What 9-Figure Brands Do Differently (And You Don’t) with Drew Sanocki

I think everybody in the states was kind of shocked 2 years ago when they got this which is a catalog and it's from someone you wouldn't expect. Anybody

who's over 40 knows what it is because they were brought up marketing and they know cataloges. In the old days like you

know cataloges. In the old days like you had a big actual file every card was a customer and you had three metrics on it. Recency, day six purchased,

it. Recency, day six purchased, frequency, number of times purchased and RNF predict M which is the total spend.

And you can do all sorts of targeting there. And I would say even today with

there. And I would say even today with AI, the best predictive models of future lifetime value or profitability are still like 80 or 90% RFM.

Welcome everyone to another episode of Clavio Geeks. And today is another

Clavio Geeks. And today is another special episode because we have yet another guest joining us. And I'm very excit I think Omar is a lot more excited than I am. So I'm going to let him do

the intro. Omar.

the intro. Omar.

>> All right.

>> Who are we with today?

>> Yeah. For those that don't know him yet, I'll let him do the introduction himself. But um I'm just going to go a

himself. But um I'm just going to go a little bit back on uh history here. I

think some 8 years ago uh when I first got introduced to to uh Drew and Drew Sino is our guest today. I'm really

really honored to uh to have him on the podcast because for me he's been the person to um kind of like help me with some mental models uh on how to do

things. So whenever I I took a course on

things. So whenever I I took a course on I think 2017 more or less where I kind of got introduced to Claio that's actually actually I would say the Claio

geeks or the Clavio legend status is is almost thanks to Drew um because he got me introduced to Claio and really taught me a lot of the frameworks and things that I'm I'm actually still using today

and I've elaborated on and some things that I've thought came up with that he's like oh yeah but I I actually was talking about this 15 years ago already.

It's like, okay, the man, the legend.

Uh, really happy to have you here. Uh,

Drew, thank you for being here and also welcome. Maybe quick introduction, who

welcome. Maybe quick introduction, who you are, what you do, and what you care about.

>> That's awesome, man. Well, yeah, it's great to be here. My name is Drew Sinoaki. I'm uh currently the the CEO

Sinoaki. I'm uh currently the the CEO and co-founder of uh Postpilot, which is a direct mail platform for e-commerce.

But um yeah, I've been in e-commerce for like 25 years, mostly on the brand side, running brands. A lot of those brands

running brands. A lot of those brands were first I ran my own brand. This was

like in 2000 and uh sold that and then started um buying and like getting profitable other brands. So like I'd work with private equity here in the

States to buy a big brand, turn it around, get it profitable and sell it.

That's how I came up with the idea of Postpilot. And I think along the way I

Postpilot. And I think along the way I did a course on conversion XL thing and that's probably what you saw Omar.

>> Yeah.

>> But yeah, torch torch has been passed man. It's all it's all you now for the

man. It's all it's all you now for the for the for the next generation, right?

And I would say like the torch torch was passed to me from a couple mentors I had. I mean there's one guy Jim Novo was

had. I mean there's one guy Jim Novo was very instrumental. I don't know if

very instrumental. I don't know if you've ever read his stuff, but really like when I started my first brand in 2000, there was no there's no Clavio geeks. There's no, you know, there's no

geeks. There's no, you know, there's no CXL, there's no fire, nowhere to learn marketing. So I went to the library and

marketing. So I went to the library and I just started reading about how they did cataloges, you know, how how the catalog marketers work, how they did targeting and segmentation. And this guy

Jim Novo wrote a book on it. And so he became my mentor in the early days. But

yeah, that's the history.

>> What was the book?

>> What was >> uh Drilling Down?

>> Drilling Down.

>> Drilling Down Customer Data for Profits.

And it's all about it's an intro to RFM essentially.

>> Yeah. Well, yeah.

>> Omar, you you have to send Drew your jacket and six months of the year he has to wear it. Six months you wear it because you said >> I saw you saw the jacket when I met you guys at K Boss.

>> Yeah.

>> Yeah. Yeah. He never takes the thing off. That's the problem.

off. That's the problem.

>> He never takes it off. But also he takes when he takes it off, he puts on another Clavio piece of apparel and he's got something on now. I can't If you step back Yeah. See, you got something else

back Yeah. See, you got something else on from Claio. Yeah. Yeah. Full of Claio everywhere. I think his toilet paper is

everywhere. I think his toilet paper is with Claio as well.

>> My My kids actually think that I work at Claio. I had to kind of like No, no, no.

Claio. I had to kind of like No, no, no.

Actually, I got my own agency. I'm using

Claio.

>> Yeah. Do they do they send you product?

>> Well, yeah. I probably have the most Claio merch in the world and I'm now owning it.

>> You know, you go into Have you been to the Claio uh HQ in Boston?

>> Yeah.

>> Yeah. You go in and they've got like that merch area where the first time I was there was I was meeting AB and he's like, "Yeah, just take whatever you want." I came home, I had like tons of

want." I came home, I had like tons of Clavio shirts.

