Direct Mail for E-Commerce + BFCM Marketing Tips with Drew Sanocki of PostPilot

Episode 3 of the Shopify Happy Hour features Drew Sanocki, e-commerce veteran and CEO of PostPilot, the #1 direct mail app on Shopify. 

During this episode Drew shared tips including: 
 - the most valuable direct mail campaign types
 - why coupon codes aren't as important as you think
 - how to "prove" performance through appropriate audience targeting 
 - Black Friday / Cyber Monday strategies that work
 - what brands are doing to get ready for 2025

And LOTS more...all shared over a Bulleit Old Fashioned and Manhattan.

Products and brands mentioned during this episode:

• Bulleit Whiskey
• More Labs
• PostPilot 
• Dr. Squatch 
• Taylor Stitch  
• How Brands Grow by Byron Sharp
• Top Grading by Bradford Smart
• Database Marketing by Kevin Hillstrom 
• Drilling Down by Jim Novo 

Transcript

Dan (00:00)
Perfect.

Hello everybody, I'm Dan Cassidy, eCommerce marketing expert and your host of the Shopify Happy Hour. On the Shopify Happy Hour, you'll hear from Shopify founders, operators and experts on growth marketing strategies, lessons learned from the trenches and other nuggets of eCommerce wisdom shared over a different drink each episode. Today, I'd like to welcome Drew Sanocki an eCommerce veteran CEO who has turned around big busted eCommerce brands.

and is working on one right now at oVertone Haircare, is also the owner of Postpilot, which is the number one direct mail app on Shopify. Drew, welcome.

Drew Sanocki (00:42)
Good to be here, Dan. Am I allowed to say I welcome the opportunity to have a drink at 1:30 in the afternoon?

Dan (00:44)
Awesome.

I love it. So we were going back and forth on scheduling lists and we're working with JB who is running your calendar. And at first he was sending some times around like eight or nine AM. And I was like, JB, you know, it sounds like a good way to start the day, but usually I'm on coffee at that point. Yeah. But based on what we're drinking today, maybe we go a little bit later in the day. So yeah, why don't we, why don't we start with that? So what are we, what are you drinking? And then I'll share what I'm.

Drew Sanocki (01:02)
Hahaha

Dubimosis, right?

I got a Bulleit Old Fashioned. It's my go -to. You know, I've been drinking them for years. I love Bulleit. And I think you're drinking something similar.

Dan (01:31)
Very, very similar. So I like Bulleti but I, and I like old fashions as well. I typically prefer Manhattan just cause they're like a little bit sweeter and I'm more of a rye guy, but bullet rye is my, is my choice. So when you said bullet, was, I was all in on that. Yep. So when you're doing all fashions, is that your drink of choice when you're going out or at home? When, when are you having them?

Drew Sanocki (01:35)
Woof.

Okay.

You're all over it.

Yeah, think

I, you know, I too was into Manhattans. I don't know, something happens when you turn 50 and it's like you can't tolerate alcohol anymore. know, I have, I used to go hard on martinis and Manhattans and now I find that those just...

you know, knock me out the next day, I'm a zombie. So, not like an old fashioned is any lighter, but I don't know, it just feels lighter because there's ice in the cup. But yeah, I can tolerate that. I'll be functional tomorrow, which will be good.

Dan (02:23)
Yeah, it's an easy.

Awesome, it's an easy all day drinker, just your bullet old fashions, know, just knock about seven back, you're fine the next day.

Drew Sanocki (02:31)
Right, yeah, you can just nurse it through the day. I go from

coffee to an old fashioned around 11 and that's what I go through the rest of the day.

Dan (02:39)
Love it, love it.

Well, so speaking of alcohol tolerance, I'm with you where, and I think a lot of people, once you get to a certain stage in life, 30s, 40s, 50s, whenever, it's harder to tolerate alcohol. And I've been paying attention to lots of different brands in the space that are kind of alcohol hangover remedy cures.

And in the past, was basically like, just hydrate a lot and sleep it off, maybe take some pain meds, but there's been some advancements and there, is some cool stuff out there. I just came across this brand called More it's MO R E. And what you do is you, it's like a little shot you have and you drink it while you're drinking alcohol or right before it. And my wife and I have used those a couple of times before, you know, a wedding or something like that. And they really help. They're really good. think, I think where the tech is going now is.

Drew Sanocki (03:11)
Okay.

Dan (03:29)
your body kicks off a, I'm gonna butcher the name of it, but it's like acetyl aldehyde. I think that's the chemical your body kicks off that causes the hangover. And so there are some products now that will bind to that so that it actually prevents the hangover from happening. And when I've done it, it's been really nice. So yeah, we're not sponsored by them or by Bulleit or anything like that. Just sharing some recommendations. So that's always a nice thing to have.

Drew Sanocki (03:46)
Interesting.

Good to know, you know,

I drink maybe like three times a year now and like only during podcasts. So, you know, I'll have to order some more.

Dan (03:56)
Yep.

Gotcha. Awesome.

Nice. Well, thanks so much for joining and for us both having a nice excuse to share a drink. So all that said, talking about Bulleit and Whiskey and Rye, let's dig into some  marketing stuff. So you're a bit of an OG in the e -commerce space. Why don't you tell us a story about how you got into e -commerce?

