w/ Michael Epstein, PostPilot
Many e-commerce ventures hit a sales dry spell right after the holiday cheers fade. But what if Q1 could be more than just a slump?
In today's episode, we're turning conventional wisdom on its head, exploring how Q1's challenges can be flipped into profitable opportunities – welcome to the world of 'Q5'.
Our guest expert is Michael Epstein, a seasoned pro in the e-commerce arena with 25 years under his belt. As the strategic brain behind PostPilot, Michael's blend of SaaS savvy, agency acumen, and e-commerce expertise makes him the perfect navigator for today's deep dive.
Key Insights:
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Kurt (00:21.758)
In e-commerce, it feels like we're always just waiting for that Black Friday sales period to happen, the holidays, where making sales, moving orders, feels more like shooting fish in a barrel compared to other periods in the year, especially if you have a more seasonal business that Black Friday success and figure it out. How do we repeat that? But then we also want to know how do we avoid that post-holiday slump? If we think of Q1 as Q5, extend the success of Q4 into the next year and then just ride that and keep that going. That's what I want. That's what we all want. So how do we do it? To unpack it, to think through it, we're going to talk to a seasoned e-commerce veteran, a real pro here who's been around the block, been involved with e-commerce businesses, SaaS businesses, agencies, and has had several acquisitions under his belt. It's just a ton of experience, like 25 years experience. And we're gonna talk with him and figure this out together. And so joining us today is Michael Epstein from currently Postpilot, but in the past, a lot of other ventures. And I'm happy to have you with us. I'm your host Kurt Elster. Tech nasty. And this is the unofficial Shopify podcast.
Uh, I heard here you go by the Steen, the Steen Machine. What's the preferred pronunciation? It's certainly not Michael.
Michael (02:00.526)
Hahaha
Michael (02:05.265)
Uh, Sanocki always goes with Steen. He actually put out a newsletter not long ago for post-pilot where people had to respond Steen me for to get a, a lead, you know, like a lead magnet kind of thing, or like a, a white paper. And so thousands of emails came into like our customer success team saying Steen me and everyone's like, what the hell's going on?
Kurt (02:29.118)
And Sanocki, Drew Sanocki, he's been on the podcast before. He's your business partner, right?
Michael (02:35.237)
Yeah, long time business partner, co-founder of Postpilot.
Kurt (02:40.626)
And the... so how many... How long have you been doing this? And how many e-comm brands have we run here?
Michael (02:47.905)
Holy cow. Uh, yeah, I appreciate that kind intro that made me just remember exactly how old I am, um, uh, man, I started my first company in 2000, uh, before Shopify existed before Google existed, uh, and, um, sold that in 2013 to private equity and then got into this sort of private equity operating partner role where I was running, I don't know.
over the next handful of years, you know, close to a dozen eight, nine-figure e-commerce brands and
Kurt (03:25.258)
Like you said that with a shrug, like, that's no big deal.
Michael (03:29.55)
Yeah, I mean, in different capacities, whether we were hands on, like actual running, taking leadership positions at the company or as more of consultant or advisor for the fund. But had my hands in a bunch. Yeah, I've seen a bunch. Mostly turnarounds. That was kind of mine and Drew's calling card for a long time is like, take these big busted businesses and figure out what to do with them. So.
Kurt (03:52.874)
And the common thing that's wrong with them is that I have been witness to this. It seems like generally you look for businesses with an otherwise good idea and an audience and product market fit and all that and often just like unnecessarily outrageous operating expenses and then that's where you're like, all right, let's fix that first. And well, magically, this is a profitable business now.
Michael (04:18.201)
Yeah, totally. Yes, you have seen some of these firsthand because you are like on the bench, the Sanaki Steen bench of trusted people we bring in to help when we have a situation that needs good expertise, but yeah, I think that's always typically the first thing, you just got to right size these ships a bit and this is one of the last ones we did, this aftermarket automotive portfolio of e-commerce brands.
They had, you know, 300 and something people. I mean, it was a, it was $150 ish million company. So it wasn't small, but it was, you know, still 300 people to run an e-commerce business, 50 developers, something like that. Cause again, this is all pre Shopify stacks, right? So it's, it's legacy tech stacks. Totally, totally, totally. And so yeah, 50 developers.
