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When to Diversify or Evolve Your Media Mix: How To Approach Channel Expansion (Bonus Episode)
01:27:53
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- [00:01]
A
All right, boys are back. Excited to be here. You guys are back from Beanstalk, which I wanted to, I wanted to ask you about. I was getting FOMO seeing Cody hanging out with Gary Vaynerchuk. Gary was like I've, I've. Since my, like I feel like I've, I've grown past Gary and his like all you need is empathy to, to win in business. But you know, Gary was one of the OG guys I was, I was you know, starting to pay attention to when, when I was getting into Internet marketing in college. What was, what's Gary like in person?
- [00:29]
B
Cody, my fortunately known. Pretty lot of people I went to high school with actually have worked for him for, for years and he's just been a. You know, him and Bobby are friends so he's, he's, he's been nice enough to give us some time and, and kind of some, some advice when we've wanted. So it's, it's been cool. So yeah, he's, he's, he's really nice. He's only been like, he's just exactly how he is always. But he's, he's, he's very like very nice, very helping with the time he has and very genuine.
- [00:56]
A
Has. Has Jones road worked with VaynerMedia?
- [00:59]
B
They've helped out with some recruiting. We've definitely gotten, you know, people from there that like, they, they do a really good job of helping alumni land jobs. So that's been really helpful. And then I know Gary has just given like advice and strategy.
- [01:11]
A
Nice. Very cool. And the other thing that stuck out to me that I remember seeing was the like speed dating. I don't know if they, it was like some sort of like it's like 10 minute one on one meetings and it's like speed dating style and then you move on to the next one. Were you guys part of the, the business speed meet dating thing? How is that?
- [01:30]
B
If you were I, Connor probably did a better job than me at, at say no. I thought you had to say yes to everything. But it was, it was quite, I think that the cool thing like outside of hanging out with everybody was like there were multiple people that like, you know, I had business with. Like that was like, it was just good to like get in front of them and see them in person and like handle a bunch of things at once. So it was actually very productive in that regard. Like multiple vendors or agencies that were like in the middle of doing something with that was cool. It was cool to learn about some new stuff. But I want you to know like you shouldn't have any FOMO because I think I call I saw Connor McDonald for like 10 minutes. We barely saw each other. So I just want you to know no, no FOMO for you needed.
- [02:06]
A
Fair enough. So. So Connor, what were you up to at Beanstalk then?
- [02:10]
C
Well, I'll say quickly. It's really interesting from a programming perspective because they call it a conference, but there was like there was one keynote speaker Tuesday morning and then it was.
- [02:20]
D
All what really the what the whole.
- [02:23]
C
Conference was centered around was trying to get like smaller discussion groups set up. So they had some people had like 14 of these little one on ones. They had table talks around lunch where you got paired off into like groups of 10 or 12. I did a boardroom discussion is what they were called with the CEO of Mack Weldon and then this, this guy from private equity, Anthony moderated. So that was kind of cool. That was sponsored by North Beam. So we had like there's 20 people there and that's basically how the entire thing formatted so totally like anti big one to many keynote speakers and way more like more intimate groups.
- [02:58]
A
And it's not just Ecom. Or is it just Ecom?
- [03:01]
C
It was essentially all Ecom.
- [03:02]
A
All eom.
- [03:03]
B
Yeah, all like commerce. So probably something like not dsc, but yeah.
- [03:05]
A
Got it, got it. Sweet. Well, welcome back to your to your respective hometowns. But we got a good episode today. Before we get into it, thank you to the sponsors, Motion Rich panel after Cell Prescient and Revo Sam. On October 9th, Motion is hosting the fourth annual Creative Strategy Summit. The virtual event is free to attend and it is where the best performance creative teams on the planet share what's working. Seriously, I have attended this the last few years and I am really blown away at the reputation and the people that Motion is bringing on and just the quality of the content that these amazing creative strategists are talking about at this event. And we're really going to learn what's working, how they're evolving their creative strategy and the overall bigger shifts in the world of DTC and creative. It's over six hours of programming featuring elite DTC brands and a must attend event for anyone working in paid social. I'm going to be there. Cody and Connor are going to be there. Plus the marketing operators are doing a live podcast episode. So we're really excited about that. There was over 18,000 people registered last year, 5,000 people tuned in live and many, many performance creative teams block out this day and just make this a learning moment. For the entire company and it's been really, really critical and important for guiding our creative strategy. I remember the last few years we've had a lot of a lot of information from the event get infused into our creative strategy in the following few months. Like I said, some of the best, sharpest creative strategy minds in DTC are presenting at the Creative Strategy Summit being put on by Motion. I'm really excited about this list of people. It includes Dara Dunny, Sarah Levenger, Mirella Crespi, Lee Joe Zelowitz, Savannah Sanchez and a lot more to be announced soon. Seriously, some of the best minds and creative strategy right now. Plus if you cannot attend all the recordings are going to be recorded so you should sign up anyway even if you're not able to attend when the recordings are live real time. So get your free ticket@motionapp.com Creative Strategy Summit. It's happening on October 9th at 12:00pm to 6:00pm Eastern Time. Make sure not to miss it. All right, let's get into it. So we are, we have a special guest coming on later. I won't spill the tea on that quite yet, but we are going to spend today talking about retention and mainly about a specific retention tactic that I know at hexcloud we love to use very strategically and it seems to be coming a bigger part of e commerce brand stack. You know there's been this like this, I don't know like direct mail is kind of come all the way back around where it's not, I don't know if it's like the leading retention or acquisition channel for many brands but it is a very effective and I think it's becoming more prominent in a lot of e commerce brands marketing stack. So that's what we're chatting about today. So I guess we'll start it off with just a broad question. Connor, I'll kick it to you first. Like how do you think about multi channel approach to retention? And you know we have email, sms, paid media, direct mail. There's a lot of different organic social I think for us is a big retention opportunity. Like there's a lot of ways to, to reactivate and re engage with previous buyers and and drive you know that second, third and fourth order. So yeah, how are you guys thinking about like the multi channel approach?
- [06:45]
C
Yeah so I'll I'll caveat this all with like I don't think we're anywhere near having it figured out. We've been an extremely acquisition oriented business for many years and it's only been the last like year and a half where we've developed the category expansion and the new products where like I think we can really start formally addressing generating LTV and it have like a, a really meaningful impact on the business. So my, my two thoughts here. One, I've, I've talked quite a bit on the pod. We brought in a VP of marketing earlier this year and she sits over retention which we consider email and SMS partnerships, which I think has some retention aspects to it. Organic, social, NCX and that's that whole like community building. How are we telling stories and engaging with customers in a way that will keep them engaged and interested and build affinity for the brand and ideally generate revenue over time. The second piece of that is whether we're launching new products or just trying to get someone, you know, upsold into the next item, how are we like aligning all of our messaging? So like one thing, and I've said this for a really long time and I have no idea. I've, I've seen data points on both sides around whether it's impactful or not. But like how are we sequencing out the messages in a way that is, is best for the business? I just had this conversation with Brian who's a VP of marketing at at True Classic. Because what our approach essentially is, is when someone becomes a lead or becomes a purchaser, Those first like 7 to 14 days are extremely important and I don't care too much about the sequencing. I want to get in front of them with whatever we offer we feel is best. So we'll hit someone through email and SMS and they'll land in some of our retargeting and things like that. But then over time I would really love to be prioritizing the cheapest retention channels so like treating email as number one, SMS as a follow up to that, uh, ads really plays a big part, which I don't think we talk about a lot where that can be a really cost effective way to reach someone. And then the most expensive on like a per person basis is probably direct mail, but can often be extremely impactful. So those are the, the two ways that we're thinking about it most right now.
- [08:54]
A
And, and how do you think about. Because we think about, we think about this a lot with like how do I decide? Like where do, where do I push? You know, we've expanded categories so much since I started here. I think we just launched knives like when I first started working on hexclad and now we have all these different categories and accessory products to our hero product. So We've spent a lot of time thinking about you know, how do we sequence like general category awareness type cross selling with more category specific cross selling. Like how do we. Now here's all our category. You bought a 12 piece set, now you're getting an email flow on all the categories we have. At some point you're going to get another one on all of like knives specific, hexamel specific, apron specific. We're building out more because we need to, we need to build awareness around all the products we have. So how do you think about like you know, I know your, your hero products, the, the, the wallet. So most of your first time orders are coming in and buying a wallet but I know you also acquire people on luggage and rings and this and that. So how do you think about like how you sequence your, which product categories you're promoting in your cross sells based on the first product they ordered. Like you have different flows for all those people.
- [10:03]
C
Yeah, well we have data on like what is most likely to be the second purchase. We know someone's most likely to purchase immediately after the first purchase and this is what I've heard from, from many, many brands. So we know that that first seven, 14, 30 days is, is extremely impactful. We have data around what are they most likely to purchase in that period and it's often like what we would consider within the same category. So if you're coming in and buying a carry on, you might be buying a check in or a backpack or packing cubes or something like that, something directly complementary to your initial purchase. For wallets, that's key cases, that's knives, that's pens. We don't see a lot of cross category shopping. We don't see a lot of someone showing up buying a wallet and then day three buying a wedding band or something.