>> Yeah, >> it's cool. It's cool. They have a lot of cool stuff. Like in the London office,

cool stuff. Like in the London office, they have like these coffee cups which you're not allowed to take. And when I was there, I was asking my partner manager, "Do you think I can just nick one of these?" And he was like, "No, no, no. They're very serious about it." I

no. They're very serious about it." I

was like, "Okay, well that's that's a shame." But yeah, cool. All right, Omar,

shame." But yeah, cool. All right, Omar, do you want to kick off with the the first level of today's podcast? We're

going to kind of warm up into things, a little foundation, just kind of get ourselves comfortable. So, uh, let's,

ourselves comfortable. So, uh, let's, uh, kick off with the first question.

>> Yeah. So, Drew, you've been into D2C game actually long enough to see trends come and go. Um, what's one important marketing thing you've seen that kind of like stay the same over time, but that

people are still missing? Yeah, I mean I feel like I've been beating the pounding the table on lifetime value like for 20 years, you know, where everybody like acquisition's the bright shiny object.

Everybody's talking about acquiring new customers and yet there's another side of the equation which is like, hey, get the customer, you know, get your most valuable customers to stick around, to

buy longer, to buy more. And um I think I was one of the few voices to focus over there cuz it's a lot less popular a lot less popular, less sexy, but I I still think it's relevant today. You

know, it's uh >> I would say 90% of the content out there is all about Facebook funnels and optimizing meta and this kind of thing.

And and yet lifetime values really can drive the profitability of a business.

You know when you look at first purchase profitability for many e-commerce brands it's marginal at best and you know where most of the brands make money ultimately where they generate the cash flow and

the profits is on getting that second or third purchase from a customer. So I

think it's just as relevant today as it always has been. Probably even more so as as CSS increase and and acquisition becomes harder, right?

>> Yeah, >> definitely >> 100%. I think probably even more so than

>> 100%. I think probably even more so than it has ever been relevant, you know, because back in the day, you know, it was a lot easier to scale on on Facebook than it is now. you know, the the the

narrative seems to be now that at least when I talk with with brand operators and D2C founders, they they seem to care a little bit more about what happens on the back end on retention and lifetime value, they seem to be a little more

aware of these concepts where I feel like back in the day 2016, 2015, you know, everyone was just kind of focused on acquisition and that's it. So, um

yeah, it it definitely more important.

generation of marketers now who were sort of lazy because they they grew up in like the glory days of Meta where you could just throw money at the platform and and money came out, right? And all

of a sudden in the last really since iOS 14 and in 2021, I think it was >> meta has become a lot harder. All of a sudden now you have to be a marketer.

You got to think about your offer and your product and okay, what happens after the purchase, you know, and and that's where I think it plays right into Clavia, right? because that's where you

Clavia, right? because that's where you want to make sure you got your dialed and you really think about who's your customer and what they're doing after the purchase.

>> Fully fully agree on that. I think those one thing with Clay can still improve on is also adding profitability in there instead of the big revenue numbers, but yeah, we'll probably get there.

>> Yeah, they probably I mean they've if they've got access to the Shopify data, they should be able to back into that.

Yeah, >> we're obviously now as we record this on October 30th, which is pretty much a month without a day uh to to Black

Friday. So, I was kind of before the

Friday. So, I was kind of before the podcast doing some research, Drew. I was

I was looking and and I saw they have this this series of 30 days of BFCM. I'm

not sure how much of it you write it yourself, but I found it really insightful. I kind of went through every

insightful. I kind of went through every single post and I was like, man, this is gold. Um, and I I wanted to ask you, you

gold. Um, and I I wanted to ask you, you know, I get this question a lot from my own clients, but what's the sort of core mindset shift that you want D2C

founders, operators to adopt before, I guess, heading into November, which is in a couple of days?

>> Yeah. I I mean, I guess the first first question for you guys like Black Friday, is that as big a phenomenon in Europe as it is in the States? Well, I think it's a sort of flawed because obviously we

are in the space, we work in the space.

So for us it most certainly is. I think

for consumers definitely less than it is in this in the states.

>> Well, I think here you've had really like 20 years of the brands uh teaching customers for better for worse to like buy during that period after

Thanksgiving, right? that week after

Thanksgiving, right? that week after Thanksgiving in the States, which is always like the third Thursday in November. And it's um it the fir I think

November. And it's um it the fir I think the first observation that we figured out, you know, I I did this analysis with some uh at my first retailer like

in 2010 was that it's not like new demand that shows up that week after Thanksgiving. It's really reallocated

Thanksgiving. It's really reallocated demand from the rest of the quarter. So

you've got this phenomenon where more and more the the US consumer is like waiting like they're not where they would have bought something in October.