Kurt (05:08.126)
Yeah, the solutions didn't exist. You had to build it, and then you had to maintain it.
Michael (05:17.041)
the dozen people in HR, you know, a lot of bloat, they were owned by a public company, so you can imagine the finance and the accounting departments where he got huge and yeah, so you just, you have to right size the ship to start, just get them into not completely bleeding. We took like, I don't know, six or $8 million in an OpEx out of that business in the first handful of months. And, um, and then you just have to work on.
turning it around and these are like big heavy ships to turn around for the most part so they are not easy but yeah we've seen a bunch of these things
Kurt (05:54.294)
So certainly you've got, you have the experience, you have a variety of perspectives. Today, what do you do? What is your primary focus?
Michael (06:06.213)
We are all in on post-pilot. Like that is, that is the, that is the big one. That is what gets us up and excited every day. And that's what we focus our energy and attention on. And it's, it's been great. We we've leveraged. It's like the culmination of these 20 plus years of experience of understanding deeply e-commerce, the e-commerce marketer mindset, the strategies, the tactics, the, the tools that, that these folks want and that work for them and.
It's really just culminated in how we built Postpilot, like how we think about capabilities, how we think about user experience, how we think about the service side of the business, how we think about strategy for that. So it's been great.
Kurt (06:48.151)
Now.
This is an odd question as someone who has invested personally in post-pilot. What is post-pilot?
Michael (06:55.993)
Yeah. You just wrote, you just, you just wrote the check. You're just like, yeah, whatever these guys are doing. Um, no, we were post pilots, a direct mail platform that plugs into Shopify, Klaviyo, sort of your e-comm tech stack and allows you to send individually personalized and triggered direct mail campaigns the same way you would send like email campaigns or automated flows in Klaviyo.
So you segment your customers. You can send a one-off personalized campaign to the people in that segment. Think like an email newsletter of a sale announcement or a new product launch or something like that. But then you can also send triggered flows. Think Klaviyo Automation. So a win back campaign, an abandoned cart campaign, a cross-sell campaign, a VIP campaign, all the sort of core flows that you would trigger in email you can do through direct mail as well.
Kurt (07:49.39)
And from your position, you're interacting with all these e-commerce brands as customers and clients, but also within your network and given your past experience and all the things you've been involved in. Let's talk trends and observations through the eyes of the Steen machine. What are some of the e-comm trends you've noticed this year?
Michael (08:10.473)
Hahaha
Well, I think it's generally been a, it's been a challenging year, but it's been, it ended on a high note, which we're really pleased about because you just, I think everybody was sort of holding their breath a little bit heading into Black Friday. Cause you know, it could have gone a bunch of different ways with the macroeconomic environment with just a number of different things going on geopolitically and everything else in the world. It's like, how's this going to play out? And so.
I think it's been a challenging year of people continuing to make this push for profitability over growth. So that was a big transition that a lot of brands had to make. It still hasn't gotten necessarily a lot easier on the customer acquisition side of things from a, you know, just cost like CAC perspective, but people have really worked on improving their operation, getting more profitable, maintaining. A lot of brands we have seen.
able to maintain, you know, either staying flat and in a lot of cases, still continued strong growth year over year, which has been great to see. And then I think overall in Q4, it was a very strong November for brands. We saw across, you know, tens of billions of dollars in GMB that we see 28% growth over the Black Friday period, which is pretty consistent with what I think Shopify was reporting in their numbers. And
And we're seeing continued sort of strength coming out of Black Friday into December as well.
Kurt (09:46.238)
Yeah, December, it's been a weird year, and certainly, you know, some industries affected differently than others. But I would say the mood is cautious optimism, right? People continue to plow forward, but want, you know, are more conscious of profitability of ROI, of return on ad spend, you know, of all these metrics that will lead to a healthy business. You know, a little less shooting from the hip. But otherwise, you know, still investing.
Michael (09:57.129)
Agreed.
Kurt (10:16.266)
still spending. And all our economic indicators, especially in Q4, very strong. And yet at the same time, a third of Americans say they lose sleep worrying about inflation. So a lot of our issue now becomes consumer confidence, as opposed to just the markets are strong, GDP is strong, unemployment is low, et cetera.
Well, as we've moved into Q4 and we saw that strong Black Friday, how did people's, how did Econ Brand strategies shift from earlier in the year to during Black Friday this year?
