Episode 230 Featuring Alex Bond

Direct Mail Advertising with Michael Epstein

Direct Mail Advertising with Michael Epstein

Michael Epstein is the Co-Founder of Post Pilot, a platform that allows you to send personalized postcards automatically, at scale, as easily as you'd create an email campaign. After selling his first company in 2013, Michael has served as CMO of multiple 8 and 9 figure private equity backed online retailers where he successfully utilized direct mail to improve customer loyalty, retention, and profitability.

On this episode, we discuss the direct mail advertising industry, his technology that creates hand-written cards for clients, how Post Pilot has performed since we last spoke to him a year ago, and much more.


What is PostPilot

Michael Epstein: Think of Postpilot like Klaviyo for direct mail. Similar to how brands would run an email program, you can segment your customers.

Or your prospects like you would in an email account and then send them individually personalized direct mail pieces, postcards, or the real power is in creating automated flows and triggers. So think like your core email automations, a win back campaign, a VIP campaign, a second purchase campaign, abandoned cart campaign.

Anytime a new user or prospect enters that segment, you can fire off, again, an individually personalized card to that person, try and get them to convert, and it helps you reach that large portion of folks that either aren't subscribed to your list or aren't engaging with you. with your email or digital channels.

Alex Bond: That's great. And do you get the mail addresses primarily through people who have already given you that? Or are you buying, you know, bulk lists? How are you accessing these direct mail addresses? 

Michael Epstein: Yeah, good question. So if they purchased from you before we're natively integrated with Shopify, Klaviyo, and a bunch of your ecom tech stack. So if they bought from you before. We can easily pull their address information from your Shopify customer database.

And if they haven't bought from you before and say they only have your email address, we actually have technology that can match that email address to a postal address essentially in real time and follow up with that prospect by a direct mail, even if they've never purchased from you before. 

Best practices for direct mail advertising

Michael Epstein: So we recommend starting with lower in the funnel and working your way up. Traditionally, a lot of direct mail sort of traditional providers have said, Oh, just batch and blast to everybody in a zip code or everybody in a with this household income or whatever those sort of superficial demographics are.

But we really recommend starting bottom up. So think about your existing customers who haven't engaged with your digital channels, haven't taken the action that you want them to take, such as making a second purchase or a third purchase within the expected time frame. Start there, develop a baseline sort of performance and metrics around how your customers respond to this channel and then start working your way up the funnel.

So next level up will be like what we just talked about. We call it mail match, which is taking an email prospect and finding a postal address for that person. This is a warm prospect, somebody that's engaged with your brand. Just hasn't pulled the trigger yet. They're still this fence sitter. How do you get them to convert?

You nudge them with a postcard if they haven't responded to your other channels. And then you keep working your way up. We have new technology also called SiteMatch, which takes anonymous website visitors. Matches them to a physical address and you can retarget them to with a postcard. So next level up a bit colder of an audience, but still warm because they've at least engaged with your brand in some way by visiting your site.

And then once you've, you continue to sort of prove out that your customers and prospects are responsive and you're getting good results, then you can work up to like lookalike audiences and cold prospecting, where we'll take your first party data. 

Create lookalike model for against that data and then we can find other people like us consumers from these large consumer address databases that we have access to that are good fits and match your ideal customer profile based on thousands of different attributes like, do they are they healthy lifestyle?

Do they buy meat jerky products? Do they buy sharma? Do they like do all these different things they drive a accurate whatever it is and then we can find other prospects that look like them and target them with with a postcard as well. 

Alex Bond: That's cool so you can actually find people based on their consumption habits essentially they're they're buying habits.

Michael Epstein: Yeah, exactly. And again, we look at thousands of different attributes and go really beyond just those superficial attributes and and look for many, many different data points and understand what how that relates to your ideal customer profile so that we can find more folks like that. 

Alex Bond: And I don't think you're alone in finding that below the surface iceberg level material in terms of, you know, your target.