They're waiting until Black Friday and because it's reallocated demand. That's

the first thing you see. The second

thing is like because of the media, you know, the the the business media like we're hyping up the discounts. All you

see on TV are, you know, these crowds going into Walmarts and things. And so

it's all about the deal. And so brands sort of have learned that they need to discount to get attention. And you just got this bad phenomenon where it's not number one, it's not new demand. And

number two, the demand you you've reallocated to that week after Thanksgiving is now discounted because everybody discounts. So if you were to

everybody discounts. So if you were to compare your, you know, your revenue from 20 years ago during this quarter to now, you've essentially like just dropped the margin for the same amount

of revenue, right? So it's a tough environment. You know, those are all bad

environment. You know, those are all bad things. I would say the good thing is

things. I would say the good thing is like this is when consumers buy. And you

do find that like the customers that buy over Black Friday are typically like a higher lifetime value customer than the customer you acquire over the summer. If

you acquire someone and they purchase over Black Friday, they're going to purchase from you more. You have more of an opportunity to get like a full margin purchase in January, February, something

like that. So, I think the first thing

like that. So, I think the first thing is just for most marketers realize that that's kind of that's the mindset right now. You're your conversion rates are

now. You're your conversion rates are going to go up. You're going to get a lot more traffic to the site and you've got this limited window that you need to draw attention to your to your offer.

And so, the stakes have just really gone through the roof. And um I think it's with that context like you better plan for Black Friday or you're kind of at a loss.

>> Interesting. I I you said earlier is like you know the sort of the reallocation of demand and I 100% agree with that. What I've noticed though and

with that. What I've noticed though and I wonder if you think that's brands way of hacking this or if you think it's it's basically just silly you know all of these brands kind of starting Black

Friday a lot earlier. So you have October early Black Friday pre- Black Friday Black Friday VIP. Do you think that hacks the game a little bit in the sense that you still pull that demand a

little bit earlier and kind of just spread out? sales throughout the month

spread out? sales throughout the month or >> it's really like the past two or three years you've started to see brands try to get a little bit more sophisticated you know and they either try to pull the

demand to a less competitive time there are other dynamics that happen that week after Thanksgiving and one of the biggest ones is like the ad markets become insane right like at auto anything which was this automotive

aftermarket brand I was running you know say you were acquiring customers for $100 right or something like that would at least double or triple for that week because Amazon, AutoZone, and Walmart

came into the ad market. They bid up the price, right? So, I think the smarter

price, right? So, I think the smarter brands are trying to figure out a way around that. They are pulling demand

around that. They are pulling demand forward towards, you know, I'm seeing more and more stuff for Black Friday now. It's it's October. Yeah. Right.

now. It's it's October. Yeah. Right.

>> They're um they're coming off the discounts, you know, they're leaning like Jones Road Beauty did a a big campaign a year ago where they just launched a new product. It was all about this new product or gift with purchase

instead of the discount. did really

well. You know, they're leaning into other channels. I think we're sort of a

other channels. I think we're sort of a beneficiary of that at Postpilot because I'm seeing more and more brands seeing just direct mail as like an a good alternative to playing that ad game with

Meta. So, yeah. I mean, I think this

Meta. So, yeah. I mean, I think this this will only continue.

>> Yeah, we're going to have Well, I mean, we have Black Friday in July, isn't it?

I think that's a thing. Um

>> yeah, everybody's trying to the prime, you know, Amazon's Amazon's uh deal.

>> Amazon is I I wrote I wrote about this just a couple of weeks ago. I feel like they, you know, they were quite clever with, you know, when they figure out, oh, July, not much is happening.

October, not much is happening. Let's

just come up with prime and prime big deal days, which are huge, huge for them. They they work quite well to the

them. They they work quite well to the point that we create prime sales with our brands to kind of match that sort of free advertising that they run on their own. So, yeah, it's it's quite

own. So, yeah, it's it's quite interesting that you can create your own holidays. kind of like go back a little

holidays. kind of like go back a little bit on the I think some 20 years ago. We

we used to have these in the Netherlands as well, but physical stores, they would have like these periods of like 3 days or like a week long of crazy sales and

people were lining up for those like it's Yeah, but yeah, it's uh it's definitely getting harder on the competitive side. Uh I think one of our

competitive side. Uh I think one of our brands that we worked with um one of their views was like okay we are that they had high AOV products was like

people are going to be only spending so much in this month so we're going to start early so we are sure that we are going to be one of them that they're actually thinking about so starting

early in the month to not be in the consideration when they also have to buy five other things. So yeah.

>> Yeah.

>> It's not like the consumer gets any more, you know, resources to spend, right? So they they're still spending a

right? So they they're still spending a limited amount of money on that.

>> Yeah.

>> On Black Friday purchases, right?

>> Yeah. 100%. So obviously direct mail is a big theme for you host pilots and um I I was kind of wondering, you know, we run very aggressive email and SMS uh for

most of our clients and for brands that currently do a lot of email SMS and all that sort of thing. We have WhatsApp now with Clavio in the European markets. You

know, I think there's no better person than you to answer this question, but what makes direct mail worth layering in? And I guess if you want to add in

in? And I guess if you want to add in there like a bit of a sort of before BFCM uh twist, but mostly kind of how is direct mail kind of incorporated into all of that?