Michael (11:03.369)
Um, I mean, I think people were concerned a bit in October because I think people are continuing to realize that they're, they're shifting demand into Black Friday, uh, from, from other periods. So I think people were sort of, I think people were operating generally well throughout the year. Again, focus on.
first order profitability or just profitability in general. There was just that trepidation, I think as we sort of got into late December and into October as people started to pull back a little bit, but then it was all, you know, just, everybody was just totally heads down executing on Black Friday. And, you know, you saw, I mean, we just saw consistently people, you know, the types of promotions that they were running,
just the level of awareness that they were generating for their brands and their Black Friday campaigns were just, people went heavy on it and I think it paid off.
Kurt (12:10.002)
In any particular promotions, campaigns that were typical and successful that you noticed. Like for me, tying everything to some kind of minimum average order value. So tiered discounts or like free gift with purchase over X amount. Those have been my favorites.
Michael (12:29.385)
Yeah, free. I love free gift with purchase because it's obviously the higher perceived value and at a lower actual cost versus giving a blanket percent off or dollar off. A certain amount. So we love those. Those were used effectively. We saw the other thing that we've seen be really effective is like exclusive product drops over that period that actually aren't even discounted at all because a lot of the promotional messaging
is in an effort to just capture attention and cut through like the clutter and get people's attention over Black Friday to get them over to your site to browse and buy. In some cases, we saw brands just doing like these really cool exclusive product drops, whether it was, you know, this new makeup kit or a new an exclusive color of a particular product or just a new product drop. And that was doing a really effective job at getting people's attention.
and getting them to come and buy and again, often at full price.
Kurt (13:31.946)
And during, you said, earlier you said people started to realize, hey, when you're not running sales earlier, you know, in September, October, early November, and then waiting to Black Friday, you may see, you're essentially setting yourself up to have a soft October, but then a strong November, because the sales end up being deferred. So if I want to take action on that,
It seems like running the early bird Black Friday sale is the solution.
Michael (14:04.585)
Yeah, I just, I'm curious. You would think so. I'm, I'm curious how that actually starts to play out. Cause like everybody's moving their sales up earlier and earlier. Cause everyone's trying to capture that wallet share, uh, before it goes somewhere else, but I'm just curious, like we've trained customers so much to wait for black Friday, are they still thinking, even if I see a discount in October, should I just wait it out and I'm going to get a bigger one later? I don't know. It's a good question, but I think a lot of people are thinking about it. Yeah, totally.
Kurt (14:31.818)
That's what I did. I was like early sales. I'm like, you know what? I don't trust it. I know that potentially I think the biggest best discount they're going to save for me on Black Friday. And so that's, I'm going to wait and see what happens then. And unfortunately for me, I did not. My current 65 inch TV is stained with smoke because I'm a genius. We forgot to open the fireplace flue.
Michael (14:44.681)
I agree.
Michael (14:58.921)
Oh.
Kurt (14:59.098)
So I really want to replace this bad boy with an OLED. Turns out those are really expensive. I was hoping for a good Black Friday deal. Didn't see one quite hot enough for me to grab. Plus I'm just gonna ruin it with my fireplace again. So, after that Black Friday rush, the holiday rush, anything we should be doing during December.
Michael (15:01.929)
Mm-hmm.
Michael (15:08.297)
Those things always seem to pop up.
Michael (15:24.617)
Yeah, I think a couple of things people don't realize. One is if you look at the total volume in December and often, often cases, it's going to meet or exceed what you're doing over that sort of cyber five period. If you, if you play your cards well. Um, so don't add, you know, don't let up, don't let off the gas as soon as cyber Monday is, is sort of over. Um, we're seeing a lot of brands continue to push on.
post Black Friday, whether it's clearance sales or just an extension of Black Friday promotions, things like that. I think that's one thing. Two, I think another thing that brands often don't think about enough is their retention flows for the customers that are acquired over Black Friday and cyber that sort of Black Friday period where you just got over.
make sure that that second purchase campaign is super dialed in. Cause that's where your, your, your profitability is coming from, right? Like these are customers that you've acquired typically at your highest discount of the year. So your lowest margin period of the year. And the profit, the, the, the big source of profit for those customers is going to come in that second purchase where you're not paying to reacquire them. And potentially you're getting that second purchase at a lower or even no discount compared to the first purchase.
