from direct mail, that in and of itself is different.

Drew:

And the other thing is we do it all, we essentially have a direct mail agency inside the business that does campaign setup deployment. We can get you set up with a strategy and execute on that strategy often in like seven days. So you sign up today, in seven days, you could have everything ready to go to your customers.

Drew:

We've really tried to take all the thinking out of it, do all the work because CMO's are busy. They don't want to have to figure out a new channel, so we'll help them do it.

Erik:

To me, I know very little about this market and so it's really interesting to hear. I remember when we were doing the Sierra Snowboard, I was so amazed and shocked that the post office has their own sales team and marketing team to help businesses get into direct marketing mail because it supports the post office.

Drew:

Yeah, the average amount of mail carried by a mail carrier has been going down for something like 15 years. So that team at the post office, the more they can drive to direct mail, the better for them.

Erik:

So getting back to segmentation, that's what really got us into this conversation. Building audiences and segments, does the 30, 60, 90 plan still apply to the direct mail world?

Drew:

So when you say 30, 60, 90 you mean for the customers?

Erik:

Yeah.

Drew:

So it's just a rule of thumb and what you're talking about there we call it intra-purchase latency, which is like the time between purchases and it's different for every business. If you buy a BMW, it's ten years. If you buy toilet paper, it might be 30 days. I would say on average for e-commerce in apparel I like looking at that 30-day mark as when most customers typically come back and buy again. And the general theory is that or what the data suggests is if you are selling a consumable, if you're selling a product where the customer comes back after 30 days if they're going to rebuy, they've come back within 30 days.

Drew:

That tells me as a marketer for the time between now, in that 30-day mark, my customer is still likely to come back. So what do I want to do? I want to show her more things to buy at full margin, Right? It's only after those 30 days that customer becomes less and less likely to ever come back.

Drew:

And so that's probably when I want to start discounting and promoting more to try to bring her back because she's not she's gone at the 60-day mark, at the 90-day mark. If she still hasn't come back, she's gone. I call them rungs on a ladder. You want to build out a discount ladder as the customer gets farther and farther away from his or her most recent purchase, You can, as a marketer, give away more margin to try to bring her back because you're syncing up the promotion with the customer's propensity to buy.

Drew:

Right? So it's different for every business. You know, one thing we built into the app, if you add the Post Pilot app to your Shopify stores, you'll get that report that shows you what your specific customers look like.

Erik:

Oh, tell me about that. By the way, your discount ladder. I remember that it totally brought back memories.

Drew:

Was it fond memories?

Erik:

No, but it just, you know, if anyone is listening right now, Drew's talking about it's just simply understanding your customers.

Drew:

Oh, yeah. And can I screen share on this podcast?

Erik:

If anyone watching on YouTube, we will do a screen share. You can see us and we can drop a link to the video.

Drew:

Okay. So what I'm showing you is one of the reports you get when you add the app Post Pilot to your Shopify. It's the time between purchases report or inter-purchase latency report. And for this brand, it's bucketing your customers in these recency buckets. So the first one is 0 to 29 days. This is like the first 30 days after purchase you've got 44% of your customers have come back to buy again by day 60 after their first purchase, you're up to 64%. By day 90, you're up to 77%. That makes sense?

Erik:

These are cumulative percent of repeat orders.

Drew:

Yes, between the first and second order. So the question when when you go to do retention as a marketer, you're going to say like, what do my typical customers do if they're going to reorder? 77% for this brand have come back and re-ordered by day 90 in the first three months. So what that tells me as a marketer is, okay, up until day 90, my customers still likely to come back and buy again.

Drew:

I want to show her more things to buy at full margin, right? I don't want to give away promotional dollars before day 90 because she's going to come back and buy. It's only after day 90 that that customer becomes less and less likely to ever buy from my brand. That's when I can afford to give away margin in the form of promotions to bring her back.

Drew:

So we use this data to set up retention campaigns in post pilot. You know, you might start with a post-purchase campaign up here at 830 or day 60 that just shows more things to buy if they bought the bed then I want to sell the bedding.If they bought this supplement, I want to sell more of that supplement.

Drew:

It's only after day 90 that I want to start my discount letter. I want to start giving away 10%, 20%, 30% as time goes on to bring that customer back.

Erik:

My mind is just teaming with, you know, mirroring your off-site experience, their on-site experience. You mentioned product recommendations. That's a powerful engine, how great it would be if you could take that same product recommendation that's on the site, take it, and put an on…

Drew:

Oh yeah.

Erik:

We're definitely going to have to talk integrations deeper.

Drew:

Yeah. That's when it gets really cool. You know, and it's like how long until AI does all this stuff for you across every channel? I don't know, but.

Erik:

We were at Google Next last week, it was kind of interesting. The next couple of years should be interesting. I thought everyone was using it as a buzzword and saying they do it but practical applications in the consumer goods will be coming out a lot of it's kind of behind-the-scenes automation that's going on right now.

Erik:

There are very few consumer products there, that’s going to be exciting. So, as we look at time here, you know, It's a reinforcement of talking about your customers, who they are, where they are, and what they want to see. As Klayvio is doing a big push to try to become the central hub of customer data.

Erik:

That's been their big push. And you had Dassity in different data hubs like that. Shopify has great access to their data. Google's relaunching their analytics. Where do you look? Are you looking at any of those platforms you mentioned you integrate with Klaviyo to really understand the customer, do you have any tools that you recommend to clients?

Drew:

A lot of our brands like doing their CRM segmentation work and stuff in Klaviyo or in Shopify. And so we built the app to sort of be native to both, in other words, if you want to run your CRM through Klaviyo, you can do that and just drag postcards in as a trigger, as part of a flow.