Audience or customers, desires, needs, fears, not just, you know, their income or their gender or whatever, you know, all that kind of more surface level stuff. I think that's extremely interesting. So how do you determine, let's say you bring on a client who's using your service. How do you determine your marketing contribution for a client with something that is physical as opposed to digital? 

Michael Epstein: In terms of like performance tracking? So because we're natively integrated with Shopify, we know if that customer or prospect received a card and then we know if they go on to make a subsequent purchase over the next few weeks, we can attribute that back to the campaign that they received in real time.

We do, we know that we can also show you if they used a coupon code. That was printed on the card and we can attribute that back to the campaign in real time. We put this all on the dashboard for you. So really easy. 

Direct mail vs. Digital advertising

Alex Bond: So over the past year, since we last talked to you, have you seen, I know it's kind of a short timeframe, but have you seen an increase in the success of direct mail advertising as opposed to digital?

Michael Epstein: Oh my gosh. It's even since last year. And I think we've grown 10x since we probably last talked and it's just been it's been a wild ride. I think brands are really Continuing to feel the need to one diversify their channels. They were too dependent on Facebook for example and that just with iOS that really obviously impacted people's ability to track and target and get the same sort of performance out of that channel.

And again, just it's just a risk to focus all of your efforts in one channel and not have multiple channels for acquisition. The other thing is brands. Start to sort of tap out at a certain point on acquisition channels like Facebook. Maybe they've reached some level of scale, but they're starting to hit a diminishing level of return where the next incremental dollar they add to Facebook isn't returning at the same sort of ROAS as they were.

They were getting before. So for one, that definitely led to a lot of demand and a lot of interest in what we're doing. And I think also people just generally like the idea of having a more physical, tangible touchpoint with their customers. Our campaigns perform really well. They drive a lot of incremental ROAS, which We can, you know, we report on for you both with existing customers and new prospects or new customers.

But aside from the great performance that brands consistently get with, with the channel and with our platform, they just like the idea of having this, this tangible touch point with their customers that makes them much more memorable, keeps them top of mind. It's not this fleeting ad that they got an email that was forgotten about in an instant.

Or saw, you know, a banner ad online that they scrolled through. So there's, there's definitely something to be said for adding this as another touch point too. And we see it also bleeds into the performance of other channels. So when you layer direct mail on as another channel, another touch point. It tends to drive incremental improvement across some of the other marketing channels.

So your Facebook ROAS improves, your email conversion rates improve because it's just, it's another touch point that helps nudge people towards conversion. 

Alex Bond: So what I'm hearing you say, Michael, is that it works best in tandem with digital, not as an adversary too. 

Michael Epstein: Yeah, no, we would absolutely never suggest you shut off your digital channels or replace your digital channels. It's a supplemental channel that can be used to One, reach the folks that you're not able to reach through digital alone, like a lot of people, you're not going to necessarily hit with a Facebook ad or a YouTube ad. 

If you look at your email open rates, typically, for average e com open rate is like 20 25%, and that's of people that are still even subscribed, that leaves 75% plus of that rich audience. People that are actively, you know, have engaged with your brand in the past, but are not responding or engaging or even seeing your email campaigns. That's just a lot of money that you're leaving on the table. And this is a very easy and effective way to take advantage of that. 

Alex Bond: If a company is trying to cast a wide net in digital advertising, they, they need to pick usually between email, SMS, YouTube, Twitter, Instagram, TikTok, you know, et cetera, et cetera. A lot of times you can't really do all of it or else you're not really doing enough research on who your audience is I think. 

Compared to direct mail, there's only one delivery method, right? I mean, I think that's a huge advantage. With the increase in digital advertising platforms and methods, is that singular, we'll call it platform, a delivery method for direct mail an advantage for something like PostPilot?

Michael Epstein: Yeah, I definitely think so. And we see it in the data too. In one, we all know that there's, there's digital overload kind of going on. People are just bombarded with ads online and emails and everything else, and they tend to just tune them out. And so this is just a channel that people tend to engage with.