Drew Sanocki (04:09)
Sure thing.

Yeah, I was, I mean, I've lived through two, maybe three, we'll see what happens, recessions. You know, as in my professional life, the first was 2000. So to set the stage, went to Stanford Business School, heart of Silicon Valley. We're graduating in everybody, like the internet's hot. know, everybody's going to at the time, eBay, iVillage, pets .com, whatever.

and nobody's interviewing at McKinsey or Goldman anymore. I was right there with them. I went to a startup which, fast forward six months, the dot com bust happens and everybody in my class is unemployed and we're all looking for jobs.

I was really into modern design furniture. I was like, maybe I'll start a furniture company, but I need to know the customer better. Maybe I'll start a store first. I went to the library, got some books on coding. I built my first website. was a drop ship retailer of furniture in 2000, 2001. And I knew something was going on like,

Google had just come on the scene and there was this whole practice of optimizing for long tail keyword phrases and modern furniture was one of them. People don't just search for a lounge chair, they search for an Eames lounge chair, right? So I knew I could optimize a site for that. I built my own platform. At the time there were no e -commerce platforms, there was like Dreamweaver. And started drop shipping furniture.

Little did I know, I was onto something. It just kind of took off. Google then launches AdWords, and that was the first channel to sort of arbitrage and grow the business. We could buy clicks for five cents. And that one took off, was in San Francisco, sold it maybe 10 years in to a small private investment group. And that's when I discovered private equity.

buying and selling of private companies. I also got married and started having kids then. So I wanted something a little bit less risky. And I became what's called a private equity operating partner with a couple different funds. So the funds would go out and leverage my expertise to buy a company. And then I often would get involved if the deal went through.

in growing the company after the acquisition. So in that capacity, I ran a street wear retailer up in Boston that was bankrupt. Another brand and then more recently an automotive brand we bought out of AutoZone. It too was sort of bleeding cash, helped turn that around and sold it. And that brings you up to date. I it was like 20 years of e -commerce.

Dan (07:19)
Love it, 20 years and about 60 seconds or so. So thanks for that background. Yeah. Well, let's, so let's go back to those days and see how we can apply it for today's modern e -commerce world. So back then when you were growing e -commerce businesses or taking them over and increasing profit, right? What was your, what was your playbook? What did you do to improve each of those businesses?

Drew Sanocki (07:23)
Those are the low lights.

Yeah, I I think there's a lot of things you look for when before you buy the property and the first I like to look at like the customer list and engagement. lot of these brands, even though they were bleeding cash, had massive customer lists. know, Karmaloop which was the streetwear brand, had four or five million people on the list and Auto Anything, which is the automotive brand, had about the same size. So it's got like this asset there.

And then you dig deeper and you realize they're not really tapping that asset well enough. And for me, I look through the lens of like email marketing and it was like, hey, they're emailing everybody on the list, the same offer every day. They're not doing the life cycle work. if we just, if we just started sending more targeted offers and not discounting as much, maybe we can get 10, 20 % additional revenue.

And then I'd go on to the next thing I knew a lot about, which was the platform. All these brands were optimizing, you know, running off of legacy platforms like server racks in the office. And so, you know, I could, this is timed with the emergence of Shopify and off the shelf platforms like Klaviyo. And you could very quickly calculate the savings if you move from legacy to off the shelf. I mean, in the case of auto anything, I think we cut like

$8 million out of the business and legacy IT spend with a move to off the shelf platforms. So it's another quick win on cost cutting. And you know, a lot of this work happens before the deal goes through. It's while you're doing diligence, you're kind of putting the playbook together. You know, legal diligence is going on and financial diligence is going on. And my job was to think through the first 30, 60, 90 days after

acquisition happens like what's my playbook? Where am I going to cut costs? Where am I going to juice revenue? And at the end of the day, is the company cash flowing? And that was always the goal. So it's just a little bit of how I would think through it.

Dan (09:53)
Love it, love it. So when you were in those businesses, turning them around, reducing cost, working to increase revenue, minimizing or consolidating tech stack, what were the metrics that you were using to track both internally and guiding your teams to work toward, along with the metrics that you were then sharing with?

your fellow investors as to whether or not the plan that was being enacted, whether that was succeeding.

Drew Sanocki (10:23)
Yeah, I mean, there's a number of things you probably the the end all be all all his cash flow and just kind of tracking that. But I think gross margin is always something that we kept a close eye on, something we called contribution margin, which essentially is like a proxy for customer lifetime value, like the profits that a customer generates for you over the first.

call it two years. I mean, you could choose an arbitrary endpoint, but that 24 month contribution margin was one I really kept a close eye on, especially on a cohort basis because I wanted to show that, you know, obviously that was negative when we'd buy the business, but eventually you want that to be positive. So that's something we kept a really close eye on. We did a lot of scoring of our customer data. I don't know if you've heard of RFM.

recency, frequency, and monetary spend. Okay, it's kind of like the old direct mail way of scoring your customers. Three metrics, recency is how recently a customer has purchased, frequency is how often they've purchased, and both R and F create which is the total spend per customer. And...