So again, it's not too late for brands to just go in and make sure that those second purchase campaigns are super dialed in across multiple channels. Not just email, not just SMS, direct mail, obviously I'm going to advocate for, because it's a great way to get to those folks that aren't actively engaging with your email or SMS campaigns, but whatever you do, just make sure that you have these personalized.
really well targeted and relevant second purchase campaigns set up for those customers that you acquired over Black Friday. Maybe it's something special that you do for them because you knew that they were acquired during a particularly heavy promotional period versus what you might already be doing for second purchase or win back campaigns. But squeeze those customers for that second purchase. And once you get that second purchase, not only are you getting more profitability out of those customers, but subsequent purchases actually become easier over time.
Michael (17:50.665)
with every subsequent purchase a customer makes, it tends to increase the likelihood that they're gonna make another purchase from you. Essentially, they become more loyal to your brand the more times they buy from you. So that's a big one too.
Kurt (18:03.178)
Interesting. So worthwhile to figure out targeted campaigns to segment those people and try and bring them back for that second purchase with A, it's more profitable because we've already acquired them and then B, in the hope that customer lifetime value goes even beyond that to a third, fourth purchase.
Michael (18:24.137)
Yeah, that's exactly right.
Kurt (18:26.526)
And you talked about, I've heard you mention email, SMS, direct mail, certainly Facebook ads, PPC ads are implied in there. That is what other channels are we seeing success with?
Michael (18:44.969)
I think in general brands are just waking up to going more on the channel in general. So just like, I think a big trend this year as well has also been the move into retail for a lot of these traditional direct to consumer brands who were exclusive direct to consumer through their, their website, they're continuing to push into retail as another point of distribution to meet their customers where they are.
whether that's in Target or whether it's in a GNC or whether it's in a Kroger's or whatever it is, same thing starting to become more prevalent in their marketing mix. So people are testing, obviously we've seen a ton of growth in the direct mail channel as people are recognizing that they're just not reaching all of their audience, their prospects and their customers through digital or people are just ignoring those channels. How else can I get in front of them and connect with them?
Uh, and, and direct mail is obviously one way to do it, but we're seeing brands continue to experiment with billboards on trucks with TV ads, all these kinds of things where again, it's just meeting their audience and their customers, where they are creating multiple touch points and touch points that potentially are going to resonate with and be more memorable than, you know, scrolling through a digital ad on like Facebook.
Kurt (20:07.678)
Right. It's, and if you can get them with that combo, where we have multiple impressions across different surfaces, then things start to become more memorable, right? If I see it, I saw it on my phone, I saw it on a billboard, and I saw it on a TV ad, because streaming ads are really quite reasonable. And cord cutters, people without cable TV, are now the majority. And so I would imagine...
you're really not losing audience share, you know, too terribly, switching to those TV streaming ads. And so, you know, combining them all, if you get lucky, you get that one person who saw all those placements, you know, and a newsletter and a postcard. It's like, well, it really be... It ensures that you are top of mind. So having all that, and then, you know, whether they order direct from you or go to a marketplace or just see it on the shelf in Target and buy.
Michael (20:41.705)
Totally.
Kurt (21:05.484)
Hey, they're buying from you no matter what. So, take the win.
Michael (21:08.329)
That's exactly right. And I think a lot of brands are moving to this more of like the M E R look at their ad spend relative instead of. You know, precise ROAS or CAC at an individual channel level, because of exactly the point that you're making. It's like at some point, and especially as brands start to hit scale, you know, once you go beyond being able to just.
You've tapped out that like narrow Facebook audience that you've been able to, to, to acquire at a very low cost. Like that doesn't scale forever. And you've got to start looking at how to continue to grow. And a lot of these brands are thinking about getting out into multiple channels and thinking about it more as an M.E.R. on an M.E.R. basis of like, what's my sort of total marketing spend and are we seeing my customer.
My acquisition count continued to increase. We're seeing our total revenue increase and use it as more directional signals.
Kurt (22:03.874)
that M.E.R. media efficiency ratio. Just rolls off the tongue. But yeah, looking at, you know, what is our revenue? What is our marketing spend? We could figure out if this math works or not as a ratio. And you know, that way you're looking at everything holistically as opposed to like slicing it too thin. And then, you know, getting hyper-focused on one channel as opposed to the entire funnel working in a delightful way.