A lot more again. It's a lot more memorable because it's more unique. It's something that they're not getting bombarded with all the time. And second, it's not subject to the same sort of competitive dynamics that digital ads are. There's no you want to advertise on the week leading up to Black Friday.

You're going to pay through the nose to do that because competition drives up cost. We're heading towards Mother's Day right now. So that's in these holiday peak periods. tend to spike costs because everyone's trying to advertise around that. Postcards, like the price is fixed. It literally takes an act of Congress to change the price of postage.

So it's a really effective way also to reach a lot of folks around these competitive, particularly around some of these competitive seasonal periods. Where you're not, you're not subject to the same sort of inflation and competition as other digital channels. 

Alex Bond: Your service is at a fixed cost is what I'm hearing you say.

Michael Epstein: Yeah, exactly. You're not paying more because it's Black Friday. You're not paying more because I want to target You know, luxury females, this age demographic that purchase luxury items and, and that's like this coveted demographic and there's more, more competition for that. No, it's just a fixed price, no matter what audience we're targeting or what time of year we're sending it.

Evolution of PostPilot's postcard designs

Alex Bond: Also, over the last year, maybe even longer, again, a few years is kind of too small of a sample size, if graphic design aspects and selling techniques and kind of general, the aesthetics of the postcard and how you design them, if that's changed in the last year, and if not, have you seen them change throughout your time with Postpilot?

Michael Epstein: Yeah, good question. I think we're always learning. We've sent thousands and thousands and thousands of campaigns and we have a in house creative team that does the designs for our brands 95% of the time, you know, we want to make it really easy and so that's a service that we offer that's part complimentary and part of our, our service because it just takes it off their plate and because we've seen so many of these and we know what works.

We want to make sure we're setting our brands up for success. So I think the principles, haven't changed that much since last time, you know, last year, and that we kind of had a good idea of what works, but we're always sort of testing, refining and gathering aggregate data across the millions of cards that we're sending every month to understand what are little tweaks, what are best practices that make it that much more effective. 

And we'll test multiple variations of creative for brands anyway, just like split testing Facebook ad campaigns or email campaigns. We want to understand what works best. And so we continuously are looking to optimize that. I think in general, the fundamentals are fairly You know, consistent in that you want something that's clear, consistent, well branded, recognizable with your brand. 

We say it's the best practice to put a QR code on the card to make it easy to just scan and get back to your website or even back to your cart. We have dynamic personalization. So it individually personalizes each card. Like it calls somebody out by name. It's like, Hey, Alex, time for a refill. Come back today. We'll take 10% off your cart. 

Like those kinds of things are, are sort of the fundamental best practices that I think have stayed relatively consistent, but to your question, we're always, always optimizing and testing.

Targeting valuable customers

Alex Bond: So, as I mentioned at the top of the episode, we, Debutify, spoke with you last year and you mentioned some of the things that you were working on for the future. So, I want to do. A little report card or, or breakdown to see how you did on, on some of these goals and ideas that you spoke about with Connor.

So the first goal you mentioned was moving up the funnel that you mentioned earlier a little bit more than sending out cold cards to customers or potential customers. So have you been able to target more valuable customers that way? 

Michael Epstein: Yes. So I think last year we were really only targeting existing customers in your Shopify database, which is still super effective. And still where we recommend brands start again, that's the lowest hanging fruit and you're going to get the best performance out of those folks. But we've definitely moved up the funnel. 

So I mentioned our mail match technology, which has taken those email subscribers, finding a postal address and then retargeting them with a postcard. Our site match, which is taking anonymous website visitors, finding a postal address for them and retargeting them with a postcard. And then ultimately those cold audiences. So think lookalike prospects. 

Or other sort of life events, we can find, you know, expectant mothers and people that have moved recently, things like that. But lookalike audiences have become really popular for brands once they've reached a certain level of sort of scale to do more cold prospecting. 