You can do that on an individual level, like each customer has an RFM score, but then you can do it in aggregate and on a cohort basis and it will show you is your customer base getting better or worse over time. So we like to see it get better. know, the customer's being more recent, spending more frequently and ultimately spending more money. So those were, we did a lot of cohort analysis, a lot of customer scoring and those are the kind of metrics we looked at.

week over week to see if we were doing well.

Dan (12:15)
Fantastic. How would that tie to, let's say if you had, I imagine you had account managers and optimization experts who were tracking and creating and running ads to drive growth in addition to people building emails, tracking retention, all that. What were the targets and less about the exact numerical targets, but what were the driving directions for them every month? What is the metric that we're driving towards?

is I completely get contribution margin. That's a very important metric for every e -commerce brand. But how would you tie that down to your account manager who is working on the team and saying, hey, let's optimize our campaigns towards this goal, knowing that that's going to lead to higher contribution margin. But what were some of those metrics, the more short -term metrics that you could look at and guide your team towards optimizing?

Drew Sanocki (13:09)
Yeah, think on a high level, we sort of adopt the OKR approach, right? Where you come up with a goal for the company and we got to get our average RF score for new customers to this. And then each of those teams you mentioned sort of distilled that goal down into their own goals. So I wouldn't I typically wouldn't be involved in like what the email person's goals were versus the paid persons. I'd look at a little bit more on a macro level.

But I would say the first thing you notice even in diligence looking at the, or even in like Google analytics before you take the reins of the company is that all customers are different, right? There are some customers that came into auto anything and would spend, you know, over the first year, $10 ,000 on.

and buy five times. And then there were other customers who would come in once and buy, you know, a spark plug and never to buy again. So, okay, customers are different. And then the second thing we noticed was that customer acquisition cost is often the same. You know, I call those those customers over here spending 10 ,000 a year like the whales on the other end of the spectrum, the minnows. And one insight is like

Hey, the cost of acquisition of a whale and a minnow are often the same. Not always, but close enough. So that means if I want to grow, let's grow. If it's just as easy, if we can acquire more whales, growth becomes a lot easier. Maybe you have to only acquire a hundred of these versus, you know, a hundred thousand minnows. So.

That was an insight. And then when you look at your acquisition channels on a macro level paid, you know, maybe your meta ads, Google ads, SEO content, email, whatever's driving new customers, you see that each channel disproportionately drives more whales or minnows. Email and direct mail in general drive more whales. And so you're like, OK, like just by reallocating some of my spend.

off of programs that drive minnows. Typically that's like an affiliate program. And putting it behind those programs that drive whales, I'm gonna achieve some growth. And then you go within the channel and you see that, in Meta, know, ad A acts very different than ad B in its ability to pull in a whale customer.

more than just is reflected in the conversion rate of that ad. So like maybe we put some more dollars behind those ads that drive.

high dollar purchases or a high frequency of purchases over the first year. So there's a lot of that optimization. mean, there's a data project involved typically because the company's not doing any of this. it's pipe your data into BigQuery or something similar and roll out some custom dashboards that allowed your team to start to get granular with these things.

Dan (16:13)
Love it. Thanks for walking us through that. Yeah, I think lots of brands and brand owners, know, a lot of people get overwhelmed with e -commerce because there's so many moving pieces, so many different platforms to keep up with. And a lot of people get focused on just short -term CPA or even ROAS on, you know, first order. But looking at things holistically and long -term like what you're talking about, you know, that's going to be the key to long -term growth and...

That is timely for where we're at right now. So this is mid September and we are quickly approaching an interesting time of year for e -commerce because we've got Q4. It's gonna be here any day now. Holiday shopping is.

quickly approaching and then we've got an election year. So, you know, this is gonna be super interesting. We're expecting media costs to increase pretty much everywhere because of that. But you've been through lots of.

holiday seasons and shopping seasons in e -comm. So can you talk about just broad strategies you would recommend to any Shopify or e -commerce brand owner or operator out there? What are some tips you can share to have a successful Black Friday, Cyber Monday and just holiday season overall?

Drew Sanocki (17:36)
Yeah, I can think of two or three that come to mind. it's a great period because customers are coming to you, your traffic's going to go up, they're looking to buy, they've got their credit cards out. You want to capture that, right? So, you know, the first thing I think we've done is overhaul our discounting strategy. I mean, I think everybody likes to lead with a discount. Not that they're bad, but...

I've had holidays where you just achieve this epic revenue level and then afterwards you run the numbers and you didn't make a dime because you were offering a discount on a product that couldn't really hold that discount. So I try to think outside the box on discounts, especially around Black Friday. That's where you sort of explore things like bundling or you you have a hero product that might have a discount and get a lot of

exposure, but the customers that come in to buy that also buy something else, you know, that you make your money on. Bundling is interesting. Other forms of of promotions that aren't discount like free gift with purchase, expedited shipping, you know, buy one, get one premium service. These are all things that.

gift wrapping, you know, that can drive interest that aren't necessarily a discount. And then obviously got to choose the right product that can, if you are going to discount, choose the right product that can hold that discount on first purchase. So that's number one is like rethink that initial offer. Number two, I'd say, you know, you're going to acquire a lot of new customers during that time. Don't neglect the people who bought from you.

one year, two year, three years ago. In many ways, that's low cost customer acquisition to kind of go back even five years I've seen brands do to previous buyers. Like don't forget to go out and touch them. Email and direct mail are great ways to do that. Direct mail in particular because a lot of these brands have unsubscribed, these customers have unsubscribed from your list.