Michael (22:08.649)
Yes.
Michael (22:33.545)
Exactly.
Kurt (22:33.866)
And so we've.
So after that holiday rush, maybe we've got all these different marketing channels. We've got this omni-channel approach. We're making our product available in multiple places. We're setting, if we have all these things in place, and now we're moving into Q1, which some marketers call this Q5, referring to that post-holiday period, we want to segment our new customers.
that we acquired over the previous six weeks. Get their attention, see if we can make that second purchase. Are there other strategies we should be adopting to maintain momentum?
Michael (23:17.801)
Totally. So you, you bring up a great point about Q5. Essentially it's, it's like a second Christmas or a second Black Friday for brands, particularly in like the health and wellness space, uh, cosmetics are big there, even apparel, anything that's like self-improvement related, like new year, new you is the, is the phrase that you hear all the time. It's like the new year's resolution type thing or self-improvement type product categories.
are so big in January. We see this all the time. We see this across a ton of brands. They just blow up in Q1 in January specifically. And what we see, it's both from an acquisition perspective, but what we also see a ton of in that Q5 period is reactivation of very highly defected customers. And by that, I mean,
people that have bought with you in the past, but may not have bought from you in six months, a year, two years, three years. Like this is the time to wake those people up. And it just sort of, it's, the timing is just right and right for you to get, if you're a supplement brand, if you're a healthy food brand, if you're again, like an apparel brand that once, that has a new,
you know, new seasonal line that you want to get in front of somebody. It's time for them to update their wardrobe. Anything that sort of is this improvement type product category. You can wake these long defected customers up or in this, uh, in January and in this Q5 period. And again, it's like, it's a cheaper way to, you're essentially reacquiring them at this point. Cause somebody hasn't bought from you in a year or two years. Like they are long gone.
But it's a much cheaper way to essentially acquire that customer again, than going out and doing it cold, because you can use your own channels to reach those people. Again, email, SMS, direct mail, gonna not, you know, I have to advocate a little bit for it, but the reality is if they've been on your email list for two years and not bought from you, like that's not the channel that they're engaging with. So you need to find other ways to reach them, but using own channels to reach them versus...
Michael (25:37.705)
having to go out and sort of reacquire cold prospects is still gonna be way cheaper for you.
Kurt (25:43.983)
and you know
We're in the digital age, right? The years, it's 2023, 2024. We're post-COVID, our TVs are flat, we have computers in our pockets, cars are electric, 3D printers are plentiful, et cetera. What possessed you to go, you know what? I'm gonna start a business that prints ads on dead tree slices, and then we're gonna mail that physically to people's houses.
Michael (26:11.625)
Hahaha
Kurt (26:17.11)
That's direct mail. What sparked you to focus on direct mail?
Michael (26:22.697)
It's a good question. So we've used direct mail successfully in our careers. Like we knew it worked. It's, it's a proven channel and a proven category. It's worked forever. I mean, people aren't still sending catalogs because they don't work. And it's, it's been a proven large channel for a long period of time. But what we were seeing is that obviously the mailbox was becoming less and less full. But the email inbox was obviously becoming more and more full. And the thesis was essentially.
digital ads and email is only going to get more competitive and expensive over time and cluttered over time. The mailbox has been getting less cluttered and less expensive on a relative basis over time because as digital ad prices go up, the price of postage stays fixed. And essentially it literally takes an act of Congress to change the price of postage. So on a relative basis, it's becoming less and less expensive to digital. And then it was like,
Okay, if we're going to do this, somebody needs to, it needs to be reinvented as a channel, like for the modern sort of digital marketer. And so the theory was we want to build Klaviyo for direct mail. And that was really what started Postpilot.
Kurt (27:38.198)
You know that tagline alone is what sold me. I was like alright just take my money. So the.
Well, when we say direct mail, what is the physical media we're sending here? Mail takes many forms.
Michael (27:54.985)
Yeah, so it's primarily postcards. So individually personalized postcards where we can trigger it that says, okay, Kurt, you bought a 60 day supply of supplements. If you don't come back by day 65 and you haven't responded to our email, we're worried that you're not gonna come back. We need to trigger a card on day 65. It's like, hey Kurt, it's time for a refill. Don't lose out on all the benefits. And here's 10% off if you come back now.