- [10:41]
A
So do you see them buying another wallet or an accessory to the wallet?
- [10:45]
C
Some, something that is fewer degrees away? Yeah, those like that's why I say it's like within the same category. We think of knives, knives, pens, carabiners, wallets as the same everyday carry category and we see a lot of cross purchasing within the category. So when we talk about driving a purchase, that's really what we're focused on. But at the same time there's so much value, you know, you're never going to have the attention that you do in this first seven day period, like you know, 100 days from now. So we also need to build like cross category awareness. How are we letting someone know that we do have luggage so that when they're in market 45, 60, 90 days from now that we might have a fighting chance to essentially reacquire them at that point.
- [11:26]
A
So do you have like, you have like a short term strategy that's like let's try to sell this wallet buyer, another wallet or an accessory to the wallet and then like a long term of now let's make that person aware of totally the different categories.
- [11:39]
D
Yeah.
- [11:39]
C
And trying to like, trying to accomplish both those things as quickly as possible.
- [11:44]
A
Yeah, got it. Yeah. My team's been really, really pumped on Klaviyo recently and all the like AI enabled segmentation stuff. Like I'm really, I'm really first off we have like, I don't probably seven separate cross sell flows right now that are all like their own flow. We're actually about to. They. They recommend we actually consolidate it into like one single like master web in Klaviyo which I think will be interesting. But I'm, I'm really excited to see how they can almost automate the, the streamlining of like we're going to put person A into this flow because they did A, B, A, B and C. Whereas now it's like pretty, pretty static. Like everyone's going through this. A very similar experience that is like market basket analysis driven but still not as personalized as, as it probably could be. So I'm excited to see where Klaviyo takes that because I think that's super relevant for, for brands like you and I that have a lot of categories. Cody, what about you? How are you thinking about like just multi touch retention in general? I know you guys are like probably very LTV to CAC driven and I bet you guys have like really, really good average lifetime value. Do you feel like that's inherent with your product or do you feel like you're really kind of driving that with your, with your attention?
- [13:03]
B
I think it's always going to be mostly category and product dependent and then, and then like category, you know, dependent. Just like consumable, NPS dependent. Like do people like it? And then I think you get like marginal outcomes with retention marketing. Like you can definitely get incrementality and, and you know, get people to come back but you're not gonna, you know, get people to buy a second mattress in 30 days, you know. So like there is going to be a ceiling on it. But no, it's definitely important. I definitely agree with Connor. Like especially like you know, newer smaller brand like get everything you can out of email and sms like low hanging fruit. Get Your flow set up, you know, dial them in. That'll be cheapest. Get your SMS stuff set up. And then I think when you get beyond a certain size, like it can be very valuable. You know, not everyone's kind of check emails, right. Like 40 people are going to get it. You know, things like that. Like there's just something about having like a real world thing. There's a lot of like staying power of direct mail, you know, where, like where you can get it, people often will keep it on the table. We like to do some like content things where like we've even seen like customers like requests like we have Facebook group and people would be like, where do I get one of these pamphlets? Like, you know, so we try to make them a little bit more educational. So I think there's a little bit more brand building. I love it. I was talking to, I was talking to like a, like a apparel company who has a bunch of stores and they were telling me the only marketing they do specifically for their stores, which is like half their business, is like a quarterly, a quarterly direct mail catalog. And I was just like, that's so simple.
- [14:21]
D
I love it.
- [14:22]
B
You know, so like I do love it. So we've done a little acquisition, but not a ton.
- [14:26]
D
Yeah, for their stores.
- [14:28]
B
So like D2C, they run, you know, the normal playbook, but like specifically for their stores they just do a catalog. And in regions where they have a store, the back inside cover shows that store. And it's just like so simple and genius. It's almost like it's so boring. It's almost like the index funds of marketing where like, you know, your meta and your, your, your, your digital is more of like, you know, your, your day trading or you want to call it. And it's almost like the index funds but like if you can get it to perform, like there's a lot of scale and it can perform really well in, in where. Where it comes to retention marketing, if you guys are curious, actually completely coincidentally, our retention manager just sent me essentially like a recap of our performance year to date. I added a tab in our episode doc and just screenshotted it. We do mainly campaigns around product launches. We'll test a bunch of segments and I think as we go over time we're just kind of trying to continue to refine and hone in on who's performing. Totally echo a lot of the points that Connor McConnell made. Made where like there's a lot of counterintuitive stuff to retention marketing where it's like you know, you wouldn't think, you would think people need to go through a product first before they're going to get it again. But like, no, like almost always the data shows in the first, you know, seven to, you know, zero to 14 days they're going to be most receptive that they're going to be most likely to order. So like we tested that ad ad nauseum and I think the conventional wisdom is like let's let the cheaper channels get them. But, but sometimes we find people are just again you have to test it for your brand, are, are, you know, in addition to their buying behaviors, are, are channel specific. And sometimes getting people while they're hot, even if they're getting email, like it can be still very incremental to get, you know, direct mail during those time periods where, because, because I think we had that same hypothesis like let's let email get them first. Let's direct mail 30 to 60 days. And, and we've actually found much better incrementality which is I think surprising for us to kind of get the, you know, get it to them sooner. We have had some success with win backs. I think those can be really helpful. You know, I, I think it depends. I, so I think a combination and, and if I was to start and you know, curious what our guest thinks later but definitely, you know, some type of kind of like the biggest thing is I think like you know, 30% of, of people that make a first time order aren't making a second. For us it's just like the law of, you know, of the averages. And so the more we can do to kind of hone in on that, we'll do a lot of like predictive ltv which is for us it's either by product purchased or it's just by AOV is actually like the simplest, best predictor of it. And so if somebody spends, you know, $110 above on their first order and hasn't purchased again, like, boom, you know, like we want them getting direct and we're willing to invest a little bit more into them. You know, people are for us are most likely to buy the same thing. And you see that even in across categories, often in supplements. Another counterintuitive thing where you think people would want to buy another thing. But you know, so if they buy Miracle Bomb, yeah, we'll look at what they, you know, their journey, but they're most likely to get, you know, the same thing. But, but I still think like from a brand building perspective, making them aware of other Categories is extremely important. So yeah, I think it's a cool, it's a fun channel. You got to test into it though. It's not like you can, you know, launch a 5K test and just get a winner unless you're super lucky. But I think it's cool to see one. Interesting finding. It's like because we're planning, you know, Black Friday and stuff like that and we'll create segments of essentially people that are like exclusive shoppers or promo shoppers and like it's like that's a customer behavior that we find that like people are that, that buy during our promotions, buy during our promotions and sometimes not otherwise. And so like that's like our most incred, incremental one for something like a.
- [17:45]
A
Black Friday in terms of audience you're targeting with a direct mail campaign.
- [17:48]
B
Yeah, it's just like one of those like cool. Interesting findings for us. Two years ago we had a crazy Black Friday. We're actually one of the top selling brands and products on Shopify. It was really cool. Harley shouted us out on TV and everything which was awesome. But it wasn't all good news. With, with unforeseen growth comes some challenges. And one of the challenges we had was we had a crazy backlog of CX tickets At one point, I'm embarrassed to say, we had a seven day average response time that lasted for longer than it should. A big part of it was our CX software was just not scalable and couldn't keep up. We were using one of those old legacy slow players. There was no AI involved, there was no automation and just the UX was not great. And so when we came into Black Friday of last year, we knew we needed to prepare better so we switched to Rich panel. It was pretty close before Black Friday onboarding was really quick. Two weeks was all it took. They got all of our macros there, they got all of our tickets, they trained our team, they just took care of everything. We got the self service widget set up. I think now like 40% of people are actually getting responses just by the self service service widget. And then we're using obviously a lot of the AI. They have this like social AI moderation tool that us and Ridge are, are big fans of. Our average response time is now within hours. We've gone from 18 people to 10. We're able to. Our CSAT is higher than it's ever been. And so last Black Friday, no backlog. All of our peak moments, we're able to, you know, without having to fully Ramp up our team or like go crazy with it. We're able to get back to people way better, provide a better customer experience and Rich Panel is a huge part of that. So you want to get ready before peak season, before Q4 and Black Friday. Switch to Rich Panel. You'll save money on software, you won't need as many people and you'll be able to just better service for your customers. So go to richpanel.com/demo and tell them Cody from marketing Operator sent you.