>> Yeah, I think everybody in the States was kind of shocked two years ago when they got this, which is like a catalog, right? And it's from someone you

right? And it's from someone you wouldn't expect. Do you guys recognize

wouldn't expect. Do you guys recognize this catalog? I I've Yeah, I've seen I

this catalog? I I've Yeah, I've seen I mean I've seen that on LinkedIn because you posted about it. Haven't

>> from a company in the United States called Amazon. I don't know if you've

called Amazon. I don't know if you've heard of them, but uh they're pretty big, right? So they they kind of shocked

big, right? So they they kind of shocked marketing, you know, two years ago. It's

like Amazon just dropped a holiday catalog. Like why did they do that? You

catalog. Like why did they do that? You

know, and they're not they're not idiots. I think it's um there's a lot of

idiots. I think it's um there's a lot of data. Well, you guys certainly in the

data. Well, you guys certainly in the email world can speak to this. I, you

know, I've read that the average subscriber gets something like 300 emails. It's like a day or over that

emails. It's like a day or over that week. Like, it's very hard to get the

week. Like, it's very hard to get the inbox or to to appear in the inbox.

>> Even if you do, the only people who could see it are subscribers and you've got this wide swath of previous buyers who are not subscribed, right? So,

compare that to your your mailbox, right? where maybe on a a good day you

right? where maybe on a a good day you get five pieces of mail, 10 piece, you know, and even if you think it's junk mail, like the customer or the recipient is still looking at it, you know, when

they when they throw it away, right? So,

it's you got to translate that into digital terms. You've got 99% deliverability, right? Because people

deliverability, right? Because people don't move that much. You can you can drop mail to to anybody, at least in the States, without the opt-in. In the in Europe, it's a little bit different. You

have to have an opt-in. And then I don't know 99% open rate like there's no way to study that but people see it right so holidays end up being just a great time

to if you really want to draw attention to your message which everybody does to do direct mail right for those reasons you know follow Amazon's lead and then you see like the byproduct if you if you

measure it and postpilot over time you will see that the you know the customers who receive direct mail typically spend more so they have higher higher A obs they spend more often. So the higher

purchase frequency over time and ultimately higher lifetime value than a customer who doesn't touch something physical and tangible. So um for all

those reasons I think holiday is just a great time to experiment with it >> as amazing.

>> It's interesting like there's a big or Amazon has been trying to get food on the ground here in the Netherlands and they're going to be investing a lot of money in the next couple of years. like

I've I've se seen some big numbers, but there's another competitor that's actually claiming the market and they've been doing this catalog thing for less when like and they do it every year.

Like we have a specific holiday happening around in December like it's almost like Christmas but then differently. I won't go into it because

differently. I won't go into it because it's a bit of a controversial holiday here, but they have been dropping this in November to all the houses and like the way they've also started changing it

like having QR codes and everything scanning like they've been really taking taking that because yeah, it's it's like it cuts through the noise of the online world. You have a physical things and

world. You have a physical things and especially if you look at yeah gifting season if you have kids for example, the kids will be going through this. They'll

be like, "I want that." Like

>> Yeah, they tore this up, you know. They

basically circled everything they want.

They put it in front of me. And Omar, to your point about like a high AOV item, like we we do see like the higher the AOVs, the better. You know, I probably wouldn't experiment with a catalog if

you're selling like a $10 item, right?

But um but the higher AO obs you can really like here's for a company we work with that sells pizza ovens if it's going to focus

but you know something like this. Yeah.

The item is probably like $1,500 US. You can really tell the story. I

US. You can really tell the story. I

mean you think about like old school long form sales letters where you can put the story in here. You can put testimonials. You can put multiple

testimonials. You can put multiple photos. It's just a great way to sell a

photos. It's just a great way to sell a more expensive product and to get it in front of the customer like well in advance of the the Black Friday rush.

>> Wow. Thanks.

>> I mean I I was going to say what you said earlier about you still see it. I

think only on that I truly believe in direct mail because I always believe that marketing is a game of impressions and I know when I look in my postal box and I see a flyer or whatever from a

brand, I may ignore it but I still acknowledge their existence. I read it and I remember I saw this shaving brand that they started advertising within the UK and I saw a flyer from them. I have

no clue how they got my address in the first place. And then I remember I saw

first place. And then I remember I saw another ad on the tube and eventually I saw like a really special promotion that they had on the tube and I I looked them up. I wonder would I have been looking

up. I wonder would I have been looking them up because I saw the ad in the tube if I wouldn't have gone the direct mail in the first place. So it's like I think it's just people think it's like oh you know like people are going to throw it out. Yeah, but it's just one impression

out. Yeah, but it's just one impression in a game of impressions that eventually can lead them up to making a purchase.

And that's kind of how I guess I look at it.

>> There's a lot of science behind that.