So that's the primary form factor that our brands use. But we also introduced what we call the Cartalog, which is like a large folded piece that is like a mini catalog. And brands historically have found a lot of success with catalogs because you can highly target that audience. You can present a large assortment of your products to them.
You can have enough pages to educate them on your brand, present your products in sort of this lifestyle presentation. It works really well, but the problem with catalogs was you typically, they take six months plus to produce and print. You have to run a hundred thousand of them or more. They're really expensive. You can't change them up. If the product on your cover goes out of stock the day before, they're supposed to go out.
And you can't split test, you can't track them, like all these things. So we work to solve all that with what we call the catalog. There's no minimum, there's no lead time. We could have it designed and out for you in like a few days, split test. You get kind of all the benefits of a catalog without sort of all the downside. So again, just trying to make it really easy and more familiar to a digital marketer and like what they're used to. They're not used to like.
planning and add out six months in advance and then waiting, you know, another three months to get a spreadsheet of results on how it did.
Kurt (29:55.158)
So at our house when we get these direct mail campaigns, the ones I've noticed that show up pretty consistently as far as category goes is fashion and apparel. And there's just like several women's underwear brands that sends these direct mail pieces, these cards to my wife. And then the other neat thing about it, if you sign up for USPS informed delivery digest, this is where for free US Postal Service.
scans your mail and you get the exterior not the interior and you get an email every morning with like alright Here's what's coming today. And so you end up in theory you end up seeing the card twice like first. I've got it I scan through my mail in My email and then I have to go get it out of the mailbox in the evening when I come home to get
Michael (30:31.433)
Yeah.
Michael (30:42.921)
Yeah, that's exactly right. It's cool. It's another, yeah, you're, you're exactly right. It's a free extra touch point for that. For the folks that are signed up for informed delivery. We used it a ton over, uh, my wife would like wait for that over the summer. When my kids were away at summer camp, like, are we getting a letter today? Are we getting a letter today? But yeah, it's a cool extra touch point.
Kurt (31:04.01)
And so this is just one additional thing you're doing with all our other channels combined. You're not saying like, all right, you're going to dump everything and only do direct mail. So what's the balance here? You know, how do you determine a how do you set a budget for direct mail?
Michael (31:20.521)
Yeah, it's a great question. So typically the idea is to focus on those audiences that you know, or. Not actively engaging with email. If you can convert them off an email, like fine, do it. We're not advocating, as you said, to, to abandon those other channels, but. If they go through, say your email welcome sequence and they don't convert by the end of your email welcome sequence, we can trigger it, we can, this is actually for a prospect, somebody that hasn't bought from you, we can.
Uh, we can match that email address to a postal address and then target them with a card, even if they've never bought from you. But the point is. Yep. Yeah. So we can do that for email addresses. We can do that for anonymous website visitors, same sort of thing. Like give them a chance. If they don't convert, they, they opt in, they go through your welcome sequence, they don't convert trigger a card at the end after that welcome sequence is completed to try and get them to convert, cause obviously they haven't engaged with those other channels.
Kurt (31:56.798)
Oh, so you could do customer identity resolution? That's pretty sweet.
Michael (32:19.113)
If it's a win back sequence, again, they've been on your list. You know, if they haven't come back within 90 days or something like that. And we have reporting in the platform that you can look at to say when, how long does it typically take for your customers to come back and make subsequent purchases if they get to a point where there's only a 10 or 15% chance of them ever coming back, say after 90 days, you got to trigger something.
at that point where they have not responded to your other attempts to get them back. And we see remarkably strong results when you do that.
Kurt (32:54.51)
the set my expectations. What is it? This is going to be so broad, but what is a typical ROI of a successful campaign?
Michael (33:04.585)
Yeah, it's a common question and a good question. If I had to sort of give a rough range, obviously it's always going to depend on the offer, the audience targeting and the product. But, um, if I gave sort of. Tried to set some rough expectations, five to 10 X row asks on a retention campaign is very common and often a lot higher. We also, you also want to think about it, not just in terms of, uh, you know, what's the, uh, what's the highest row ass I can get.