- [19:28]
A
Well, it's interesting like I think hearing you guys say that most of like most of your repeat revenue is coming very near term after that first order. We're the same way. Like it's like month one is where we see the most incremental revenue and then it's just you know, step wise less and less and less as you move further out. So we're starting to, because we've, we've grown our, our 12 month lifetime value just by first order cohort has grown really well since 2020. Now not, I don't, I don't want to say it's by accident. Like we've gotten, we've rolled out good products, we've really beefed up our, our retention marketing. But it's not like we necessarily had like a KPI in mind that we were trying to optimize against. It's like we know if we do these things it's going to improve our lifetime value. And it has showed up in the data. What I've struggled with is I want to set like it's hard to give your like retention like a 12 month KPI to optimize against because it's like well what you're going to wait a whole year to see if you move the needle on it. But knowing that most of the revenue is, is coming from repeat in a month. What we are starting to like wrap our heads around is how do we actually set like a year over year growth target on like a 1 to 3 month LTV growth knowing that if we can raise that, that if we can raise that number then that should back into a longer tail number. So we're starting to think like okay, we know last year's July cohort for example, in three months we grew their lifetime value by let's just say it's 35 or $40. Now let's set a growth target on that this year and that's a little bit more, more bite size and actionable which I think is, it's empowering to any brand that's like trying to grow lifetime value. Like you don't necessarily need to wait 12 months, 24 months to see if you did the trick. It's like start with the near term, like Try to grow 1 month, 2 month, 3 month lifetime value on these cohorts and then, and then see if it backs into a longer tail lifetime value. It should, but we're starting to like wrap our heads more around that versus just having you know, channel level KPIs or like, or like opt in KPIs or like repeat revenue KPIs which is, which is ultimately a lot of time dependent on like acquisition and like if acquisition starts to the bed like it's going to be harder for the retention lead to hit their, hit their target. So I like these like 1 month, 2 month, 3 month LTV targets because that's independent of doesn't matter if our acquisition team acquires a million, a hundred thousand or ten customers like that, the retention team still has absolute control over hitting that lifetime value target. Which direct mail is like a big part of. So, so Connor from Ridge, what are, what's your direct mail stack look like right now? Is it like, like I'm curious about campaigns, I'm curious about automations and I'm curious about which segments that y' all are. Are specifically using direct mail on.
- [22:15]
D
Yeah, we are.
- [22:16]
C
So our history with direct mail is we started experimenting with it I think December 2021.
- [22:23]
A
Okay.
- [22:24]
C
Maybe even earlier. We were doing, we were doing, we were doing pretty large 24 catalog, like large sends. It was like a couple hundred grand. That's how we got started. And I have two interesting points here. We eventually ended up turning it off because during COVID this was crazy to me, especially as a marketer. Like we have to face the headwinds of like constantly increasing CPMs. And at the time you had iOS 14, so things were tracking worse, et cetera, et cetera. The, the problem we were facing with direct mail was that all of the paper supply was going to E Commerce packaging so they were running out of paper and it was driving up the cost of paper. And we ended up like pausing our direct mail efforts at the time because a 24 page catalog was going to go up like 40% in cost. And I was like, oh this is crazy. So it's just funny the way that different, different sorts of, what's the right word here like competition or demand can affect costs in different ways. So that was our.
- [23:21]
A
Yeah, it was a zero sum game between the direct mail paper and the ecom Packaging.
- [23:25]
C
Yeah, yeah, exactly. So, so we paused it. I do have a good. Let me pull it up here. OB observation of traffic over time. I'll share my screen because Cody, you called this out and I think this is. This was one of my favorite things with the 24 page catalog was we saw it just like presumably sit on people's coffee table. So this was Father's Day 2022. So the direct mail lands like what it starts to land right here and then we're like in all the homes by this date and basically what we're seeing is like 60 to 70 transactions on a link attributable basis. So this was like ridge.com new was like the vanity URL that we used in the direct mailer. But you can see like the length of time that the traffic comes to our site on it starts, it peaks on May 31st but then we're still getting hundreds of people a day all the way on June 6th. So I was super blown away by that. That's another really interesting experience we had.
- [24:16]
A
With direct mail intent of that traffic. I mean four and a half minute time on site like 17 conversion rate which is. That's pretty insane.
- [24:26]
C
Yeah, totally. So, so that was our history with direct mail and this was obviously before we paused our efforts. We are now. We just wrapped up our first test with post pilot. So we ran an incrementality test and then we just did it to re engage customers. So that's where we're at right now. We're probably going to just focus on how do we most effectively reactivate people at different times. So at least my priority is not around behavioral flows necessarily but like if we're going into a Father's Day or we're talking about it for Q4 now or for a new category launch in the future, like what, what role can direct mail play in that? I'd like to really nail that.
- [25:08]
B
That's. That's essentially what we've done, you know, year to date and been focused on mainly. And I think that's like a great place to get started as well because you can also get a lot of learnings on segments especially if you like build different segments and then you can take that into more of like an automated always on strategy if you wanted.
- [25:22]
C
Totally. And it goes back to your point Connor. So we do the exact same thing from like a KPI perspective. Is I 30 day LTV by category. If we get a new travel customer, what's the incremental dollars we'll get in.
- [25:33]
D
The first 30 days?
- [25:34]
C
The additional dollars.
- [25:36]
A
And who owns that KPI? Is that your VP of marketing or is that your like. Or do you have like a retention manager?
- [25:41]
C
We have a director of retention. Yeah. And so we have.
- [25:44]
A
Okay, we'll own that.
- [25:45]
C
And then what I was going to say is I think that is a great strategy for improving LTV over time is like how do you just refine these? Like, it's like a cohort based value that you can extract from customers you've acquired. And then the other, the flip side to it, which is I don'. Know if I'd put more of a value on one or the other. But just like as you go into a new campaign, period, how are you blasting all of your customers? How are you getting back in front of everybody who this is relevant to and extracting value from them at different times? So those are almost like the two big approaches that we've taken to. Yeah, like I said, continue to maximize the value we can get from existing customers.
- [26:19]
A
I, I think you, one of you guys said something that I think was you, Cody, that I really agree with when it comes to direct mail is it's such a, a just a nice brand building piece of creative. Like yes, it can absolutely be direct response. And it is. And I think we'll, we'll get into that in this episode. But like we, we did this last year where we made this really gorgeous holiday mailer that was relevant for Black Friday for Cyber Monday. It had literally every single, every single product. I'm actually going to try to find it real quick. Yeah, here it is. I'll share my screen. So this is the one we produce. And this again like same, same strategy. We, we very much were sending it to a bunch of different segments and then measuring the incrementality, the IRO as how much incremental revenue, incremental efficiency on this piece of creative. But like I just the. Even if it never drove a sale, it was just such a great impression. Our, our creative team did such a good job with it. So you have like very, very on brand Thanksgiving headlines. Table of contents about us.
- [27:23]
D
Oh cool.
- [27:24]
C
How many pages is it?
- [27:25]
A
This is a 16 page.
- [27:26]
C
Yeah.
- [27:27]
A
Mailer really quality. Like the actual book itself like felt really premium and like a super holistic. So it's like Thanksgiving more general about us. And then every single category is represented here with like the value props. We're using social, social proof. Then we have our like Thanksgiving page.
- [27:47]
C
Totally.
- [27:48]
A
Yeah. This went to our recipes. Yeah. And like so it was, it was simultaneously brand forward product category forward Content forward a lot of good social proof. Like this is a. Just a really. And now we'll be able to. We're basically going to iterate on this forever probably every single year. Really is like what we'll plan to do with these holiday campaigns. Like you just can't. I don't know. Like this is a very unique ad unit. Right. It's, it's hard to do something like this in, in like you're not going to make a Facebook ad that has that same, that same like resonance with your customer. So that's at least one of the. I mean this is an expensive mailer to make. Obviously being 16 pages is a lot more cost effective ways. If you're trying to do a test, I wouldn't recommend you start with a 16 page mailer probably. But like we tested into that after seeing some of the like the single like the double sided inserts work really well. Like all right, it's time for us to go invest in like a more a bigger brand moment. Especially when you start to like get the creative production resources that, that you need to do stuff like this. So I thought that was really cool. Like we did something cool for the, for the big game sale. Connor, I saw your, your sweepstakes creative in here. That looks really cool. I'm, I'm jealous. We're not planning to do direct mail for our sweepstakes, but I might have to add that to the list next year. Can you talk about your, your sweepstakes direct mail? How did that go?
- [29:10]
C
So this is our.
- [29:12]
D
Let me share my screen.
- [29:13]
C
This was our post pilot test and the way we structured it, we just targeted existing customers. We broke it out by engaged and unengaged customers. I only have one side of it here. We had two segments, engaged and unengaged customers. Because intuitively I would have thought that getting in front of unengaged customers would be more incremental that we're like no longer. So we like based our cohorts or. Sorry, we based our segments off of email and SMS behavior.
- [29:40]
D
Right.
- [29:40]
C
So I'm like, okay, look, these people are no longer opening emails or SMS's. They likely don't know about the sweepstakes. So if we're getting in front of these people with sweepstakes messaging, that that would be the most incremental. Yeah, that's how we structured the test. So to Cody's point, what we actually saw was, was better incrementality. So we saw a significantly higher rows. We had like a 5x roas and then Iroas on engaged customers was about 40% higher than the unengaged customers. So that's what we learned from this test. But obviously incremental and profitable. So happy with both of those results. I think we have a lot to improve on. So my two thoughts are one, sweepstakes might not be like the best time to be re engaging customers. It is like a little bit, it's a little bit of an odd campaign. What we see is like many people are just not all that interested in participating and earning entries and maybe winning the cars. So in the Future going to Q4, we'll probably run similar sorts of tests. We'll scale it up because we're comfortable with the results as they stand now and then just continue to experimen with like the messaging and the format and things like that.