Like the uh there's this I don't know if you guys have read this book, How Brands Grow by uh Yeah.

>> Byron Sharp.

>> Yeah. By Byron Sharp.

>> Yeah. Very heavy. I mean, I was looking for I've got it around. There you go.

Yeah.

>> But like it's really it's really heavy.

Like it's not a lightweight throwaway book. He's sort of this Australian

book. He's sort of this Australian business professor >> and he's analyzed like across all these categories. I want to look at the number

categories. I want to look at the number one and number two brand versus all the rest. I want to compare, you know,

rest. I want to compare, you know, Coca-Cola against everybody else and figure out the number one brand. First

of all, they capture like an outsized portion of the market. It's not just proportional. You know, they when they

proportional. You know, they when they win, you win big. So, you want to win.

That's the first conclusion. And then

the second is the brands that win have uh more brand salience. So he he just says it's like touch points with the customer. You got to be wherever your

customer. You got to be wherever your customer is. If your customer is on

customer is. If your customer is on Amazon, you want to be on Amazon. If

they're in a store, you want to be in the store. You want to be on the end

the store. You want to be on the end cap. You want your brand everywhere that

cap. You want your brand everywhere that your customer is. And so that's I think that's a big reason why direct mail works really well. It's because people get the the print collateral. They throw

it on the countertop like it's in your house and then you see a couple ads.

works really well when you sync it up with creative with the email and with your meta ads. We have a lot of data that shows you get better results when you do that. So, I think it's just it speaks to his point.

>> Yeah, it does 100%. It was probably one of the toughest yet best books I've read at the beginning of this year. I had to read it twice. Once with just audio listening while reading cuz it's so it's

it's hard to capture to fully grasp some of the concepts he's explaining.

>> Podcast guest. I' I've tried to get him as a podcast guest a couple times and he's just like he's like you got to fill out all these forms with the university and you know >> oh really I didn't know that yeah

he would be a great he would be a great guest to have a conver I think yeah I have so many questions anyway um >> let's move on because we have still a couple of question you want to ask Drew

I think it was maybe when Clavio did their IPO I'm not sure I I read somewhere you were actually involved really really early on with with the Claio founders with AB the co-founders maybe helping them a little bit in the

beginning when it was really small in their own office small office still can you tell us a bit about that connection how it started and how it was back then >> I mean we were all from Boston I didn't

know them I went to college with AB I didn't know him >> but I was running a brand on Newbury Street like the main shopping street in Boston like that's where our office was

>> I was CMO it was a streetear retailer and they were like two doors goes down and we were, you know, we were trying to turn this brand around. They had like 5 million names on their email list. I

think they were running on some archaic old piece of software doing email run off a server in the the, you know, in the corner of the room. And I'm like, we got to get you guys doing life cycle marketing. They're like, what is that?

marketing. They're like, what is that?

I'm like >> cycle marketing.

>> Well, first of all, this the brand had gone bankrupt. that it went bankrupt

gone bankrupt. that it went bankrupt because every day they're sending all 5 million people like 30% off, you know, on random stuff and you'd click through and and it wouldn't the coupon would

only work on like five SKUs out of, you know, a million. But not a way to run a business. So, I was like, okay, we can't

business. So, I was like, okay, we can't do the 30% off every day. We got to go life cycle. New customers got to get one

life cycle. New customers got to get one offer, you know, old customers got to get another offer. You know, we just got to like change it up. No easy way to do it. I had read a lot about Clavio at the

it. I had read a lot about Clavio at the time was like a new platform. I don't

even know if Shopify was around then to be honest, but I was like, "Oh, they're they're two doors down." Like I and it was one in the early days, you know, there's no way to get a hold of them. No

phone number. I don't even know if they had customer success. So, I'm like, "Screw it. I get lunch. I'm just going

"Screw it. I get lunch. I'm just going to walk over there." I walked in kind of expecting like a big software company.

It's probably 10 people in a room all coding. you know, AB

coding. you know, AB >> imagine that >> AB and Ed just like coffees, right? And

they're they're so amped up and I'm like, hey, I run a brand like two doors down and I need help integrating. I they

helped me. I didn't help them, but they I was like, I need I need you guys to help me get on the platform. And yeah,

they were kind. They sat with me and I don't know who it might have been Ed. It

might have been Ed spends a lot of time with me, but it was probably like a solutions architect he had who was able to get our whole, you know, this was a hund00 million retailer, which was pretty big at the time, you know, in

2010 and got it moved on to Clavio and um, you know, immediately started printing money and uh, and the life cycle was like the right thing to do. We

were leaving so much money on the table by not doing it and I think it was probably one of their first case studies, you know. So yeah, that was the early it just started a pretty good friendship. They ultimately invested in

friendship. They ultimately invested in Postpilot, you know, and we decided to take on some investors. I was like, they're two guys I want, you know, it's like Ed and AB and and they were kind

enough to to put some money in and it's been a good relationship. We've got a really strong integration now. We're

always talking about how to make it better. So, it's been it's been

better. So, it's been it's been >> Wow. Do you know do you know that

>> Wow. Do you know do you know that picture Drew? It was like with Jeff

picture Drew? It was like with Jeff Bezos when he was in his office with like the Amazon poster behind him. I

wish you would have taken a picture of that with the Clavia office back in the day. That would have been quite a cool

day. That would have been quite a cool thing to look back on.