It's low cost, new customer acquisition. You know, know, these people have bought from you before. lot of brands still get profitable, even going back five years in recency. You know, another thing you mentioned the elections is that week, you know, from Black Friday on for a week, just get so competitive on price and the dynamic ad markets, you really see your CAC kind of explode. You've got

not, you know, at Auto Anything, had AutoZone and Walmart and Amazon all entered the paid market during that week. And our costs would blow up, you know, the first year. the second year, we really tried to do our new customer acquisition now, like September, October. We stepped up our paid efforts knowing that for that week, you leaned into really your owned channels, you know, email, SMS.

direct mail to kind of pull those customers back and purchase and really like sidestep the dynamic ad market, which will only be worse this year because of the election. you know, those are some top tips. mean, engineering a second purchase also really important. You know, you might get that first purchase, but that's not the end all be all, right? Make sure you've got that second purchase campaign automated where you can bring that customer back to buy again in 30 or 60 days.

January, you know, that's when brands actually make a lot of money. So yeah, those are some top tips.

Dan (21:18)
Awesome tips, thanks for sharing. Yeah, you know, I think driving traffic is often kind of the sexy part of marketing. Everybody pays attention to the latest Facebook or TikTok ad and ad creative. And yes, all that stuff is important. But I think sometimes brands neglect, especially newer brands, they neglect the foundation and that foundation can include things like, what are your offers so that you can...

know, have as high of an average order value as possible. How can you get people to add more products to your cart, to their cart? How can you bundle in a way that you're gonna be profitable on that first order ideally, and then every purchase after that is just gonna be gravy on top. you know, I love the, when everybody else is zigging, I like to zag. And so when everybody's doing discounts.

you know, staying true to your price point, but, doing something like you mentioned where it's a free gift with certain purchases or purchases over a specific threshold is great because who doesn't love a free gift? And as long as that product is, has a high enough perceived value, then, you know, for me, I love it because holiday shopping can be a bit overwhelming when you have a lot of people to purchase gifts for. So if you get sort of this bonus gift, then it's like, all right, well, I can give that to somebody else. Or I get this extra thing that I can give to the person I was going to

include with that first purchase. yeah, those are awesome tips. So I know you mentioned direct mail a couple of times and that is something I'm very excited to talk with you about because...

Speaking of zigging when other people are zagging, everybody is focused on email and SMS and digital marketing in e -commerce because it's the digital world that we live in. But I love that you and the team at Postpilot are.

bringing more traditional marketing to e -commerce with the brand. So why don't you tell us a story about Postpilot? I'm definitely gonna have some questions to kind of dig into what you're doing and seeing with it. I know you just had a big announcement last week that I wanna talk through. But why don't you tell us a story about Postpilot, how you acquired it, why you did, and what you're up to now with it.

Drew Sanocki (23:31)
Sure. So I acquired Postpilot. It's a direct mail platform for e -commerce. It had to be 2018. I had a thesis just around marketing and I knew that the brands that succeeded often succeeded by arbitraging a new channel. So I'd lived through several new channels, right? Like first it was Google SEO was new.

the brands that figured that out got low cost customer acquisition. Then it was AdWords, brands that figured that out early, hit it early, the e -house and things like that, low cost customer acquisition. Fast forward to the emergence of Meta, the brands that initially embraced the new channel got low cost customer acquisition for a period of time and then the channel becomes arbitraged and goes away.

I'm always thinking about what are the new channels to arbitrage? And right there, hitting me in the face is direct mail. I learned how to do marketing from catalog books in 2000, because that's all there were. Sears catalog's been around for 100 years or something. So, this is one channel that hasn't been reinvented.

I know it still works because I've used it. I used it at my furniture company at Carmeloop. I always use it on the retention side because I'd go into these brands. I'd say, hey, they have five million people on the list and only 500 ,000 are opening the emails. Right. So they're the vast majority of my list. The vast majority of my previous buyers are not opening my emails, which I know it's a very rich audience. I'm just going to take whatever's working in

I'm

going to flip it into a postcard and it's going to work. And it did. It's always a pain in the ass to set up those campaigns. I'd have to find a printer. I'd have to arbitrage. I'd have to send out the campaign, like wait months. Like why hasn't somebody built Klaviyo for direct mail? So in 2018,

I just set out to acquire it. knew enough about private equity to know that you want to buy versus build, know, just kind of accelerates your launch. I found a couple of different apps that plugged into Shopify and would send a thank you note when the person purchased.

So we bought one of them. I partnered with Michael Epstein, who's been my business partner for a number of years. You know, we got it off the developer. He joined us for a year. We spent about a year on the product. We launched it as more of the Klaviyo for postcards, you know, with a strong retention use case, automation use case. And...

You know, story initially was like it ended did nothing because nobody was using it in 2019 or 2020. What it took was iOS 14 in 2021 comes out and Apple basically like shocked the world. think DTC marketers were lazy at that point because all you did was throw money at Facebook and you got your ROI. And

They wake up one day when Apple's relaunched iOS 14. You know what that does, You familiar with it? Okay.