Handwritten card technology

Alex Bond: You also mentioned in that episode that you acquired this technology to provide customers with actual handwritten cards to increase that personable feeling of your cards. How have you been able to implement that technology? 

Michael Epstein: Yeah, I like to be a harsh critic of myself, but I'd have to give, I'd have to give us an A on that one. We fully integrated our handwritten card technology. And so we have robotic tack that literally holds a pen to paper and writes with all the nuance of human handwriting so each letter is variable so it doesn't look the same every time it's written. 

The lines are sort of wavy and the indentation is all variable and it's it literally. writes like pen to paper with in a handwritten envelope with a first class postage stamp on the envelope And it's a really effective way to create just a a really special touch point We typically reserve that for vip customers. 

So think trigger it when someone's made their fifth purchase from you or trigger it when somebody's made They're spent over 500 with you total, like send a note from, you know, the founder or somebody at the company like head of customer service.

It's just like, we just want to acknowledge you and thank you for being such a loyal customer. It's not really designed to get a sort of a traditional ROI campaign. It's more reserved for the special moments that you want to create with your with your best customers. And it's really effective at that.

And yeah, data studies show again, people who receive this sort of handwritten correspondence from brands, even your best customers have significantly higher LTV over time because it just creates a special sort of bond with with those customers. 

Alex Bond: So it sounds like the implementation has gone successfully. What is the actual client use rate? Success looked like our are your clients a lot more interested in using this sort of technology? 

Michael Epstein: Yeah, I think I don't know the exact percentage off off hand, but I know it's been widely adopted by our customers as like another touch point. Again it's typically reserved for their best customers so they start with sort of the win back campaigns and abandoned carts and things like that they start moving up to some of the prospecting and acquisition type campaigns and then they tend to layer on these special the handwritten cards.

Or sometimes they'll even send it around special holidays. So again, Mother's Day, if they're an audience, if they're a brand that caters to that audience, they might just send a handwritten card to some of their best, their best female customers. It's just like, just want to wish you a happy Mother's Day or just want to wish you a happy New Year, things like that.

Competition over the past year


Alex Bond: I'm curious what the competition looks like in your space. So in the past year, especially with the development of this new technology, moving up the funnel, has anyone else really grabbed onto this idea and started using it to, to your knowledge, I mean, what has the competition in your space looked like over the past year?

Michael Epstein: Sure. I think there's definitely more attention being placed on our space right now. Direct mail as a channel in general has just been growing in popularity. I think what's sort of special and unique about us in particular, aside from our, our platform and technology, where there's a lot of capabilities that we have that, that others just don't have.

One, our really laser focus on e com and direct to consumer brands and, or digitally native brands. We, we understand that customer extremely well. I've been that customer for over 20 years running eight and nine fairly commerce brands. So as my co founder and business partner, we built the product that we know that customer wants.

And we are really focused on providing a salute that solution to that customer as opposed to just being broad and saying we also service local restaurants and hotel chain and Home Depot and these other companies where they don't really understand the needs. And capabilities that are important to our specific customer, our ICPR persona.

So that's one. We also have our done for you service. So it's really a fully managed concierge service. Because again, our team understands how to do this, what best practices are, and they understand the needs of that, that customer. So everything from setup to strategy to design, we'll do for them, which is also a unique part of our service.

And we run our own production facility. So we actually have our own commercial, like large commercial printing operation. That's got to cut costs. Yeah. I mean it, I think the biggest reason that we did it is quality control. Other brands, you know, other printers are actually just sort of software or APIs that then farm out the printing to a bunch of random printers scattered around the country.

And we've seen the quality of that. It's how we started when we first started to be totally transparent. And we just were totally not pleased with the quality. And neither were we were too busy, too often finding ourselves having to apologize to customers for the quality of the cards. So that was really the driver in us taking it in house.