- [30:39]
A
Do you guys have any thoughts on. You know, I think there's a, there's a lot of. I think people think about direct mail often as a way to reach people that they're not engaging with in their own media channels. So it's like, you know, we're reaching out to like maybe it's people that have engaged with an email but they haven't bought in a long time so they're keeping it totally separate. Which I understand that approach. I also, especially being a high price point product and premium brand like I, there's, there's a lot of power in showing the same person an email, a text, a piece of direct mail, a loyalty ad and like hitting them with different messages on different channels. So do you guys, do you have any thoughts on that? Like are you guys excluding anybody that you are getting engagement with and orders from in your own media channels and hitting them with direct mail. Do you, I mean, I think what you're showing us is that, that your engaged audience here was more incremental. So assuming those people were also getting a lot of other marketing messages, like how are you thinking about that? Maybe. Yeah, go ahead.
- [31:39]
C
Well, so I was, we tested it because I was hoping to be able to exclude the engagement. I'd love to be able to say, hey, I'd love to be able to say it's not incremental. We're getting them via email and sms. Like, and that's great. So we're just going to focus on the unengaged. No, we saw the opposite. So like it is, it is to, to the very first point I, I made. I would love to be able to sequence out messages in a way that is most cost effective. Intuitively that makes sense to Me. But we continue to find data points that say at certain times of the year for certain campaigns, you're best off just adding multiple touch points. And that that can be extremely incremental.
- [32:12]
B
Connor and I had exactly the same, like, thought and hypothesis, which is, I think, very logical, which is like, you know, let's let other channels do it and it'll be more incremental on people that weren't going to buy. And then it seems like it's more of like, if they are engaged and almost like in the funnel that like, you know, reaching them more often is worthwhile and spending more on them is worthwhile, where it's almost like the opposite of acquisition. Right. Normally it's like, you know, YouTube's gonna be more incremental than brand search, but this is maybe retention is slightly different where it's like, hey, actually, like when they are closer to the point of conversion or engagement, like, that's a strong signal that it's actually worth spending more on them, which is a little counterintuitive. I definitely agree with the points that you guys had, especially, like brand building and stuff like that. Like, there's a few brands I think do it. I mean, like J. Crew just brought their catalog back. Like, people go crazy for it. Like, it essentially sells out. Faraday does a really great job of it. They have a lot of their own stores and like, they do a lot of really, a lot of editorial stuff. So it's cool. You guys both did some show and tell, so I got some here as well. So I. This is ours from last year. We did essentially the same thing. Like a catalog, I think was like a 16 page mini catalog. I saved this just because I thought it was like, really cool and I was gonna put it up on a wallpaper. But yeah, like, same thing where we had, you know, our whole thing. I'll just show like a few different views of it.
- [33:30]
D
Yeah, I did it.
- [33:30]
B
It left the whole thing. Yeah, so I was like, kind of save it for a wallpaper. But like, I. I totally agree. Like, I. I think I just feel. I saw you guys remember like Nate Poulin, like, digitally native on Twitter. He like said one time he was like, you know, brands that do catalogs are like. And I think he was thinking like, you know, the old school, like Lands End and stuff like that. Like, it's almost like the perfect trifecta between, like marketing operation, like, you know, inventory planning and stuff like that. Because you're working on like, you know, quarterly cycles and things like that. And like, that's almost how I feel about like marketing. It's like you know, it's, it's again it's a, it's not very common but, but it definitely happens where brands will do these beautiful catalogs. But it's almost like this perfect combination between like, like performance. It can be very incremental brand. It can really build that like creative like it can just be this like perfect little like trifecta between them that like you're not really trading off one or the other. And I think that's like really cool if you can crack in and do it right.
- [34:27]
C
I mean I, I just had the thought both of your guys catalogs are, are really goodlook. And then I brought up the data where it's like, oh yeah, clearly these are kind of like sitting on people's tabletops for weeks maybe and then they're flipping through it and finally engaging. And it's like if you think about that compared to ads, I mean like nobody is, nobody's putting our meta ads on their desk because they think it's like a beautiful piece of content.
- [34:51]
B
Well, it's Tim and I. I think it's similar to TV where like you know, being on TV gives you a little bit more like trust and like people think a little higher of you. It's the same thing. It's like in today's digital world, like you have to play the digital game. We all do a ton of it. But like I think, think if you can get like an impression is not an impression. And having a 16 page catalog on somebody's desk that they walk by every day is probably worth a lot more. Or if they're opening it and actually flipping through it, it's like much more quality impression than you know, a quick scroll on a TikTok ad.
- [35:21]
C
Totally.
- [35:22]
A
Yeah. And there's also, there's also huge value into doing whether it's a campaign or, or a marketing event that, that people are anticipating. Like Ridge has run the sweepstakes for five years now. You're at a point now where I'm sure people are like, I'm sure summer hits and people are like thinking to themselves like oh, I'm really excited to see what Ridge is giving away for their sweepstakes this year. And like that's why we're keeping on with the Gordon's Golden Ticket 2 branding for the same reason. Like we want this to become something that is repeatable. And because it's repeatable, people are like eager about it and they're learning about it and they come to anticipate it.
- [35:57]
D
It.
- [35:57]
A
No one's like, no one's like going onto Instagram scrolling and thinking, oh man, I can't wait to see what, what Jones Road beauty ad I get. But I think you, you could probably do that. Like if you're gonna put out like a biannual catalog. I think that could become something that people are like, oh, like this is the eighth year for sure. You know, Half Days has done their winter catalog and I'm really excited about it. Like, and then they do another one for the summer. Like I think that can actually become a piece of marketing that, that people look forward to getting versus another Facebook ad, another email, another branded like conquesting ad that says don't use competitor. Like use us. Like no one, no one's looking forward to that. So I think direct mail's fun in that regard. And I think also this, this goes without saying based on the examples that Cody showed, I showed in Connor show. But this is, we're not talking about this like this VAL Pack direct mail approach where you get this like, like envelope and inside the envelope are 198 of the thinnest, cheapest pieces of like, I don't even know what to call that paper, if it even is paper. That's like Rick's lawn mowing service and all these like random untargeted ads. Like this is it. No, like, not that that shared stuff can't work because I think it can and it makes costs go way down. But like we're obviously talking about like a very premium feeling piece of, of direct mail. It's, it's in. No, like, like we've not done any of the like VAL Pack esque stuff. It's all, it's all stuff like we're talking about right now.
- [37:24]
B
Yeah, yeah, I was just gonna say how it's like, like totally agree. It can be all the way brand building catalog but also like it's also don't let that stop you from starting because it can also be as easy as designing, you know, just like a postcard.
- [37:36]
A
Yeah.
- [37:37]
B
And then it can also be like full funnel. It's like one of the only channels that like you can reach loyal customers, you can reach prospects, you can reach, you know, acquisition. Like it can be very full funnel too though.
- [37:49]
C
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- [39:03]
A
So this is probably obvious by now. We brought it up a few times in the first part of the episode. But but Hexclad, Jones Road Beauty, Ridge are all Post Pilot customers to to to power our direct mail we have Michael who is the co founder and co CEO of Post Pilot here for a sponsored segment. So we're really excited to kind of dig more into. You know we've talked a lot about direct mail. We'll keep talking about direct mail, but specifically why why Post Pilot is is our vendor of choice. But before we do that, Michael, you have a very interesting background. You've been in E commerce for a long time. So as your partner Drew, who are you, what's your background and ultimately how did you land at launching and scaling postpilot?
- [39:44]
D
Yeah, well thanks gents for having me on. Always good to see you guys. And yeah, I'm pretty old. I've been in e Comm since 2000 and so Drew, my Drew Sanaki, my co founder and I have been on the brand side for about 25 years at this point. We both started companies, sold them to private equity and then got into private equity operating work where we were focused mostly on turnarounds. So for over a decade we were doing typically nine figure brands. Losing eight figures was sort of our sweet spot and we would go in and acquire them and have to get them profitable and growing again and then, and then ultimately exit them. But yeah, we've been, we've been around since before Shopify, before Facebook, before even Google AdWords. So yeah, we've, we've seen a lot. And we started Postpilot really because we use direct mail as one of the tools in our tool belt, especially at the turnarounds because we go into these big busted brands with like 5 million customers and most if not, you know, the large majority of them had, were unengaged at that point. So it was like, what are some quick wins we can use to wake these people back up and get them engaged again? We'd send them a postcard and it worked really well. But it was, you know, the stereotypical, really clunky experience of finding a printer and securing paper and using spreadsheets to try and get this launch and then waiting months to try and piece together attribution. And the thesis was direct mail works. It's just hard for, especially for a digitally native marketer. So we said somebody needs to build Klaviyo for direct mail. And that's really what we did it.
