Marketing Podcast for Shopify Merchants: The Ecommerce Coffee Break

New Marketing Strategy for Shopify (Direct Mail) | #190 Michael Epstein

May 24, 2023 Claus Lauter: Ecommerce Podcast Host | Shopify Partner | Marketing Optimizer Season 4 Episode 53
Marketing Podcast for Shopify Merchants: The Ecommerce Coffee Break
New Marketing Strategy for Shopify (Direct Mail) | #190 Michael Epstein
Show Notes Transcript

This episode of the Ecommerce Coffee Break Podcast features a conversation with Michael Epstein, Co-CEO and CMO of We discuss how direct mail is making a comeback and why you should use it as a marketing strategy to boost your sales.

On the Show Today You’ll Learn:

  • The marketing channel with a response rate 28 times higher than any other channel
  • Understanding Direct Mail: Formats and Delivery
  • Effective marketing promotions and strategies for Direct Mail
  • Designing a successful postcard campaign
  • The value of hand-written postcards

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Claus Lauter: Hello, welcome to another episode of the E-Commerce Coffee Break podcast. What would happen if I tell you that there is a marketing channel that can give you 28 times higher response rate than email or marketing channels? Like paid advertising? There is one. That's what we're talking about today.

So you might be curious now what it is, and actually if you are long enough around on this planet, you have heard about it. With me on the show, I have Michael Epstein. He is the co-founder, the Co CEO and CMO of, and we discuss how direct mail is making a comeback. Michael has. Help direct the customer brands.

Restart, growth and scale customer acquisition and retention at post pilot while serving as a CMO of auto anything previously, Michael, let Turnaround Growth and Successful exit in November, 2021 for 200 million p e owned portfolio of online aftermarket automotive. Retailers, his first e-commerce experience involve bootstrapping a consumer electronics manufacturer and e-commerce retailer to eight figures in successful exit.

So Michael definitely knows what he's talking about and I'd like to welcome to the show. Hi Michael. How are you today? 

Michael Epstein: Good to be with you. 

Claus Lauter: we're talking about direct mail, so that sounds really old-fashioned, but actually it's really, really good. I have used it in my own business, in other businesses with huge success.

And we wanna dive a little bit deeper into that. So tell me a little bit of what brought you from e-Commerce into the old-fashioned direct 

Michael Epstein: mail. Sure. So I've used direct mail successfully, probably similar to you at a number of the portfolio companies, the e-commerce portfolio companies I've run as a private equity operator for over 20 years.

But it was the stereotypical clunky experience. Think spreadsheets going back and forth and finding a print house and spraying, praying to a bunch of people in a zip code or something like that. And then more spreadsheets to try and figure out tracking. Basically, myself and , my business partner and co-founder said Somebody needs to create clavio for direct mail.

And that was really the thesis , and genesis of the company. So we set out to create a platform that was really more familiar, And relatable to native digital marketer and could execute direct mail as a channel, more like email, like your email program. So I think segmentation, targeted sends using segmentation the same way you would with Clavio or your E S P Automa triggered automation.

So think. Know, win back campaigns and abandoned carts and things like that, that are individually personalized and triggered just like an email campaign. that was really the starting point for co-pilot. 

Claus Lauter: Okay. Let's take a step back because Generation Z, might not even be aware of what direct mail actually is.

Give me a bit of an idea of what is the format and how does it get delivered? 

Michael Epstein: Sure. you might be familiar with this thing called a mailbox. You actually walk over to it and you take physical mail out of it. That's what we're talking about. So actual physical postcards and direct mail pieces that get mailed to your house.

I understand 

Claus Lauter: that post pilot, as you said, CLA view for e-commerce or for direct mail, is the idea behind that. Now, what marketing promotions or strategies would you put into direct mail? 

Michael Epstein: Sure. We really offer the full funnel, but we actually encourage brands to start lower in the funnel as opposed to historically, if brands we're starting to explore direct mail, most of these large, traditional printers or print houses were telling you, oh yeah, let's just.

Blast it to everybody who has this household income in this zip code. Like we do not advocate for that at all. But they didn't even have really the capabilities to do the type of segmentation and targeting and automation that we do today. We encourage brands to start with, like the low-hanging fruit.