It's more like how large of an audience can I get to and still be profitable. So what I mean by that is sure, maybe you're getting a five or 10 X row ass on customers that haven't bought in six months, which is great. But what if I could get a three X row ass on customers that haven't bought in three years? I'd still take that. Like that's still a big win because it's profitable for most brands, assuming you have decent margin. And if I can get that on somebody I haven't seen in three years, that's still great. So.
The idea is expand your targeting such that you're, and we break all this up in the app into different cohorts based on recency, frequency and other variables. You can say, I know I can still get a three X of two years, but once I go to two and a half years, I get a one and a half X. So I don't wanna send to that audience anymore. So we're tracking all that in the app. And then on retention, so I mentioned.
are tech that allows you to send to email subscribers or website visitors. Typically brands are looking in like the two to five X ROAS range for those types of campaigns and for cold acquisition, where we do like lookalike modeling off your first party data, uh, and do cold prospecting similar like Facebook lookalike audiences. Most brands there are typically, uh, comfortable in like the one X range. Um, it's not to say it doesn't go.
Kurt (34:49.238)
That's awesome.
Michael (34:57.769)
We've seen brands get 4X on cold acquisition campaigns, but you shouldn't go in with the expectation that you're gonna get three, four X on cold acquisition. Typically, it's brands that know, okay, if I can acquire a customer around a 1X or a little bit higher, I know that the LTV or the 180-day LTV to cap is good enough in my brand that...
that's going to be profitable because we know we're going to get subsequent orders out of them. And I just know I want to acquire a customer at this cost. The one other thing just on the prospecting side is similar to think about it, similar to Facebook. Like you want to hire AOV product. You want something that's sort of been a you found some level of product market fit. Those are going to be better candidates for cold prospecting. But on the retention side, the retargeting side.
There's a lot of easy wins, like a lot of low hanging fruit for almost every brand that we see.
Kurt (35:58.406)
So what's the winning formula? You've sent a lot of these campaigns out. What's a good one look like versus a soggy one that doesn't land well?
Michael (36:08.521)
Yeah, good question. Um, I think timing wise, it's gotta be good. There's, you know, again, we want to test into a variety of these different cohorts so we can track exactly how each of these different audiences perform. And get good data points to say like this one, we know we can continue to send to this audience and it's going to crush, we know that once we go to the certain point, it's not going to do so well it's brands that like.
You got to be willing to test into a few of these things to get enough data points to understand, again, what's going to work really well for your brand, what might not. If you want to test one small thing, like that's not great. Just like you wouldn't go to Facebook and say, I'm going to test one creative to one audience. And if it doesn't kill it, I guess Facebook just doesn't work for my brand. Like that's not the mentality that you want. And then from like a creative and offer standpoint, it should be...
something that's very, again, if you think about it in Facebook terms, it's like, you're scrolling, you need to get, you need to capture somebody's attention in a split second, it needs to be very recognizable. So same thing with a postcard. If you're flipping through your mail, you want it to be easily recognizable, well-branded, succinct copy, like pop creative that pops. We do all this for you. We have our, our design team designs like 99% of the campaigns that go out. So we know sort of what works, but just as.
best practices to keep in mind, like you should be thinking about that. And typically an offer, particularly if it's a win back campaign, an offer that's commensurate with what you were running in other channels. So if you were already offering them 20% off an email and they didn't bite on it, don't go, don't offer them 10%. If you send them a postcard after you've emailed them that 20%, uh, stay with at least sort of what you've been.
what you've been offering them through other channels.
Kurt (38:05.626)
And you mentioned that you could do personalization here. What kind, what level of personalization is possible? Just because you put my name and address on there does not count as personalization, buddy.
Michael (38:16.585)
Yeah. I, so you can do, we can actually create dynamic text on the card that like greets you by name that's like literally like, Hey Kurt, it's been a while kind of thing that's like the most popular. Just using someone's name in that, in like a visual form like that, not the address line, but like actually baked into the design itself gets people's attention really well, we see stronger results when we use that level of personalization.
And then you can personalize like the offer or the creative that they're getting. So for example, we'll see churn reactivation campaigns for a lot of brands and you know, say it's a, it's a healthy food brand and someone churned and the reason they churned was they had too much, but somebody else churned. And the reason they gave was they didn't like the taste. We might send different, different offers and different creative to those customers.
And if they don't, if they had too much, it's like, okay, well, uh, you know, you can pause it anytime. Like you can skip a, you can skip a subscription, like overcome the objection objections that they might have. If they didn't like the taste, it might be, we want to show you these, we want to incentivize you to try these other flavors of product that we have.