- [41:23]
A
That's awesome. Yeah, it's. There's I, I love when, I love when brand side marketers take a solution or a tactic or, or whatever that they used at in their experience, brand side and then productized it for. I think it's like you, you guys know better than anyone what people like me and Connor and Cody and a lot of other marketers need. You're seeing the guys from Chubby's do it now. Well, they did it with loop returns. Now they're doing it again with an attribution tool called Marathon Data. So it's just they, they can, they know what we need. You guys know what us, our brand side marketers want and need more than anything. And it shows in the tool. I want to, I want to read what you said. Like the usp, the unique selling proposition of post pilot is, I think the way you worded it is really clear and it's like a good, you know, single few lines that, that speaks to what you guys do well. But then I want to actually turn it over to you and like have you drill into it. So what you wrote is how we made what used to be slow and tedious process slash channel fast and easy for modern digitally native marketers. Native Shopify and Klaviyo integrations, dedicated account management to help us set up strategy optimization, all the things and creative team to help with design. The ability to launch in days and on short notice and no minimums, making it very easy, low barrier to entry. So, so that those are your written words. But can you speak to us like what, what problems are you seeing with direct mail that Post Pilot solves? And like what are, what are. Like the, what do you feel like are the big leading value props of Post Pilot that makes it the, the ecom, the E Comm marketers direct mail vendor of choice, which it seems to be almost across the board. When I talk to brands doing direct mails, they're using Post Pilot.
- [43:10]
D
Yeah, appreciate that. And yeah, I think you, you hit it at the beginning, which is Drew and I have just lived and breathed this customer for decades. At this point we really understand the needs of the digital marketer because that's what we've been for a long time. So we were able to really build out a product in the way that we felt solved a lot of those challenges. Like you articulated Connor, it's really trying to make it fast and easy. Brands are used to being able to launch an email and see things happen really quickly, launch a Facebook campaign and start seeing results come in, have dashboard where they're able to monitor the performance of all these things. That's what we tried to replicate here. Again, the thesis originally was sort of building Klaviyo for direct mail and now we've expanded into full funnel with acquisition. So think of that more like meta for direct mail. We understand these channels, we understand what digital marketers want and how to replicate that type of experience with an, with a channel like direct mail. So fast and easy, we really focus on that. Nobody has time to learn a whole new channel or spend a whole bunch of time figuring out how to design a postcard. Waiting weeks or months for attribution to come in through spreadsheets to make decisions. We wanted to solve a lot of those pain points. And I think that's what we really started with. Real time dashboards launching again in a day. And then over time we've really built up this powerful data asset because we work with, with thousands of brands doing millions and millions of transactions, billions and billions of dollars in revenue. And that ultimately is what helps us drive superior performance for these brands as well. Because we understand really deeply what works and we're able to target much more efficiently and effectively and know the best practices that's going to drive the best possible performance from the channel. So you know, that's really a heavy focus for us. And again, why, I think, think lots of reasons why we're different from sort of traditional direct mail providers, but also it ultimately comes down to performance and we Want them to see our brands as successful as possible. And I think we do that.
- [45:21]
C
That's one of the, like, really geeky details that I always like about, like, just new vendors. We, we. We had a traditional, quote, unquote, traditional direct mail vendor years ago. And I remember targeting is like. And you'll have better examples with your experience, but, like, like household income. Right. Or you'd target, like, a set of zip codes where homeowners are likely to be more affluent. It was, like, very rudimentary. I think you could, like, enrich profiles with, like, some credit card data. So you could be, like, buying data manually and doing it that way. So is that more or less like the original direct mail targeting? And then I'd love, like, more specific examples of, like, how you guys are able to improve on that.
- [46:02]
D
Sure. Yeah, Great point. And you're right. Traditionally it was like, blast a bunch of people in a zip code with a certain income or something like that. And we have thousands of attributes on essentially all US Consumers. Think of it again, like Facebook look alike audiences. And that an example of targeting we've done really successfully is, like, for baby brands, we're able to target expectant mothers in their third trimester. Like, that's the level of data that we have on customers.
- [46:36]
A
Wow.
- [46:37]
D
Who's shopping at Target frequently and buying organic food? Who's a Nordstrom shopper and buys luxury women's apparel and drinks premium wine. And like, just thousands of attributes on all US Consumers. And then we also have tons and tons of transactional data that we understand who's buying from what types of stores and things like that. And again, I think that's what really allows us to increase the performance of. Of the campaigns because of the targeting capabilities, not just knowing the basic demographics or basic transactional history, but tons of demographic, psychographic and transactional attributes of every US Consumer.
- [47:20]
A
So basically, with every. Is it safe to say then because of that, with every customer that you guys onboard that all your existing customers are in, like, theoretically or in practice getting actual better opportunity to get more performance out of direct mail? Because, like, if you bring on brand a that's doing $100 million in revenue per year and they have all these customers and you're getting access to that data, are we then able to. Is like, hexcloud's performance able in Jones Road and Ridge able to actually leverage the aggregate pool of data that you're continually growing to get more performance?
- [47:57]
D
Yeah. So I want to make this point really clear. Like, we never, ever, ever share data across Brands, we never allow a brand to target another brand. That data, there's no crossover between brands in any sort of way. We have, we're, we're able to train some of our AI models across aggregate data of thousands of brands and be able to use to understand certain signals in addition to a lot of the demographic and psychographic attributes that we have on each US consumer. But we absolutely. You cannot come in and say I want to target some cookware brands customers. And we would never. There's, there's no mingling of that data at all.
- [48:44]
A
Yeah, yeah. It's the same way. No commerce they're creating. They're the same thing. Right. They have just an insane number of data points and they're not, not sharing that data per se. But I can go at least and look at my data and say how does my data index against all these like broader attributes, right? Like how does, how does the Hex cloud consumer index on how they consume certain media or what's their age or gender or like how is our first touch channels indexing against their aggregate data set? Which is really helpful. It's like to understand where you should go and do more or less of but same thing, right? They're not, I'm not going and getting access to like ridges post purchase server data directly. So that Good point. To clarify Michael, one thing I thought would be, would be. Do you have another point on that.
- [49:34]
D
I was just going to mention we actually just like this week released a new feature in the app which is peer group benchmarking. Which is exactly your point Connor. Across thousands of brands we understand performance, the KPIs amongst peers in a particular category and that allows you to benchmark your KPIs against aggregate data in your category. And that's what to your point, what I think is really helpful and compelling is that we know what works in the category because we have all of this data and that's what we drive you into from a strategy and creative standpoint, using those learnings to improve your performance and be able to benchmark your performance against large groups within your category to understand how we're stacking up where we have opportunities to improve what we're not doing that other folks might be doing successfully.
- [50:29]
C
I'd like to ask one more question on kind of the improved processes and technology. Another thing that I always liked about even traditional direct mail is that attribution's pretty good. Like you can do, you can do address matchbacks. So it's like if I'm going to mail these thousand People I can then look in 30 days and see how many products did I ship to those thousand addresses. I imagine you guys do something similar. Now I'm also curious in what ways have you been able to improve on.
- [50:57]
D
On attribution? Yeah, great question. Obviously hot critical topic for this group and everybody that listens to marketing operators. So you're right. Like the great thing about direct mail is we have one to one household level or user level attribution. And because we're natively integrated with Shopify, we're able to do that matchback process in real time and show that to you in a dashboard. And as you all do, we also have been able to launch in app incrementality and hold out testing so that we can take those randomized segments of any particular audience, hold out that group and show you live incremental data in the app as well. So that we can always lean into what we see as driving incremental growth and move away or optimize the campaigns that are underperforming on an incremental basis. And that was a pretty big innovation to be able to do that directly in app and huge innovation.
- [51:55]
A
Like that's my favorite part about your tool and I Connor, I still like, like what you showed earlier, you showed the, the UTM base which I think is good as well. Like I think there's, there's ways to structure how you message and how you do your CTA and offer to like really push people into using the utm. But naturally people aren't going to use the QR code, they're not going to fire that utm. Naturally someone might order and you might do a match back but who's to say that person wasn't already going to order? Especially if it's like a loyalty play. Your guys user level holdout testing I think is something that every marketing vendor that's basically leveraging a brand's first party data to send out messages. So email, sms, literally everything should be, should be mirroring because it's just so easy to understand and make decisions like that you don't have to because that's the other part that I really like about your tool is like the, the feedback loop and the decision making loop is very, it's small because you don't need to do this big deep data dive on, on understanding if it worked or not because it's built natively into your platform and it's the gold standard, you know, attribution measurement methodology that marketers care about with or should care about if they don't which is just, just hold out tests. Hey, we have 10,000 people that fit into this segment. We're gonna send the direct mail to 8,000. We're gonna hold out 2,000. And like how, let's measure the revenue per user between those two. Like that's it right there. That, that's, that tells the whole story. And that's why I like your guys tool because it, we take the same creative but then we'll have like it's like our, our big game sale creative. Right? We have the single piece of, of creative but then we sent it to like like eight different segments of people separate. And then we can actually be very intentional on like all right, these three have the best, most the highest IRO as the best volume. Let's keep, let's keep doing those segments. Let's, let's nix the, the next batch of segments. Was that always part of the platform or did. Was that like you guys hearing that marketers really want to hear like see incrementality, see holdout test data to prove these things out and then did you build it in or has that been top of mind from the jump?