And then in addition to that, it allows us to be more nimble, speedier, we turn things around like same day also allows us to be that much more competitive on cost. So we're, we tend to be the lowest price relative to anybody that's doing anything similar while still providing better quality and a better and a better capabilities.

Navigating personalization in postcards

Alex Bond:This is something that just literally popped into my head last night. How do you prevent from being too personable in your cards? I mean, with such wide access to personal information that you you've kind of explained a little bit what's kind of the ethical boundary for what should and shouldn't be included in in these postcards?

Michael Epstein: Yeah, typically we're not a good starting point is to just personalize sort of based on name like greet somebody by name And I think dale carnegie said like the what was it like sweetest sounding word to everyone is their own name. 

I mean that just that sort of personalization alone is a good starting point and then it's really And the other types of personalization are more sort of the attributes or behavioral characteristics about who might receive the card.

For brands, for customers who have already done business with your brand, like that's a no brainer. Like this is, I just got a direct mail piece from a company that I've already done business with. I know how that, you know, I'm familiar with them. I just needed that nudge or a reminder to go back and check out what's new or to repurchase from them.

For colder audiences, it's still we hear from a lot of brands, like there's certain people who are used to sort of cookie tracking and retargeting online and doing things like that. They tend a lot of brands and customers say they tend to find that actually a little sort of creepier when they're retargeted online and it feels like they just went to a website and You know, then all of a sudden they're seeing ads for that brand everywhere.

A lot of brands just tend to tell us like they're actually more comfortable sending something through the mail because it just doesn't feel like as, as creepy, like they're following them around. And so I think ethically, like there's not a, or legally there's not a restriction on sending something to a cold prospect through the mail.

Like there is with email where you can't, you know, you have canned spam, you can't just spam people who didn't opt into your list. So legally, you're totally in the clear and sort of best practice or ethically, like, I think you just want to send something that feels relevant to somebody. 

And I don't think that as long as you're not putting any sort of personal information on the card that they would really question how you got access to that. I think most people would be comfortable with that. 

AI technology on the postcard advertising industry

Alex Bond: I'm interested in what you think about the proliferation of AI technology and how that might create a boom in this personable postcard advertising industry that you're a part of do you think that's a tech that'll be used in this space and thus might create more competition for you?

Michael Epstein: What I see is some of the opportunities with AI Is just continuing to get that much better in identifying like those lookalike audiences for example we already use machine learning algorithms and sort of a ice adjacent technology to help identify and tease these these prospects out from the universe of hundreds of millions of us consumers and households so i think it's only gonna help that get more effective.

And it's also going to help us get even that much more precise with some of our triggers and automation. So we have a lot of data around typical latency between purchases, for example. So somebody who makes their second purchase, the 90% of the time will make their third purchase within 63 days. Like we have that data today and we use that to help inform some of our triggers.

But again, I think using AI, it's going to allow us to be that much more personalized and And precise in how we set those, those different triggers. So really actually excited about integrating a lot of that into what we do today and more of it into what we do today. In terms of creating more competition, you know, I think we like our offering.

We like where we're at in terms of our product and our capability. We have a lot on our road map. For this year, that's going to keep raising the bar and keep increasing the gap between what we're doing and what we see other folks doing. 

And then I think our integrations and our in house production or continue to be the most like my co founder and I kind of joke to each other sometimes like you wouldn't typically think a software company wants to operate a print house.

But in a lot of ways, it's a great advantage to us because, you know, some guy in his Garage writing software isn't necessarily gonna, you know, open up a whole commercial printing operation to be able to operate. 

Alex Bond
Alex Bond

Meet Alex Bond—a seasoned multimedia producer with experience in television, music, podcasts, music videos, and advertising. Alex is a creative problem solver with a track record of overseeing high-quality media productions. He's a co-founder of the music production company Too Indecent, and he also hosted the podcast "Get in the Herd," which was voted "Best Local Podcast of 2020" by the Richmond Times-Dispatch in Virginia, USA.

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