So those are other types of personalization. And then we're working on even more dynamic things that you can add into the card, like individual product, like swapping individual products dynamically. But for the most part, the creative variants and just sort of some custom copy on the card itself, different attributes or name or other things like that tend to work really well.
Kurt (39:49.857)
really cool.
Kurt (40:03.046)
It's like any other marketing. It needs to be relevant. And so your examples of personalization are like, are given what we know, how relevant can we make this to the person so that they don't pick it up, go, oh, I remember those guys and then if you're like me, you go from mailbox garage to directly into the recycling bin doesn't even get to the house. But I saw it. I saw it twice. I had to handle it. It's still more touch points than, you know, me swiping on and deleting an email.
Michael (40:24.041)
Exactly.
Michael (40:30.889)
Exactly, exactly.
Kurt (40:33.846)
If I'm Cost benefit analysis like if I'm a business owner. How am I determining? Would you have any advice for someone who's like trying to figure out is this worth it?
Michael (40:45.641)
Yeah, I think the best fits for us are typically brands that have a few million dollars in annual sales or more. Um, you know, we work with brands, eight, nine, 10 figure brands. Uh, but you know, at a minimum, you want to have at least a big enough customer base that you can create these different segments that are to your point, really relevant and targeted.
If you only have a few hundred thousand dollars in sales, not to take anything away from you, but from a channel perspective, you should one, focus your energy and attention on fewer things. That's like my honest advice to brands like.
Focus on growing, like there's still, you haven't hit a lot of scale yet. So like focus on just concentrating your efforts around fewer things to grow and then start expanding your marketing mix and channels when you have hit a little higher level of scale. And that's just advice I would give anybody. But from a practical standpoint, again, it makes it hard to segment those customers in a way that's gonna be super relevant and also super material to your business because
If we create a segment of those customers and there's like 50 people in it. It's like, okay. To your point, Kurt cost benefit, like, should I spend the time doing it? If I, you know, my audience has 50 people in it, like that's just not going to move the needle in a meaningful way for your business. So that's like kind of one of the main things that we advise brands on is like. Get to a certain level of scale. And then it makes a ton of sense for you to start.
diversifying your channels and adding this as another channel to your mix.
Kurt (42:40.286)
It's so helpful to hear it and to hear someone say like hey until you're at this level just focus on something else you know you don't want to spread your attention too thin as We're we're coming to the end of our time together any exciting future plans features projects for post pilot you want to share with us?
Michael (43:00.137)
Oh man, we've got a super exciting roadmap, but I think one of the biggest things that we've, we've done recently is, um, is site match, which I mentioned is the website visitor retargeting where we can identify people who are browsing your website anonymously, typically about 20 to 40% of those people and target them with a card. Uh, so they haven't opted into your list. Um, prospecting again, like starting to get more into acquisition audiences and building look-alikes off your first party data.
Kurt (43:20.002)
pretty sweet.
Michael (43:29.449)
and the cartologs are some of our biggest and more recent feature releases, but we've got some, definitely some exciting stuff planned for next year as well. So we'll be talking about that hopefully in Q1.
Kurt (43:46.978)
Cool. No, I look forward to it. If someone wanted to learn more about you or Postpilot, where do they go? What do they do?
Michael (43:53.897)
Michael at Postpilot, email me anytime. I love talking to brands and entrepreneurs and find me on LinkedIn, find me on Twitter. Go to postpilot.com.
Kurt (44:07.09)
Absolutely, the Mr.. Epstein, thank you so much. This would be great
Michael (44:13.129)
Kurt, I always love being with you. You're like one of my favorite people in e-commerce.
Kurt (44:18.114)
That's quite the compliment. I'm gonna dine out on that the rest of the day. And I'm texting your business partner. I'll be like, oh, you know what? He said, I'm his favorite.
Michael (44:23.177)
Hahaha.
Michael (44:27.401)
Totally. Make him jealous.
Kurt (44:31.61)
I that wasn't a joke. I will be doing that maybe I'll be like take the clamp like I got proof. I brought receipts All right, we'll end it there Michael. Thank you so much
Michael (44:33.833)
Yeah.
Michael (44:41.673)
Thanks, Kurt.