They're easy wins around retention and retargeting where you're able to reach. This segment of customers and prospects that really aren't engaging with email or your digital ads, like they just become immune to it. They're not responding or opening your email campaigns, like how else do you reach them?

And again, that was like one of the. The big reasons we started post pilot was we built all these great lifecycle campaigns in email. We're like, oh, the targeting's so great. The messaging is so great. And then we'd look at the open rates and it's like 25%. We're like, we're leaving all this money on the table cuz we're just not reaching these folks.

How else can you reach them? And you can do that direct mail. So start there. Start with, again, like your core email automations. Clone them to direct mail, win back campaigns, abandoned carts, second purchase campaigns, reactivation, things like that. Then work your way up into retargeting type campaigns.

So we have the ability to take your email subscribers who never place an order with you so you don't have their physical address. We can match that to a physical address, retarget that person with a postcard if they've never converted. We just released a new feature called Site Match, or we can do that for website visitors who haven't opted in or placed an order on your site.

We can identify who that person is and retarget them, and then you work your way up to the colder acquisition type campaign. So think lookalike prospecting or targeting based on really, really precise attributes about your customers. But again, start lowering the funnel. Develop that baseline, see, get the easy wins, and then work your way up from there.

Claus Lauter: really going deep into the funnel, , that's a very new aspect, which I haven't heard before. And obviously you have the factor of surprise there because people do not really think that they will get a physical, letter or postcard from a e-commerce store. Now, when it comes to putting this into place now, sending an email costs pretty much next to nothing, sending out a postcard probably costs a little bit more.

Give me a bit of an idea how that works. 

Michael Epstein: Yeah, absolutely. So postcard is gonna cost more than email. We're not recommending that you stop sending emails, but typically our brands are using it for folks that aren't actively engaging with your email campaigns or other digital channels.

So you can trigger it. These campaigns, for example, you have a five day abandoned carts email sequence. If that customer goes through your sequence doesn't convert on day by day. Five on day five, trigger a card that's like, Klaus, we saw you looking like, come back , and make this purchase. We'll take 10% off your cart.

Same with a Winback campaign. We've been emailing you for the last 60 days. You haven't come back on day 65, trigger that campaign. That's like, it's time to come back and repurchase. It's time for a refill. Come back now and here's an incentive to come back now. That's typically how we recommend like getting started with those types of campaigns.


Claus Lauter: Now in email marketing, obviously you can track all the KPIs, opening grades, click grades, and all of that. , with physical postcards might be a little bit more difficult, but I think there might be also a way to figure out is, what's the next action? Did someone come back? Is this a feature that you haven't, 

Michael Epstein: implemented?

Yeah, absolutely. The card start at 49 cents. it's less than generally the cost of a click. And again, not replacing your email, but it's another way to reach people and it actually can improve the efficacy of your other channels when you hit them across when you have customers that, that get hit with multiple touchpoints.

And then in terms of tracking performance, we're natively integrated with your e-com tech stack. So we're natively integrated with Shopify Clavio and a bunch of other e-com apps. And by integrating directly with Clavio, we know when that customer was sent a card, we know when they received it. We know if they go on to make a subsequent purchase.

We know if they use a coupon code on the card. We'll show that to you in a real time dashboard. So there's no spreadsheets or trying to figure this stuff out manually, like you're seeing it in a dashboard just like you would with any other sort of digital marketing channel. 

Claus Lauter: Okay. Now at Post Pilot, obviously you have tons of clients using this system already.

What is the sort of best practices, that you see that versions use when it comes to look and feel and design and what converts best? 

Michael Epstein: Yeah, great question. So on the design side, typically you want something that's easily recognizable on brand. Think more like a Facebook ad. As somebody's scrolling through Facebook, you wanna capture their attention.

You want it to be recognizable. You want it to be easy to read and engage with. Think of it similar to how we would design a postcard campaign. You want it so that when somebody takes out their mail, they're flipping through, they recognize that, oh, this is a brand that I recognize.

I've done business with them before. I've been to this website. They're gonna pause, they're gonna read it like, cuz they're not bombarded by these messages like your email inbox where they just ignore, delete most of it. Or it goes to a promotions tab, like they're gonna pause and actually see what this has to say.