Drew:

We're, we're not trying to be that CRM despite the reporting because I think there's plenty and it’s a very crowded space and there are a lot of big players. I think we just want to work as a trigger that kind of talks to whatever you are using as your CRM.

Erik:

I can't wait to see your dashboard more because it's all about being the best in breed in your niche and in educating them. That's the first time I've seen your discount ladder actually visually represented in a dashboard. So that's super exciting.

Drew:

It's great, I love that report. I've always used it surprised that more apps don't build it in you know I haven't worked with Triplewhale much or Lifetimely only those are others that I think might do it. But I don't have enough experience with either app.

Erik:

Well I think where we are today in talking about zero party data, it's one of the things where great, we have all this data and there's all this out there, but it gets back to the low hanging fruit and your original 30, 60, 90 that private equity looks like, how do you make an impact to your business today And you don't need tons of data, you just need the right tools and the right strategies. And I'm going to say you're changing my viewpoint on how to approach direct mail.

Drew:

I would step back and I would look at what we've done when we've bought companies, it's all about the 80/20 and the low-hanging fruit. Karmaloop had an email list of like 5 million and they sent the same offer to everybody every day, so just by segmenting and targeting your customers a little bit better, I would start with retention with just a simple post-purchase win-back, or second purchase campaign gets you another ten, 20% on really the top and bottom line. So with all these brands, that to me is the 80/20. Get your retention squared away first before you start trying to overhaul your acquisition program because it's expensive there.

Erik:

I often say you have this nucleus of your current customer base, grow it, expand it out slowly from your core customer base instead of thinking you can just build this gigantic base all of a sudden invest in that core, understand the customer, and then grows. It grows more sustainably.

Drew:

Sure. Yeah. I mean, the more you get your sort of flywheel cranking… Another thing I talk about a lot is there are three multipliers, right? There are three ways to grow revenue for any retail business. It's acquiring new customers. It's keep them buying longer. And then it's increasing AOV, the average basket size.

Drew:

Yeah. And everybody goes right to acquiring more customers. But the problem there is it's like the most expensive thing out of all those If you focus instead on optimizing your basket size, your cross-sells and your upsells. And then on the retention side with getting people to buy more often and buy more frequently when you do go and focus on acquisition you're going to get a better ROI than you would before because you've already optimized the engine.

Erik:

I was like, You're talking about conversion optimization.

Drew:

Yeah, that's part of it. You know, I would put that under acquisition because really like you fix conversion rate optimization, you're going to acquire more customers and it's a hell of a lot cheaper than going and working on your acquisition funnels.

Erik:

So in the last few minutes we here, because as you can hear Drew talk about retail, his depth of understanding, outside of post pilot, is there anything you're seeing that you're like, oh that's cool or exciting? You seen what's happening in the market presently?

Drew:

We have a lot of CPG brands. I would say we've got 8000 brands on the platform, but CPG is a big segment and most of them have… I hate to say omnichannel because it's overused, but just like taking this omnichannel approach, like they're using their Shopify data to generate look alikes and drive people to purchase at a Whole Foods right?

Drew:

So they've realized that you've got access to first-party data through your website and it doesn't have to live in a silo, you can use it to drive people to your wholesale partners. Right? People are using direct mail to do that through post pilot. We call it a shop drop, that's like exciting. It's interesting to just see how everybody used to think, we're just going to go it alone as a DTC brand. But, I think there's been this realization over the last few years that DTC is just a sales channel, right? And we've got to optimize the entire business, not just go it alone as a DTC brand.

Erik:

Well, what I like about that it really goes back to traditional retail where brands used to design the product and market the product, and they left retailing to all the retailers and their marketing was to drive consumers to the stores to buy. And so it really is reinforcing and kind of going full loop to old school days, part of the DTC was like we can own the whole thing and have higher margins. But now it sounds like this shift is more of no, no, no, we understand we can't do this alone. Let's let's see if we can't leverage our distribution network further.

Drew:

Yeah, I see a lot of brands that are killing it. In particular, there's that category of these old-school manufacturers that would produce an interesting proprietary product, and they never had contact with the customer. They always sold it through Amazon or Walmart or something. And then they realize now that they can set up their own Shopify store and go direct with it and get much better margins. There's a cultural challenge there because they've built an entire business around one channel and in many ways, it's a threat to that channel. But the brands that are able to overcome that do really well online.

Erik:

It's been interesting. You know, a lot of DTC is going to brick and mortar now, you know, like Rad Power Bike being one. They're now having to learn brick and mortar whereas the other brick mortars are having a learning curve of learning online retail, which is completely different, a different skill set, That's a whole nother conversation.

Erik:

I know you have to get going as well but for anyone listening, you can go to a post pilot and hop in, get a kicking the tires for your account right now. Yeah.

Drew:

Shoot us an email. You know that's probably the best way I drew@postpilot.com.

Erik:

There it.

Erik:

I didn't even plan on going so deep into post pilot because Drew and I have so much background we can talk about, but I'm actually really excited to see what you're doing here. I think it's great.

Drew:

I love it, you know, having run brands, and now it's a software company, right? I still call it that. Even though we have printers, it's really different and fun and I get to see a lot of different brands and kind of what's working so it's so I've enjoyed that part of it and really running a business is running a business, you know, and it's it's kind of fun, whether it's DTC or software.

Erik:

Well, if Drew's behind it, you're in good hands. So with that, that's all I'm going to leave it at.

Drew:

Thanks, man. This was a lot of fun. You know, I got to come up to the Bay Area. We should grab a beer sometime.

Erik:

We're here. All right, Drew, we’ll sign off for today. Thank you, everyone, for listening, and thank our guest Drew.

Drew:

Thanks, Eric.

Erik:

All right. Take care.

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