>> Probably like I should have quit my job at Carmaloop at the time. I should have just been like screw it. I'm joining

Clavio, you know, but I didn't do that.

So left money on the table.

>> Well, you're here now. Postpilot is a great tool. So it all, you know, end

great tool. So it all, you know, end well ended well.

>> I I joke that it's like I think, you know, when I saw Clavia working, I had I had built sort of a predecessor to Claia. I took this open-source software

Claia. I took this open-source software called PHP list and I built in RFM and targeting and and oh >> automation and it was working really well on our store. You know, this is

like 2010, the store that I built in Dreamweaver. Like in retrospect, I

Dreamweaver. Like in retrospect, I should have just turned that into Claio.

I didn't do it. Claio comes along. I

should have started the Claio for SMS because I knew life cycle was such a good idea. I didn't do that, you know,

good idea. I didn't do that, you know, attentive came along, but I got I finally got Claio for direct mail, you know. So,

know. So, >> yeah, there's interesting learn overlap.

I also have used to have my own uh ESP called Sent Mill back in the days. Uh

which also was >> ago uh >> you know like these things worked on like you were you had to use Dreamweaver XCart or like OS Commerce you know

they're just like just like a terrible >> we're old.

>> Yeah. Yeah.

>> I was just going to say I feel like a kid right now. I am so not able to relate. Um,

relate. Um, >> one more one more story. Like we're in a my business partner was who worked on the first brand with me. I was more into marketing and email. He was more into

like the cart. So, he was customizing Dreamweaver and he's like I was like, "Why don't we just build a shopping cart, man?" He's like, "Oh, the world

cart, man?" He's like, "Oh, the world doesn't need another shopping cart.

Like, what you know?" And we were in some forum of drop shippers and Toby from Shopify's in there and he's like, "I we want to build a cart." And we're just chatting with him in the forum.

We're like, "Dude, that's never going to work." You know, like there's already

work." You know, like there's already five carts, you know, Dreamweaver, man.

Have you heard of Dreamweaver? And

obviously, uh, we were wrong yet again.

So, the lesson the lesson for me is like follow what I'm doing up until postpilot and do the opposite. You make a lot of money.

>> All right. That's

>> While we're on the topic of like the the past, uh, Omar and I, we we asked this for every guest and we kind of keep kind of covering this topic quite a lot. We

had an entire episode, episode two, where we talked about it. But what's a belief that you held for years in D2C e-commerce or in marketing that you've

sort of since then flipped on its head and you don't believe in it anymore?

Like and if you don't believe in it anymore, like what made this shift happen?

>> I was probably one of the early adopter I was one of the early adopters of e-commerce and I thought e-commerce was it. I thought like direct to consumer is

it. I thought like direct to consumer is the way to go. you cut out the middleman. Everlane was the first one to

middleman. Everlane was the first one to kind of go on record is like, hey, a native D TOC brand can beat everybody because you cut out the middleman. And

I've come around on that. I I don't know that that's I mean, it can still happen.

I don't know that I'm like as big a believer in that anymore. I think omni channel is the way to go. I see most of the biggest biggest brands out there have figured out omni channel. They've

figured out, you know, a brickandmortar store or some sort of like retail placement distribution. They have, yes,

placement distribution. They have, yes, they have DTOC, but they've they've just figured out how to be in more places. I

think the economics of DTOC have gotten worse over time. It's um in in many cases not as inexpensive as you think.

You know, I I'm always working with brands that are surprised just how expensive it is to kind of keep up a store and have like a customer service team and do all the online stuff. So,

I've come off the the native, you know, sort of like DTOC is the I think now it's just a a sales channel. It's not

like a silver bullet, but you need many sales channels.

>> Interesting. I I also find a lot of some of our most successful clients, they figure out how to do D2C, Amazon. And we

have some that are trying to tap into retail now. And yeah, I definitely think

retail now. And yeah, I definitely think it's uh omni channel is the way to go.

>> I think all right, >> Warby Parker and Bonobo here in the States like really figured this out probably like five 10 years ago where they were opening up stores and then

they see like the economics of a store were far better than the economics of their DTOC, right? Like their customer acquisition costs would drop. And yeah,

it depends on your store. It depends on where you put the store. But in many cases, they would figure out that you're attracting many more of your whale customers or your best customers if you put the store in the right place. And

you're doing it a lot cheaper than you can online. And I I suspect that the

can online. And I I suspect that the economics have gotten even worse, you know, for online since then.