- [54:05]
D
It was definitely top of mind. We didn't launch at the very beginning with built out incrementality. And to your point earlier, you know, a surprising thing for a lot of folks is how few people actually use the coupon codes or scan the QR codes on the card. Most people think oh if I put a coupon on the card, like 100% of those people are going to use it. Why wouldn't they? It's like a discount. But what they just don't, what doesn't actually happen in real life is like they find a different code on the site. They find a different code on honey, they just forget the card's not sitting in front of them at the time that they purchase. Not a lot of people candidly scan QR codes. And so as you said, incrementality and holdout testing is really the gold standard to measure the isolated impact. And I agree with you. I think really all marketing platforms should have that, that type of capability built in. And what we were hearing was folks were getting confused between thinking I just need to rely on coupon codes to measure the performance of this. And we know that that severely understates performance, the actual impact on an incremental basis. We've done a ton of studies on this and typically coupon redemptions understate true performance by a factor of 3 to 7x. So we were pretty quick to Start building in the incrementality.
- [55:27]
A
So that's like the multi. So you'll, so if you see, if you see a direct mail campaign drive $50,000 of revenue through coupon codes, you're saying at a minimum often that it's actually, there's 3x more revenue actually coming through that campaign or up to 7x more revenue as seen through the holdout tests.
- [55:46]
D
Yeah, because we've compared, we have, you know, so many campaigns in our data set and can compare incremental performance to the number of coupon redemptions for that same campaign. And that's what we saw consistently 3 to 7x was the spread between incremental ROAS and coupon redemption. So yeah, it's, you know, it's not a great way of measuring it. So it was really important for us to build the incrementality testing directly into the platform so that people could get more comfortable with a true understanding of the impact of the channel. Because to your point, we all know that if you just look at redemptions, just total raw matchback data that's going to be overstated. We know that some people would have converted off of email or SMS or another channel. So we want people to feel really confident in the data. And that was, you know, that was a pretty big innovation that we spent a lot of time on and making sure it's done accurately.
- [56:42]
B
Also on the other side, you might not like me saying this but also a lot of these people were going to buy anyways. And before you joined, Conor McDonald and I were talking about how some of our strongest, most incremental segments are the most engaged, which was counterintuitive to us. But a lot of those people were going, I don't want to say were going to buy anyways, but they were like those are very strong segments. And so I also think it is the same way you're under reporting by just looking at codes and that's very small over reporting by looking at just like roas of, you know, here's how much we spent on the segment, here's how much revenue those segments generated not counting in incrementality. And so I would go as far as saying, you know, in either scenario I wouldn't personally run direct mail without measuring incrementality because I think it kind of means nothing. And in the same way I also would be skeptical of getting an 8x roas and then I would be not confident. And I think because incrementality is so foolproof and so, you know, so controlled, I think then if you get a good readout with that, you can be very confident that this is now producing what you want.
- [57:43]
D
Yeah, I think you're exactly right. We, we would never claim to take a hundred percent credit for the number of people in a audience who ultimately go on to purchase who are impacted, potentially impacted through other channels.
- [57:56]
B
Some vendors do though.
- [58:00]
D
I know.
- [58:04]
C
All right. I have the pleasure of telling you about our sponsor Revo, which is a retention platform for Shopify plus brands. They cover everything from accounts to loyalty, referrals, memberships, store credit, wallet passes and more. Ridge is a loyal user as well as hexclad, Dr. Squatch, true classic, Portland Leather Goods, Kitsch, lskd Princess, Polly Pit Viper, GRA and hundreds more brands.
- [58:26]
A
Brands.
- [58:27]
C
There's some really big brands relying on Revo to power their retention platform every single day. I am a firm believer in signed in shopping. One of our strategies to generating more lifetime value to simply make a better experience to be a customer of ridge.com and Revo plays a key role in that. Stuart, the founder there, one of my favorite people to work with. The platform's fantastic. They're fully bootstrapped, they are shipping features extremely fast with very cool agentic workflows. And they are just about to launch the new Revo editions with 30 plus updates. My favorite update of all, they are launching Wallet passes. So you'll be able to get your. Your customers downloading Wallet passes and sending them messages via push notifications. It is totally free for all Shopify plus stores. Go to Revo IO today to check it out. I. I have a very nerdy question here as well. That's related though. But I was thinking about this earlier. We just got our incrementality testing back and we have a ROAS number and then the incremental roses is. Is less than that obviously. So the incrementality factor is less than 1. And I was thinking about it the way attribution works for direct mail. I don't think you could possibly report a higher incremental roas than a reported roas.
- [59:36]
D
Correct. There would. There would never be a case where pure sort of raw roas on a just audience matchback would be higher. Would be incremental. Is always going to be lower than that.
- [59:49]
C
Totally.
- [59:50]
D
Yeah. Yeah. But I think one of the great things that you did, Connor, with, with the tests that you ran was and this is best practice and I know Cody and Connor are. You guys have always done this too. We test into lots of different cohorts, especially at the beginning and understand, you know, Just like you're launching Meta or other channels, you're not just testing one creative or one audience or something like that. You're testing a bunch of different cohorts and then you're looking at the performance of each one and looking at their incrementality of each one. And you're going to see fluctuations between people haven't bought in three months versus people who haven't bought in two years. Understanding the incrementality of each of those cohorts independently and being able to scale into the ones that are working and move away from the ones that aren't working is like our sort of SOP and our playbook. And you all have done that really successfully. Again, Connor, your recent test, there were some cohorts that weren't incremental. And we learned that. We want to learn that at the beginning. We want to learn which ones are really incremental because lots of your cohorts were three 4x incremental ROAS. So those are the ones we want to certainly lean way into and move away from the ones that weren't 100%.
- [61:05]
B
Yeah, we were talking about before you came on how it's like a lot of the ones that we thought would be more incremental actually were not. Like, I think Connor and I both had the hypothesis that like, you know, the, the more of a reactivation, like less engaged customers that are probably not getting email and SMS would be more incremental because, you know, other people are buying anyways. But we've both found the opposite, which is like, if people are prime, like it actually makes sense to kind of spend a little bit more on them. Is that like, are there any, like all of these, are there any best practices if a brand is starting in terms of thinking about segments? Or do you think it's very much dependent on category and brand and like it could be more incremental for another brand to go further out and not go closer to where point of purchase.
- [61:44]
D
Yeah, it's a great question. And, and I do think the data, we see the data vary by brand and by category a lot. And that's why we think it's really important to test a variety of these segments before you deter make a decision on whether this is working or not working. And to your point, it was, it was really interesting. Is again, Connor, your recent test segmented, engaged versus unengaged. And that's a common practice that we have with, with brands because it's. With our Clavio integration, we can filter out people who are actively opening Emails or if they're on SMS or Clavio actively engaged in sms. And, and interestingly, oftentimes as you said Cody, the, the engaged audiences will be more incremental. And, and it's, it is sort of counterintuitive. It also, there's also data that suggests that multiple touch points when working together. You guys know this super well because you have lots of media in play across multiple channels. There's Halo and spillover of those channels which drives improved performance across all of your mix. And I think that that's something that we've been able to see as well with direct mail. It actually, you know, can work really well in conjunction with the other channels that, that are actually, you know, in play with your customers. And it drives, it can drive higher incrementality, but that's not always the case. So sometimes if a brand is seeing, you know, low incrementality on a particular audience but high response rate from that audience, we might say okay, let's, let's filter out some of those most highly engaged folks to try and drive up incrementality among that particular audience.
- [63:25]
A
So I want to make sure, I want. This is, the measurement piece is awesome. I think we, we cover that pretty well that like Klaviyo and, and I think Postrip does a pretty good job. I think Klaviyo could maybe do a little bit better job of having some like native. I love Klaviyo, huge Klaviyo fan. But I think they could do a little bit of a better job of having some just like more turnkey native holdout solutions which would be sweet. But I want to make sure we talk about tactics because this is, this is the fun stuff. Like obviously the three of us were, we're operating and running nine figure brands but I know for a fact that Post Pilot is very accessible by a lot of brands, a lot of different revenue sizes. One of the things we had Zach do Zack stuck from Homestead and he runs hollow is he actually talked about like the different tactics that got hollow to 1 million to 10 million and now I think they're at like a 50 million dollar run rate. So I thought it'd be cool to actually, I want to ask you Michael, like how do you see people using Post Pilot and Direct mail? Like what are the different tactics? You know, acquisition, retention and then there's all sorts of different ad units, drill downs within acquisition and retention. And then I don't know if you have any notes on like brand size, like 1 to 10, 10 to 50, 50 to 1. Hundred if you could maybe like we see this working best with this brand of this scale. Yeah, like what, what are the ways that like this is the fun stuff. What are the ways that people can use, can, can activate direct mail through Postpilot strategically?