Dan (26:56)
Yeah, mean, shook

the whole marketing, the whole marketing world.

Drew Sanocki (27:00)
Yeah, all of a sudden,

can opt out of being followed by Facebook. The ads don't work anymore. And it didn't stop with that. Gmail's been harder to get into. There's just this demise of third -party cookies. And I think your average CMO now thinks, I need a resilient marketing program. I can't be reliant on one channel. And Postpilot's revenue.

just spiked. I mean, I was running auto anything at the time. Postpilot was a side project and it took off. And so we kind of went all in on that. It started with that core retention use case, like flip whatever's working in email into direct mail in an automated scalable way.

And then we added on retargeting. And what that is is you put a pixel on your site, correlate some of your cold traffic to a physical address, and can drop a piece of print collateral, a card, or a catalog. And then ultimately, the product we just launched has been sort of in beta for a year. It's called Acquisition AI, which is

the biggest data set in direct mail, right? So we've got a massive data set, every household in the US and attributes on every household, what they buy, their affinity group. And we've made it, we've layered AI on top of that, which allows you as a marketer to, to mine the data quickly to say, like, I want to build an audience of people who are type two diabetics or mothers in their third trimester or

do a lookalike, know, here's my data, show me statistically significant buyers who I can prospect to, and so now we're doing prospecting. So we got the full funnel working. Postpone, it's just, you know, it's been ripping. We've got, we're over 100 people and the business continues to grow and, you know, I'm now happily running a software company instead of an e -commerce brand.

Dan (29:03)
Nice, nice. Good stuff. Thanks for sharing that. So who are you seeing out of all the merchants you've worked with and all the brands, who have been some of the standout performance examples working with Postpilot? And in relation to that, for anybody listening, what types of brands, whether it's specific categories or types of businesses, have you seen the most success with and which ones maybe should be a little bit more cautious going into it?

Drew Sanocki (29:33)
Yeah, I mean, we've got case studies all over the site. So some of the bigger brands using us are like Hexclad and Dr. Squatch and sort of the darlings of D2C. Hexclad's done a lot, I think, on retargeting and Squatch on reactivating past buyers. Other brands on prospecting. You know, I would say the brands... Well, let me step back and say, like, if you looked at those three buckets of...

retention, retargeting, and acquisition. know, direct mail's the only channel that allows you to do all three. Like emails over here on retention and Facebook's over here on prospecting, but you can do all three with direct mail, which is kinda nice. And the average ROAS's, like the expected returns, are gonna differ, right? Like a retention campaign,

I would say almost always delivers a good return. Because what you're doing, it really depends on the targeting, but you're going to choose an audience of your previous buyers who haven't been around and you're going to try to pull them back to buy again. If I had to sum up across our platform, you get like a 5 to 10x ROAS on that. So that works really well for almost anyone. Retargeting, it's probably a little lower, maybe 5.

three to five times prospecting probably one to three completely generalizing. But first is like to realize that it's highly dependent on the type of campaign you do, whether it will achieve a certain return. Right. And then the second thing I think brands that do well on direct mail, especially prospecting have a higher AOV.

So $100 and up, probably wouldn't recommend it if you were selling like a $20, I don't know, iPhone case or something, because it costs something to send the campaign. So obviously you want to offset that with the purchase. Furniture, apparel does really well. A lot of CPG. That's where we see like the brands really taking off automotive and, you know, bigger.

So I probably wouldn't advise starting direct mail until you have product market fit and maybe you're north of, you know, one to three million in revenue. Like below that, there's lower hanging fruit. Like if you don't have product market fit, it's not the channel to start experimenting and trying to find a price point and whether, where are your customers? I mean, that should be something like meta.

Right. But once you got that dialed in and you got to that revenue level and you want to scale and you need another channel, that's where it comes into play.

Dan (32:21)
Fantastic. Can you talk about attribution and how tight that is? Because I would assume that with the data sets that you have, because you're connected directly into Shopify, that the tracking would be pretty tight. Is that correct? And if so, you talk about how you're attributing sales?

Drew Sanocki (32:39)
Yeah.

Right, mean most people come in and they say like, guess I gotta put a coupon code on it, right? So I can track and that's, it's actually not the case because we see probably 20 % of recipients redeem the coupon who still, you know, of all the recipients who respond to an offer who go on to order, maybe 20 % use coupons.

Brands are kind of surprised and I say like, yeah, I've had brands where I put the coupon code on the damn homepage and people still check out without it. You know, it's sort of the same thing. So what is sort of what is used in direct mail is something called a match back. It's like, I know I, I sent the campaign to these households and I know they did this in the ordering system afterwards. I'm going to calculate the lift.

Right, and you're absolutely right because we have access to Shopify, like it's a Shopify app, but not exclusively. Whatever your e -comm platform is, we pull that transactional data so we can say like, hey, you sent to these households and these households redeemed it, here's your Lyft. And you as a marketer, Dan, will say like, wait a minute, Sanocki like.