And so you want it to be easily recognizable. But that's also why we have a fully managed concierge service and it's included in the cost because we work with thousands of brands. We've run countless numbers of these campaigns. We know what best practices are we will actually do the whole thing for you, including design.

We have a full in-house creative team that does unbelievable work we know what best practices are. We know how to design not just good quality designs, but good quality designs for this channel. And a lot of brands just don't necessarily have , the time or capacity to figure this out on their own.

So we'd rather just help get it done for you. We can turn it around like in a matter of two days we'll make sure that you're like, set up for success because we want you to get you started on the right foot on this channel. We'd much rather make sure that you're set up for success and we can help you do that.


Claus Lauter: One feature that you have, and I think that's really the kick that makes it convert really high, is you're sending out real handwritten postcards. So real handwritten and brackets. Tell me a little bit more about that. Sure. 

Michael Epstein: That's one of the formats that we offer are handwritten cards, and it's actual pen to paper, like it's our robotic tech that holds a pen to paper and writes with all the nuance of a human hand in that. It's like each letter is different. The letters connect and they alternate and they move around and like the indentation is different and spacing is different. We really use those as like a v i P touchpoint.

They're a really special way to create, like personalized thank you. Notes at scale. For customers it's say place their fifth order with your brand or just spent $500 with you. Like you can automatically trigger a handwritten note, in a handwritten envelope with a stamp on it.

That's like, Just wanna to say thank you for being such a valued customer, just acknowledging that person. It's just an unforgettable touchpoint with a brand and there's actually studies that also show that people that receive direct mail and specifically handwritten direct mail from a brand tend to have significantly higher LTVs over time.

So it's just a really nice touchpoint that, is unforgettable sort of memorable experience for brands. Particularly with their higher value customers. 

Claus Lauter: Yeah, it really flipped top to button. , in the 1990s, you were happy to get a email and your post box was full with paper. Now it's the other way around.

Yeah. Now tell me a little bit more about the workflow. So how does the setup work? How do I get my campaigns up and running? 

Michael Epstein: Sure. So you install our Shopify app just like any app. It's free to install the app and then. Our team can help you again from start to finish. We have a great strategy team that can go in.

Give you an idea of what are the best segments to run that we recommend and we think are gonna work best for your brand? We'll build those out. It's super simple. We can do it right in the app. You build segments the same way you would build a segment and like email your e s p, like Clavio, and we'll also can do all the design for you, as I mentioned.

So our team can start on designs. You can send us like your brand guide if you have one, or we can just reference assets that you have in a folder or on your website. We'll typically get it really, really close like on the first try, cuz we have some really good folks on the team and have done this a lot.

it can really be as fast as a couple day turnaround from start to finish. it's really a matter of how how quickly the brands are ready to move on. Something like that. We can move really fast. realistically, most brands take. A week or so to get started.

They might have a couple comments on the creative or wanna understand the strategy. We'll walk everybody through it and then launch. And it's in customer's hands, typically two to five days from the time we launch. 

Claus Lauter: Okay. In the beginning they said that postcards have a 28 times higher response rate than email and digital.

Do you have other KPIs that you got over time that you could find out how good it works? 

Michael Epstein: Definitely higher engagement and response rates to your earlier question, just around like how it compares to email. Obviously there's a higher cost, so you factor that in, but the ROAS on those campaigns still tends to be really high.

measure, again, ROAS and revenue generated by these cards in real time in your dashboard. So that's one of the metrics that most brands are looking at. There certainly are intangibles in terms of. More top of mind awareness. The experience of actually having something tangible in your customer's hands and in their houses, like sitting on their desk, sitting on their counter, staring them in the face, like each time you walk by.

That's something that you just don't get with digital ads. It's just a different type of experience. And a lot of brands really love the idea of being able to have this tactile piece of marketing material, , in their customers' hands and homes. , Typical lifespan of a postcard is 17 days versus minutes for an email.

It's a different medium, and there's value that extends beyond roas. But of course, we're still holding ourselves accountable to like actual direct response performance metrics. 

Claus Lauter: Okay, Michael, you're very optimistic saying that the email has a lifespan of a couple of minutes. I don't think it's that long.

When it comes to some examples from your customers, do you have anything in mind that really sticks out where somebody made a really, really successful campaign? 