- [64:55]
D
Yeah, absolutely. So it is a full funnel channel. You know, we have the ability to run retention warmer acquisitions. So like retargeting campaigns and prospecting and our general recommendation and sort of playbook is start lower in the funnel and work your way up. So there's generally always easy wins on the retention side. It's finding those cohorts that are going to drive significant incrementality and then starting to scale and automate those again. The win back campaigns, reactivation, things like that, anti churn or, or reactivation, start there, get some easy wins and work your way up the funnel from there.
- [65:37]
A
So are you guys able to. If, if people are starting there and they're saying hey, we want to reactivate previous buyers, we also want to make it sure it's super cost effective and super additive. So let's just say people want to engage the folks they're already reaching through email, sms. I know you guys have some functionality that lets you exclude people like that you're hitting with other retention channels. What's that technology look like? Like how are you excluding certain people that you're maybe reaching in Klaviyo or postscript and then making sure you're targeting people that you're not with direct mail?
- [66:11]
D
Yeah. So the easiest way is with the Klaviyo integration. We have integrations with other tools as well where you create a segment of actively engaged subscribers. So people who have opened, you know, one or more emails or clicked the email over the last 30 days, then you can use that as a dynamic suppression list in the platform.
- [66:32]
A
Okay.
- [66:33]
D
And we just, we sync in real time with Klaviyo and or these other tools and by applying that as a filter to the audience. That way again, if we want to target and focus more on that less engaged through other channel audience, it's a really easy way to do that.
- [66:50]
A
Which might not be the right to Connor's point earlier, like that might not be the right strategy. Like it's often better to hit people in email and text and direct mail and that's often more incremental than hitting someone that's not engaged. And maybe that person in email that's not engaged is not engaged for a reason. And it's actually not incremental to send them direct mail either. It could go both ways Is right. Yeah, I thought that was really cool. So. Sorry. Yeah, so now you, you were saying moving, starting like loyalty retention and then moving up the funnel. So what would, what's the next kind of like phase there?
- [67:21]
D
Yeah, typically the next one that's sort of a no brainer is when we match people who have opted into your email list but never purchased from you to a physical address. And so we have, again, we have all of that data in house and, and can do that matching. So that.
- [67:39]
A
But yeah, so how do you do that? I think that's so cool that you guys can do that. Obviously someone that's opted into email, they haven't placed an order. So like I have Michael Epstein's name, email phone number. I don't have his address yet because he has not placed an order. But you guys are actually able to attach an address to the, you know, two to three data points that you do have. Like what, what technology are you using for that?
- [68:03]
D
We just have a ton of data that we've aggregated and invested a ton into over the years to be able to aggregate massive data sets into our own data warehouse, which includes hundreds and hundreds of millions of email addresses and their corresponding postal addresses. And then we also built technology helps validate that those postal addresses that we're matching to are current and accurate as opposed to something that somebody you know might, that is sitting in some database somewhere from 10 years ago.
- [68:35]
A
Is that like a third party, like data like Axiom or are you actually using the brand, like the data from the brands you work with to say like all right, actually Michael Epstein placed an order with this brand at this time, so we do have his address. Or is it, is it like not through your brand's data? Is it, is it like, you know, we work with this CDP that has access to this, you know, they basically bought this massive data set and that's how we're able to like, like see where our customers index against a bunch of attributes. Is it, is it more that that is the approach?
- [69:07]
D
Yeah, we've generally aggregated a ton of third party sources to be able to build out a really rich set of this data. And again we don't use other brands data to do anything. We have trained our models such that that's some of the signals that we can use to help validate the current, current, how current and accurate those addresses.
- [69:31]
A
Got it. Okay.
- [69:32]
D
So cool. Yeah, we want to make sure we care most about accuracy of these addresses because we know that there's a cost to send a card to somebody that's not reaching the intended person because it's, they moved five years ago. That's going to drag on your performance and we don't want that and you don't want that. So we spend a lot of time and, and, and energy like ensuring the, the accuracy of that data as well. And again that's, that's a lot of like what our AI is trained to help do as well. But yeah, we can match typically 70 to 80% of those email addresses to a current physical address. And it's a great way to test into acquisition with, with the channel because it's a warmer audience. They've engaged with you in some way before. They've gone through your welcome sequence already. You've been hitting them with email, they haven't responded. What is another touch point you can introduce to help get them off the fence and get them to convert? Direct mail tends to be really good for that. Especially these slightly longer, you know, purchase cycles, not non impulse type purchases. It's really effective for that. And again, you're still acquiring net new customers. Again, you guys have all done this really successfully. I've, I've seen the data on like abandoned carts and, and some of these folks that have gone through your abandoned cart or your welcome sequence in email and then not converted. We're generating significant incremental lift from those audiences getting you actually new customers.
- [71:07]
A
I was just looking at Hexclat at our account before this to like put some notes together and like our, I was looking at the abandoned card data and it's like, it's amazing. It's a great piece of creative. The, it's super incremental. The efficiency is insane. I actually didn't look, I don't know, are we, and you probably know maybe not. Are we actually excluding? So like if someone, I should know this, my retention lead definitely should know this. I didn't message him so maybe this will be a test for him. But in our abandonment flow, are we excluding people or hitting an email and abandonment or is it additive? Because you could do either though, right? Like not to put you on the spot.
- [71:41]
D
Typically if it's an abandoned car part, it's probably on a shorter time frame from when they signed up or last engaged. And you may, you may not want to exclude people who have been opening emails at that point because again they've gone through your sequence. They may have opened that sequence but the bigger point is they haven't purchased by the end of that sequence. Right. And so that's really the key. We want to give email a chance to work first. Like we, we'll be the first ones to say don't lead with, with the postcard, like lead with email because it's obviously way cheaper. So let email have a chance to work. And what we want to do is intervene when we see it's not having the intended effect. It's not making the customer recipient take the intended action. So again, they've gone through your abandoned cart sequence already. Then we trigger it after that's complete needed.
- [72:40]
A
So if you are a brand spending, you know, eight figures on media, you have a very diverse channel mix. You definitely do not want to be going into Q4 without pression. Pression AI is going to help you beat all your goals in this critical quarter. It's going to put you out of the competition. You know, BSM is coming fast and there's still a lot to do to finalize the Q4 strategy. There's a bunch of questions I find marketers asking themselves headed into Q4 and, and I, I think Preston can actually help solve and answer a lot of these questions. So I just wanted to run through a few of those. Question number one. If you're wondering should you increase, decrease or reallocate spend for the shopping season, Prussian shows you the optimal media mix to Drive the strongest Q4 performance whether your budget grows or shrinks. I think that's one of my favorite parts about Prussian. You can actually say, hey, I'm currently at spend levels X but I'm going to bring my spend to to Y in the next X number of days. Where should I put this budget impression is going to actually deliver recommendations based on your current BFCM dynamics, your vertical and your optim spend allocation. And then the next question becomes, can I adjust this in real time? You know, Hexclad moves budgets around a lot in Q4 and we really need to know, hey, where should we put that budget? So being able to do that, that spend, forecasting exercise and letting pressure know how much you're going to increase your budget and then they're giving you an optimal media mix just makes it really easy and straightforward to allocate your ad dollars efficiently. You might also be wondering and thinking I don't have time to onboard a new tool mid season, like how can I get mmm level of visibility? That's one of the best parts about Presch is it is super easy to onboard. They connect to your data sources in days and has your Shopify brand live in about 10 days. So you're getting granular, actionable results. Really fast. So Q4 it's make or break for Shopify brands and Prescient helps you make more than you're going to break. It give you full funnel visibility and campaign level insights. Not just showing where clicks convert, but all channels influence each other across Shopify, Amazon and retail. It is the only media mix modeling tool revealing halo effects on Amazon sales. So again gives you the super holistic look at your total distribution. And finally, Prescient helps marketing leaders make smarter decisions in real time with full funnel visibility and actual insights for the strongest Q4 you can possibly have. So if you're interested in checking out Prescient, go to preschen AI.com operators.
- [74:56]
D
I've.
- [74:57]
C
Got a I've got a question here so I I love the the guidance start with the retention loyalty, move up the funnel. I assume people can begin using it for acquisition, things like that. You bring up the point around sequencing, trying to lead with email, making sure direct mail is incremental. Agree with all of that that I'm curious if you have guidance for people experimenting with different size postcards. Like you have six by nines, I guess you have shared mailers, you've got 1624 page catalogs. How can that fit into a brand strategy?