>> Yeah. Yeah. 100%. We we work with I work with quite a few beverage D2C brands and I was surprised to see how little they do on the D2C and how amazing they do in

retail and kind of makes sense right because beverage brands do quite well there and that was their entire focus and you know they were like sub 100k on D2C and making millions on retailers

so I think yeah >> time like customer wants to sign up for postpilot we're like who is you know these guys do 50k through their Shopify store you're too small Yeah.

>> Do 100 million through Costco. All

right.

>> Yeah.

>> That was my mistake as well when I cuz they filled out my form and they were like sub 50K. Yeah.

>> And I was like, "Okay, well, we can't really work together." And then on the call it was like, "No, no, no. We do

like 3 million annually." I'm like, "Oh, okay. Interesting."

okay. Interesting."

>> Yeah. And then the go the goal for those c for those brands is usually to drive people to store to purchase. They don't

want to drive to Shopify. you know, if they show an increase in store velocity through a Costco or a Whole Foods, they're more likely to get rolled out nationwide. And that's like that's the

nationwide. And that's like that's the game they're playing.

>> There also some some like Alberts that they actually completely reversed like they had a lot of stores. They've kind

of like had to close stores and so and they were actually I think they they started fully uh D2C there, right? So

>> they did. They did.

>> Yeah. Anyway, that's uh >> I think they they got cheap they got cheap money at the wrong time, expanded too quickly and and are trying to fix things, you know. I think that's what happened with all birds.

>> Yeah. All right, let's move on to the next question. Uh we're moving on to the

next question. Uh we're moving on to the next level as well with questions. If we

fast forward five years, um do you think D2C marketing will still revolve around email, SMS, and direct mail or will new own channels emerge that give uh the same level of control and profitability?

>> I think you hit the nail on the head with own channels. I mean that was like the that's the key phrase in there is like I just see it I definitely see it more as like the future is about own channels like you own the customer data

you could communicate to them onetoone for me the big three in owned are email SMS and direct mail you know I don't know that there's another one that I might be missing maybe you guys know but

I definitely think like operating through someone else's distribution or channel is might give you uh some early wins but it's strategically not not favorable to you long term. You know, if

you're on Amazon, you're going to pay a tax. If you're on Meta, you're going to

tax. If you're on Meta, you're going to pay a tax like to Meta. So, you know, over the next 5 years, yeah, I don't really see anything else. I see Tik Tok shops coming along now, but that's not

an own channel anymore. I mean, that's probably eventually that's going to the arbitrage will disappear. That channel

will become fairly priced. Um, and you know, Tik Tok will tax it. So, I think it's those three. Yeah.

>> Yeah. I think uh to your question earlier what you know what Claio is doing now is like they're calling SMS mobile messaging because it incorporates SMS and WhatsApp. So I think overall the

owned channel is the phone number right whatever whether you send communication through WhatsApp or SMS it's you know it's the phone number.

>> Yep.

>> Cool. Awesome. All right we're going to do a quick section here. BFCM through

Drew's eyes. And I have two questions.

If you had to strip down BFCM to three actions that you think deliver 80% of the results, what would those actions be?

>> I think you need to um dial in your offer, right? So, all the economics

offer, right? So, all the economics behind your offer. Think through how many you're going to sell. You know,

what are the economics on that because most brands just get burned on that. I

would say think of alternatives to discounting, right? We've got some list

discounting, right? We've got some list on our site of like alternatives to discount, but gift with purchase, um, premium service, you know, there's just a lot of like other things you can do

that aren't going to give away margin.

And then I got to say direct mail. It's

probably number three. Make sure you got a direct mail reactivation campaign.

It's a great time to go back. Like your

cheapest source of new buyers are past buyers. They're past buyers who last

buyers. They're past buyers who last bought from you 3, four years ago. they

unsubscribe from email or they're not opening your emails anymore because who opens emails from a you know a brand you signed up for three years ago and really the only like it's still cheaper to go

get them by sending them a d a postcard than it is acquiring a new customer off of meta. So that would be the third

of meta. So that would be the third thing I do.

>> Awesome. Awesome. Okay. And how would you measure I came up with this one. I

don't know how I would answer it myself to be fair. How would you measure BFCM success if you banned yourself from using revenue as a metric?

>> Well, it's I mean profits, right? Can I

use profits as a metric?

>> Should have added profit in there. I

should have added profit. If you if you ban yourself from using any monetary metric as a metric in the sense of like profit revenue.

>> Yeah. Um any monetary metric. Wow.

>> Wow. Like I because profitability I've been again I've been pounding the table then it's about profitability not revenue >> for years. So I would I would like I said customer lifetime value. Does that

count?

>> Yeah. No works. That works.

>> I I lifetime value is also a measure of like uh money.

>> I know that I know that's why but >> I I know when I said that I realized that if I take that away there's nothing.