Michael Epstein: We have countless case studies and I'm like a Rolodex of these things cuz we've seen so many, there's a bunch on our site, but a handful that come to mind are.

There was one that we ran for a large, coffee brand, and they wanted to do a reactivation campaign of they were running one of their bigger promotions of the year, so they wanted to use that as an opportunity to reactivate customers that had bought in the past and then had just completely defected.

They'd been emailed a bunch of times, never came back, like, how far back can we go? They went back five years into their customer file and we were like, That's very aggressive. But if we're gonna do it, the way we structure our campaigns is we can track, we break them up into really, detailed, cohorts based on recency and frequency so that we can see with a level of precision, how do different types of customers perform over time?

How do my one-time customers perform relative to my repeat customers? How do my customers who haven't bought in the last. 90 to 180 days perform relative to 180 to 365 or 365 to five 40 or two years or more so that we know, like these are people that we can actually still target. And get a profitable return on targeting that person versus who is completely lost.

Who do we not wanna ever worry about sending to again? Because it'll just be a waste of money. That's how you optimize these campaigns moving forward. They were able to profitably reactivate customers over three years old using a postcard campaign who had been. On their email list, they'd been in retargeting campaigns over a period of time and they hadn't come back.

It just needed that extra nudge. So that's like a really good example. And we have tons of examples of, similar brands, like a lot of consumable brands, supplements, C P G type brands. Another thing that's really interesting that we've been doing more recently is brands that are making a push into retail.

So traditionally online only brands like D two C only, there's this big push to also diversify your distribution channels. they're getting tests set up at Target and Whole Foods and Albertsons and retail stores. How do they drive retail velocity? We can take your first party data.

Through our connection with your e-commerce store, use that to build like lookalike models off of that. And then further refine it to target people that we know specifically visit certain retailers and are in proximity to those retailers and even buy from, , your product category. So we did a, campaign recently for, a neat jerky product and we could say we wanna target people that are shop more than a couple times a month at Target, have bought meat jerky products.

And have our outdoor enthusiasts and have all these other attributes that ne that look like our customers. that's a newer thing that we've been launching for a lot of brands, which is just different, we see a lot of brands making that push into retail, we look to support them there as well.

Claus Lauter: That's a very interesting concept. I like that. Who's your perfect customer when it comes to volume, revenue skews, whatever. 

Michael Epstein: Sure. Typically our ideal customer is doing at least a few million dollars in annual revenue. And the reason is they have enough of a customer base that one you can create meaningful enough segments that we know are gonna actually be really targeted and relevant as well as like big enough to move the needle for that company.

If we're creating a segment and there's 50 people in it, like that's just not gonna be enough to really make an impact on your business. And you should probably think about. More of the blocking and tackling stuff first. But for brands that are a few million in revenue, that gives you enough sort of meat to work with and the volume is gonna be significant.

And I'd say the highest concentration of our brands is typically in these consumable categories like. Food and bev, health and wellness, cosmetics, things like that. Replenishable and CPG type items. But we have brands really across the board, apparel, furniture jewelry, pet food, like really across the board we'll propose strategies that we think make the most sense for your brand based on.

Our experience working with so many similar brands and knowing what are your goals and what's likely to perform the best for you based on your category, your product, your brand. Yeah. 

Claus Lauter: Very interesting concept. How can people get in 

Michael Epstein: contact with you? Sure. You can go to post

You can reach out to me directly if you wanna talk shop, or have any questions about this, Michael, at post, or you can find me on LinkedIn or Twitter. Always happy to talk about this stuff. Provide, guidance strategy. If we don't think it's a good fit for you, we're gonna tell you that too.

We're really, stringent about. Being that trusted advisor for our brands, we do not wanna send something that we don't have. A high conviction is gonna perform well for you because you're just gonna be unhappy. You're gonna sour on the channel. That doesn't help anybody so we like to be really upfront with brands like what we think makes the most sense and happy to talk about that with anybody.

Claus Lauter: We're very cool. I will put the links in the show notes and you just one click away. I think it's a very good concept. I said I have it used in other businesses that I'm, hard of and is a very successful marketing channel and if you as a e-commerce merchants for your business has the right size and the right products, then I would highly recommend to check it out.

Michael, thanks so much for your time today. 

Michael Epstein: Thanks for having me.