Those people, you know, that also includes people who would have bought anyway and people who saw my Super Bowl ad and everything. I'm like, yes. So what we do is offer in app holdout groups. So you typically want to do a holdout group, meaning here's the test group that got the campaign of that segment. It can be a segment, you know, this is our.

two time buyer segment that hasn't ordered in 60 days. Like here are all the people we're gonna pull out 10 % or pull out 20%. They do not get the campaign. That's your control group, the test group gets it. Both testing controls see your Super Bowl ad. They both see your meta ads. They both get your emails. And you will see in the app the difference in the incrementality of the test group. If there is one. I mean, it doesn't always have incrementality, but if we...

structure of the test, right? It should. And that's, you know, at the end of the day, that's the gold standard. kind of wish every marketing app should, you know, from email to SMS should have that built in, right? Control group testing, because that tells you without a doubt, like this test was incremental or it wasn't. So

In lieu of attribution, that's kind of what we do because we can't, you know, there's no last touch, there's no first touch, it's an awareness, you know, it's more like, it's harder to measure those things. So instead, just look at incrementality off the holdout group.

Dan (35:23)
I love that solution for attribution because attribution is tough for every brand and that's a great way to have a conversation with the brand and say, yeah, we saw this lift for the households that got the mailer and we didn't see that lift for the ones that didn't. So that's a nice way to prove performance.

Drew Sanocki (35:41)
And it's something,

know, it's like, meta should build that in, email should build that in, SMS providers should build that in. Because they all take way more credit than they're actually generating because some of those customers would have bought anyway, you know, saw your ad somewhere else for some reason. And really control group testing is the only way to prove it out.

Dan (36:06)
Yeah, that's a great takeaway along with if only 20 % of consumers are using the promo code, to me that's a great opportunity to be much more aggressive with your promotion, knowing that it's not gonna eat into your overall profit as much as you think it would if only a small percentage of people are actually gonna take you up on that promotion. So that's a pretty interesting stat.

Drew Sanocki (36:30)
Sure.

mean catalogs still work and it's rare to get a catalog with a coupon code in it. It's marketing, it's old school marketing. You just have another touch point with the customer. This guy, Byron Sharp, who wrote How Brands Grow, it's a really thick book, but it's a good one. It's a tough read. A lot of data around...

keeping your brand salient with the customer. More touch points increases not only the likelihood to purchase, but the ultimate lifetime value of a customer. So it's like, a lot of people ask me, hey, Sanocki, do you wanna do email or do I wanna do SMS to this customer or do I wanna do direct mail? Because I don't wanna like...

layer those on top, nine times out of 10 you actually do. know, like yes, you want to do all of them. You just want brand awareness, you know, something like a catalog and achieves that. And your customers are going to spend a lot more, certainly enough to offset the cost of those additional ads.

Dan (37:38)
Yeah, so one of the ways I look at branding is we've obviously been around for it. I've been around for it where there's been way too many e -commerce sites and other sites that are collecting leads where it's just so spammy. You go to the site and there are five different apps that are all adding to urgency. It's sort of the buy now, buy now, buy now.

somebody's gonna rob your house and kick your dog. It's like every element of urgency and scarcity they get you to purchase. But the way we like to have conversations with clients is brand is all about just being in front of consumers and having your brand be top of mind so that when they are in the position that they are ready to purchase a product, you're already there and you're gonna be the brand that they purchase with as opposed to being a brand that just is annoying and trying to get the sale.

in just crazy overt ways because that's gonna that can ruin a brand's reputation and it doesn't leave a good taste in a consumer's mouth. But sending a beautiful a beautifully designed postcard or catalog that can work very well. And another way we'll explain direct mail to clients who are considering the platform is you know for me I'm getting at least 100 probably hundreds of emails every day and

you know, it's difficult to sort through that stuff. For mail, I get home and maybe there's five pieces of mail. A few of those are gonna be bills or something that I'm...

I'm not very interested in looking at, but if there's a postcard or a direct mail piece from a brand, I'm all over that. And yes, I'm a marketing guy and I appreciate the beauty of it. I wanna look at the copywriting. I wanna look at the lifestyle and product photography. I wanna review the offers. But even before I was in marketing, I was always interested in seeing that stuff.

So it's just one of those things where when everybody's on Meta, when everybody's doing email, how can brands differentiate? And one way to do that is to send a mail piece to people's homes when they're not gonna be inundated with 20 other mail pieces that day from other brands. So yeah, to me, it's kind of a no brainer for the brands that you mentioned where they're over that one to three million revenue mark to at least test and

Thanks for sharing those high value segments where it sounds like going, doing some type of win back campaign or going after previous customers as the highest value and then retargeting after that and cold prospecting, cold outreach after that.

So, through the platform and just through your connections, I know you have lots of conversations with e -commerce brand owners and operators. What are you hearing from brands that are like what type of marketing is working now? What's not working? What sort of murmurs are you hearing in the marketplace? What's working? Yeah, yeah.

Drew Sanocki (40:45)
hearing out there?

Well, I would say in general this year was about moving from growth to profitability. So if we, you know, one of the benefits of being in a position to see aggregate data across all of Shopify and other e -commerce, I would say generally speaking, most brands are sort of not having a breakthrough growth year.

So I think the emphasis is just on getting profitable, operating with a lean team. The metrics like revenue per employee are important. Certain incrementality has always been important. And I think there's a little bit of battening down the hatches for what's to come maybe over the next year or so. That's something I'm hearing as far as what's working now.