- [75:24]
D
Yeah, great question Connor. So actually we just released a huge report that we've been compiling our data science team has been building for a while and it has incremental a ton of incremental data broken out by category, by strategy, retention, retargeting, acquisition as well as by size. And we actually saw a significant improvement between the 6x9, the larger format card and a 4x6. So that's like one of the tests that we might want to run. Again might be different for different audiences. Sometimes people who are less engaged or colder audiences might need a larger format card because you need to educate re educate them more about it. You need to show more product on it because they haven't been back to your site in a while versus a more recent customer that maybe only needs a 4x6 and since it's a little cheaper, maybe that's all you need because they just need the reminder or the nudge. So again this is why we really like to be able to do this testing and look at the data across these different cohorts cohorts RFM type cohorts create different creative might be a different cohort that we test and look at the data and use that to guide us in what is working and scaling and ability to scale just like you would in meta. Again you're testing a whole bunch of different variables, starting to scale with what's worked, learn what's working and scale it, move away from the stuff that's not. So to answer your question, yeah, We've seen the 6 by 9 outperform 4 by 6 in a lot of cases pieces. We've also seen things like our Cartalog format, that larger trifold type format that I know Jones Rhodes used a bunch and Hexclad's used a bunch. Sometimes it works better, right? Sometimes it actually doesn't. Sometimes the additional cost to send that larger piece doesn't. It usually has a slightly higher conversion rate, but that conversion rate isn't always enough to offset the difference in cost. So again, it's a really good thing to test and learn because maybe they just don't need that larger format and you can spend less and get a higher incremental roas by sending the smaller format. So it can vary a lot. And that's why we, that's why we want to test all that stuff.
- [77:44]
C
Totally. There's a number of really interesting dimensions to do it between audience, between different points in the, in the journey between card formats.
- [77:54]
D
Yeah. Cool to hear you talk through it. That's why we have our account management team that is really engaged with basically all of our brands and helps lead the strategy because we don't expect all the brands to know this stuff at all. And that was, you know, you brought it up earlier, Connor. What's, what did we learn along the way and what did we, you know, what makes us different and a lot of it is understanding having the expertise and the data to be able to guide and implement these strategies for the brands. Because again, we just don't expect brands to come in knowing what to do in this channel. It's a new channel for the large majority of folks that we work with and we want to set them up for success. We know that if they go and try and figure it out on their own and sort of fail or have lackluster results, they're not going to stick with the channel. So like we really invest, we really want to set you up for success so we take a really active position with our brands to be able to like do this for them. Everything from creative to setup and strategy to analysis, make sure that we're going to do things that we have high level of conviction are going to work versus let people sort of figure it out and, and lose money along the way.
- [79:10]
B
Totally.
- [79:12]
A
So I want to, I want to make sure we hit on the Acquisition piece because this is another, I think generally people are like I don't, I don't know why. Why? Well I guess I do know why. But people hear direct mail. They hear, they think loyalty, retention. But it's actually can be a really interesting discovery touch point. So can you speak to, to that as well? Like how, how do you do it? And then do you see any brands that it works better for than others? Because like hexclad, I mean we've done it, we've gotten some decent IRO as reads action on acquisition. But I would bet, bet that a lot of that value is not being captured in your guys tool simply, simply based on the product. Right? Like if we're really actually hitting someone for the very first time with a piece of direct mail, I'm not expecting them to scan a QR code and go by in 30 days. I want that person to visit the site and then get in our remarketing and then get into our email market and you know, get into the funnel. But like I'm assuming that you probably see a lot more value captured with like a, a $65 product that maybe doesn't require as much thinking and talking with your wife and like hey can we afford this type type conversation which like I think probably happens a lot with Hexclad, but yeah, can you speak to the acquisition side a little bit more?
- [80:26]
D
Yeah. So we can do prospecting again. We have those thousands of attributes on us consumers and we build lookalike models similar to how Meta would build the lookalike model. And it does, you know, it does work for a significant number of brands. Not every brand is going to be a great fit for it. We're in like tons of our time, energy, resources and capital are going towards constantly improving the data and the data modeling such that we can drive better and better performance for brands and ex and more and more brands become a better fit for the tool. But yeah it, it's, it actually does work well Typically for brands that are a bit larger and have a bit higher aov, some baseline level of brand awareness is helpful. So okay, get it so that it's not the very first touch point that that cut that person has ever had with the brand. It doesn't mean that you know, we still want to drive incremental performance on the acquisition side. But you know, just throwing out an example like an AG one is likely to have better performance than a brand new supplement brand that launched, you know, and is doing a million dollars in revenue and no one's ever Heard of because got it in the back of your mind, you've probably seen or heard AG1 somewhere. And that touch point is like, oh, you know, you guys know this better than anybody. Like it takes multiple touch points to get someone to buy. So by introducing this, we also have a lot of intent signals that we're leveraging to try and find people that are likely to be more in market for your product at a given time versus people that just look like your ideal customer. We, you know, we do want to try and drive direct response ROAS within sort of 30 or 60 days. Days. We do see a lot of latent attribution to your point where, you know, people aren't just getting the card and buying on day one. It sits on the counter and it's reminding them over days or weeks and we still see a significant amount of new acquisition and new order volume flowing in, you know, 30, 60 days into the campaign. And so, so again, look at it through a bit longer time horizon. Brands that have higher aov, the, the math pencils a little bit better again and I think you guys know this, it's pretty tough to be a 35 AOV product on Meta these days.
- [83:06]
A
Yeah, unless you're, unless you're driving another repeat order every single month. Unless you're groons, unless you're grooms, unless.
- [83:13]
C
You'Re a daily gummy total.
- [83:16]
D
But yes, not all of us are grooms. And so right, you do want to have a higher aov. It just makes it easier. You don't need as many conversions to make the math pencil out. You want to have a little bit of baseline awareness and you want to have a distinct audience. So if you're just selling, you know, potato chips, like who is your customer? It's not very distinct or well defined unless it's like a very, you know, keto friendly potato chips or something like that that we talked about expectant mothers being a great audience because that's such a distinct, well defined audience. So those are some of the characteristics that we see like more likely to be successful with prospecting. And, and we'll look at your data, we'll look at your profiles, your, your sort of metrics and other data and, and be honest with you, if we think that you're a likely candidate or not, again, we, we do not want to, to, we do not want brands to send something that we don't have a high level of conviction is actually going to work for them because then they're just going to get mad at us and we don't want that and we don't want that for you.
- [84:19]
A
Yep. So if, if someone's interested, if someone's listening and they're, they're interested in trying out post pilot for some direct mail campaigns, where should they, where should they go to kind of start that process?
- [84:31]
D
Yeah, go to postpilot.com they can, you know, sign up for a free account. We actually have a ton of free reports when you just create your account and sync up with Shopify. Things that Drew and I have found useful over our careers, like inter purchase latency reports, customer profile reports. Since we have all those attributes on your profile, it's sort of like the old Facebook insights report that everybody used to love that they took away. We just, you know, we have that data so we love, you know, just being able to share it and, and make, make it accessible to folks. So, yeah, you can do that. Start getting some data in that and talk with our team and we'll go over a strategy with you. We'll talk through what your goals are, look at your business and sort of guide you towards the strategies that we think are likely to be successful and a good sort of modest starting place. And I think now is actually a really good time because we're still a little ways out from Black Friday. It's coming up fast. So we want enough time ideally to be able to start testing into some of these campaigns and strategies before Black Friday hits. The thing that we, you know, it's. Direct mail is obviously a really good channel for Black Friday because people's inboxes are completely blowing up and CPMs rise because competition's driving up those costs. Direct mail is cuts through that and is fixed cost. But don't, don't try not to launch your first test for Black Friday. It's a mistake that we see tons of brands make because then, then they, they go with like a really small campaign as a test. They see it performed really well and they're like, well, I wish we had done more, but we can't because we've missed the window. So start now, learn, get some of the validation around what's working and what's not and then use Black Friday and sort of the hot peak holiday period to scale into what's working.
- [86:24]
A
Amazing. Anything else, Michael, that, that you want to leave the listeners with on post pilot before, before we wrap?
- [86:29]
D
Just, just appreciate you guys, appreciate all the, all the support you guys have have given us and really love working with you and just obviously been such a fan of all of you guys for so long. So it's really a privilege to be able to work with you and come on and talk about it.
- [86:45]
A
Yeah, of course. Likewise. We, we love, we love working with you. The team. The team loves working with post pilot. I can speak as a. Yeah. From a. From the brand side like the tax. Great. Great. The. The. The CS is great. Which it's what really what drives great outcomes for brand. So yeah, we appreciate you as well.
- [87:03]
C
And the team and fun episode, man. Thanks for coming on.
- [87:06]
D
Yeah, thank you.
- [87:11]
A
All right, that's a wrap on this episode of the Marketing Operators. That was our first ever episode on direct mail. That was really fun. I know. I have a list of notes that I want to go talk about with my team. I thought it was very, very actionable episode. Thanks to Michael for coming on and sponsoring a segment and just chatting through post pilot and how they can support your direct mail needs. Thank you to the rest of our sponsors. Motion Rich panel after Self Prescient and Revo. And lastly, if you're enjoying the show, make sure to like subscribe. Leave a comment if you have any questions, share it with your marketer friends. We're trying to get this show in the hands of as many marketers as possible. Thanks.