You know, we certainly see direct mail prospecting as one of those untapped channels for a lot of brands. Like you said, most people out there get a handful of pieces of mail a day, you know, and maybe one or two of those is from a brand versus what's going on in the inbox right now in the email inbox.

So it's real easy to differentiate price of postage is capped. the channel's not gonna go up in price and there's an opportunity then to get in front of most households in the US, certainly your target audience at a competitive price that I think you see now. I've heard a lot about TikTok shops, maybe only.

one or two brands that seem to be killing it, but I'm just like going off of what they're saying on Twitter. So you really have no idea if that's working for brands or not. What do you think's working today?

Dan (42:33)
If it's on Twitter, it's gotta be true, right?

Yeah, that's a good question. So TikTok shops is so we're testing it for some clients and we're pretty early with it. So it's too early for me to give results with those. I think I think one way that I'm hearing TikTok shops working is just insanely high volume and getting product to as many affiliates as possible.

The challenge with that is we've done a fair amount of influencer marketing for clients and there are just lots of, typically, so we often focus with kind of early stage Shopify brands and lots of them, we have to be hyper efficient with their budget. And so we're not going after giant influencers, we're going after micro influencers to create content and build awareness in the niche that they're in.

And there are just lots of micro influencers and content creators that they'll sign up for a platform to get free product, maybe make some money and the content they'll create is just crap. So we spend a lot of time on campaign briefs and researching creators to make sure that they're engaging with your community. They really are serving the niche that our client is in that the content they're going to create has the best.

chance of resonating, that they will pay attention to any sort of guidance we give them or requirements we have within that campaign brief. We typically like creators to have the creativity because if they have gotten to a point where they've grown some type of audience, they're probably pretty good at creating content, but we want to give them guidelines and guidance as to how to create that stuff. But...

with TikTok Shop, it's, yeah, I think there's just a ton of people who are just going after quantity and from what we've seen with it, for the campaign briefs we've sent out, we've seen so many people respond that they're just kind of burner accounts where it's just, you know, they'll shoot a quick boomerang for 50 different products and that's every post they have is just, they're not even, they're barely using the product. And so we, you know, I believe that,

Drew Sanocki (44:36)
Sure.

Dan (44:48)
It's not just about quantity, it's about quantity that's done well, and you've got to go through and vet all of those creators. So anyway, that's kind of my early point of view on TikTok Shop. I think it can be a great growth platform if done right, but we're kind of early with proving that. That said, I'm more bullish on the YouTube Shopify integration. I think that's going to be pretty amazing as that gets opened up to more brands. I think just the...

The audience on YouTube is probably going to be a better fit for a lot of brands than TikTok. So I'm more bullish on that. Outside of that, things that we're seeing, increased cost of digital media across most platforms for sure. Attribution and tracking continues to be an issue.

What we're doing with lots of our brands is similar to what you're talking about is just because we've seen an increase in cost, yet we are still trying to have growth because our brands are early stage and we're looking to have, you know, that kind of hockey stick growth curve is we need to do that in a way where we are working on the foundation of their marketing, which means increasing AOV, going after repeat purchases, having all the automations dialed in so that we are taking advantage of every touch point we

have with consumers. But yeah, this year has been a tough one for lots of people in e -commerce just because of media costs rising. I also think that there has been, you know, there's never been an easier time to start a dropship business. There's never been an easier time to start a private label business. And so I think there's just a lot more competition out there.

in every aspect of marketing, whether it's an e -commerce brand or an agency or a freelancer, there's a lot more people in the space. And so I think it's gotten more competitive. seeing some, we've seen economic tailwinds or headwinds this year. So that hasn't helped. So I'm guessing we'll see a little bit of a shakeout over the next year or so where I think healthier brands will survive the brands that were just not really offering much value and just trying to make a quick buck overnight.

I don't think they're gonna be around that much longer, which would be a good thing. I think the industry is getting cleaned up a little bit as the FTC is cracking down more on reviews. So there's a lot of stuff we're seeing, but that's some of it, which is another reason why I love your point on direct mail.

pricing stays the same, especially during an election cycle or Q4, the cost from the United States Postal Service, that remains consistent, regardless of how much mail is being sent out that day.

Drew Sanocki (47:27)
Yeah, think, you know, I like to rather than get hung up on the tactics, I do like to always think about principles and you know, what we all want is low cost customer acquisition, like access to more customers cheaply. And it might be TikTok shops, it might be direct mail. think what's kind of hot indirect mail now is we've got a new offering called the the shared mailer.

Right. And that's interesting because essentially like five to eight brands share one mailer. It looks very I wish I had one here. It looks very sort of curatorial with some editorial on it. And it's it's like a beautiful layout and they're around one one recipient or interest group. So crossfitters or golfers or new moms. And the benefit of that is that

you're splitting the cost of postage, you know, eight ways. So what you're essentially getting is very low cost customer acquisition, right? And then you can do a lookalike off all the brands and get, exclude their existing customers and get like really hyper -targeted with it too. So it's, if you haven't done direct mail, I'd probably recommend starting with that shared product. It's a...

because it's low cost, new customer acquisition, which is what everybody wants.

Dan (48:51)
That's great. So if brands are interested in that, would they just contact Postpilot or do they have to bring partnerships to? Okay, awesome.

Drew Sanocki (48:57)
No, no, we put that all together. So we've got

a release schedule going forward. mean, I think off the top of my head, we've got a lot of gift guides coming out for the holidays, but you know, new moms, modern mail, golfers, there's a lot coming up. so, yeah, it's all on the site. can think it's postpilot .com slash shared mailer. And there's more info on it there.

Dan (49:24)
Awesome, awesome. Well, I know we have just a few minutes left, so we're gonna ask one more question, then we're gonna move on to the speed round. So, last question before the speed round is, if you were starting over in e -commerce and wanted to build, not purchase, but actually build a Shopify business from zero to your first seven figures in revenue, so you wanted to go from zero to one million dollars in a year on a shoestring budget, how would you do it?

Drew Sanocki (49:50)
Yeah, I saw that question, don't, know, I would, shoestring is all relative. I would probably play around with Facebook ads still. But if it was like really shoestring, mean, low cost customer acquisition is like, I am probably going into Reddit boards and farmers markets and trying to find where a very concentrated group of customers all hangs out.

And if they all hang out in one place to me as a marketer that means I should be able to market cheaply to them Be it on a blog or on a message board or physically like at a farmers market, right? so I think I just would try to think about where my customers are all hanging out together and And start to try to penetrate that

Dan (50:39)
So for everybody listening, heard that Drew just said, find a Reddit board about farmer's markets. And then I think that's going to be the lowest. Exactly. Exactly. That's, good. Yeah. Yeah. Perfect. So, okay. So let's move on to the speed round. each response, 30 seconds or less. So no need to think through much as first thing that comes to top of your head. So what is one thing in life that you do better than most people and how do you do it?

Drew Sanocki (50:47)
A board or a farmer's market, I said. Or a Reddit board about farmer's markets, yeah, maybe, depending on the niche.

I think I get things done through people better than most. And how do I do it? don't know, leadership's like part art, part science. think you hold people accountable and kind of get out of the way and help them do their jobs. A lot of experience helps.

Dan (51:28)
Awesome. While we're on that topic, what's one hiring tip?

Drew Sanocki (51:33)
You didn't tell me that one was coming. Hiring tip, I really like top grading. the book Top Grading, I like going deep on someone's history, really from when they began their career and asking them about every job, what they did well, what they didn't do well. Intros to references at those jobs to develop a holistic picture of the candidate.

Dan (51:34)
Hahaha.

Awesome. So what is one of your most recommended books and you can't use the book you just mentioned?

Drew Sanocki (52:07)
I am going to go with Database Marketing by Kevin Hilstrom or Drilling Down by Jim Novo. Both great books on how to crisscross your customer data in ink profits.

Dan (52:21)
Fantastic. Name an e -commerce brand whose marketing you love and got you to buy.

Drew Sanocki (52:28)
Man, I buy so much stuff off Instagram. I would say Taylor Stitch. Taylor Stitch, menswear brand, know, great ads. I'm in the market for a shawl collared cardigan, you know, and their ad pops up and I click and buy.

Dan (52:36)
Okay.

Nice, that's funny, I was going through some of my notes for something this morning and they came up as an item of a product that I'm looking to purchase. that's good. Yep, they do.

Drew Sanocki (52:58)
Yeah, they do e -commerce really well. mean,

it's a smooth site, post -pilot customer, their ads are great, their return process is great. You know, it's just all in. They're good.

Dan (53:13)
Awesome. What's one thing you'd love to see Shopify improve?

Drew Sanocki (53:20)
I would say their analytics suite. mean, now with Google Analytics is just like, I don't know anybody that uses it anymore. I think Shopify has the opportunity to beef up that part of the business. You more than just the transactional data, but a lot of attribution and stuff in there.

Dan (53:33)
Fantastic.

Gotcha, yeah, every time I go into a client's analytics account, that dashboard is just always leaving me wanting for more. okay, and what do you spend your time on when you're not working? What kind of hobbies are you into?

Drew Sanocki (53:46)
Right, right.

I'm a dad, I got two young kids. I'm an older dad, I got two young kids. I guess that's my hobby. No, I spend time with them. They get out of school and it's walking them to whatever, volleyball, fencing, going to their sports, hanging out with them, making dinner. I think...

My time for hobbies is sort of, was when I was younger and single and now probably now when they are gonna be a little bit older and sort of more self -sufficient, but right now it's them.

Dan (54:27)
Gotcha, well those are fun at least to watch fencing and volleyball, pretty different sports, so cool. Okay, and where can people connect with you to learn more?

Drew Sanocki (54:36)
think LinkedIn, I'm pretty responsive. Most responsive, I think that's where you and I met Dan. But check my messages there. I'm Drew at Postpilot. If you want to shoot me an email.

Dan (54:42)
Yes.

Awesome, thanks so much. Well, Drew, thank you for working to improve the e -commerce ecosystem throughout your career, turning around several businesses, and for making it easy and effective for e -commerce brands to leverage direct mail through Postpilot from both a retention and acquisition standpoint, and most importantly, for joining us on the Shopify Happy Hour

Drew Sanocki (55:12)
Cheers. Thanks, Dan.

This is great.