>> I would actually No. Yeah. You would

like second and third orders without discounts. Oh yeah. Or per time to

discounts. Oh yeah. Or per time to purchase. I think like

purchase. I think like >> how about I I would definitely look at how many you know every brand has good and bad customers. Good customers come

in once and buy a low dollar item. Bad

customers. Good customers come in, you know, they'll buy three, four, five times from you. They'll buy the most expensive stuff. So I definitely look at

expensive stuff. So I definitely look at like how many of those good cas was my offer effective in pulling in more of those good customers? So, it's something you probably can't do in real time, but

at the end of the quarter, you know, you want to look back and say like, okay, of all those customers I I brought in to purchase during Black Friday, Cyber Monday, like who's still active? Who's

purchased multiple times? Like, was my offer really good? Because if you go out with, you know, if you go out with an offer that just attracts bad customers, it wasn't wasn't good even though revenue might have spiked.

>> Yeah. True. That's true. Cool. Awesome.

We have a quick fire. quick, but I want to just add another question. We didn't

prepare for this, but >> go on.

>> You've been talking and saying about RFM, like it's been one of the things you've talked about in the past. You're

still seeing it now. You already build a tool that kind of like had it in there.

I still see that the brands that are really doing the things the right way are using it. But I don't do see a lot of like brands still struggle to understand the value of that. Why do you think that RFM is harder for brands to

kind of like incorporate?

>> Probably math. I mean, usually it's like anybody who's over 40 knows what it is because they were brought up marketing and they know cataloges and cataloges in

the old days like you had a big actual file. Every card was a customer and you

file. Every card was a customer and you had three metrics on it. Recency, days

since purchased, frequency, number of times purchased and RNF predict M, which is the total spend. And you can do all sorts of targeting there. And I would

say even today with AI like the best predictive models of uh future lifetime value any any or profitability are still

like 80 or 90% RFM. So I think part of it's like the younger generation the kids these days don't grow up talking RFM. They talk they talk funnels they

RFM. They talk they talk funnels they talk traffic and conversions but they're not talking about those database marketing metrics. That's probably the

marketing metrics. That's probably the biggest reason. And if if there was one

biggest reason. And if if there was one like of course RFM depending on how you define define it it will depending on how you define RFM there will be small

or a lot of uh segments in there. What

segments would you say are the most valuable to go after?

>> Um you know well it's not it's more about like I think response rate. So

like customer you last acquired yesterday versus a customer who was last who last purchased 5 years ago. like the

one who bought yesterday is going to be more engaged going forward. Customer who

bought 100 times from you is going to be more engaged than the customer who bought once. So knowing that I think the

bought once. So knowing that I think the more recency or the the smaller recency, higher frequency segments are always going to be more engaged, you know, but you've got to do the testing to figure

out when it like one thing we like to do at Postpilot is like a recency test.

We'll just take all your customers going back five years. is you can drop the same campaign and we break them into quartiles or something and we could tell you where it's no longer profitable to

market to your customers, right? So I

think the most you know I guess your question was like where is it the most profitable to market? So which of these segments are the most interesting to kind of like like if if you could only choose

>> that I mean the highest the highest ROI for any brand based on database marketing is preventing an active customer from churning like when they

the average customer buys 10 times like operating at that 10th purchase like and keeping them coming around for an 11th or 12th like that tends to be the highest ROI thing you can do. It's just

what that is is different for every brand.

>> Yeah.

>> Cool. Thanks.

>> Nice.

>> We'll do a podcast on RFM alone. I think

that's something we need to kind of like share the young kids around.

>> One thing you should know about Omar in every single episode we had, he always said this. We'll do a podcast on this

said this. We'll do a podcast on this topic alone because he always has something he hears so much about he wants to do another >> right listen.

>> Well, it comes back to customer value optimization. um understand your

optimization. um understand your customers better, doing better research and our FM is in that mix as well. So

anyway yeah >> so the rapid fire questions uh we'll do five and five. Omar, you can you can kick it off. We'll ask this or that. You

can answer with your answer or you can expand on it if you want. Up to you, Drew. So

Drew. So >> yeah. All right. So let's kick it off.

>> yeah. All right. So let's kick it off.

Direct mail or email? Uh which uh drives better incremental lift right now?

>> Better. But direct mail drives incrementality and you can measure it.

You can't really measure it in email.

They certainly make it hard. So, I

wouldn't be able I wouldn't know until Claio rolls out in incrementality testing.

>> Profit or growth? What's harder to teach DTC founders to prioritize?

>> Profit. Easy. I think I think it's just like everybody's focused on growth.

Profit's what ultimately matters. And um

your average marketer doesn't really think that way. They think in terms of rorowaz, not ROI. Yeah, I've seen some some things changing like POAS, like profit and ad span, but like it was a

bit of a bit of a hype back in the year, like a year ago, and I don't hear a lot about it anymore. Surveys or phone calls, where do you learn more truth?

>> Honestly, it's neither. I I like going straight to a spreadsheet, you know? I

like looking at RFM. I like looking at customer behavior and just like past customer transactional behavior and seeing if I could find trends there, >> right? And then maybe on top of that,

>> right? And then maybe on top of that, I'll do surveys, I would say.

>> Cool. Thanks. LTV analysis or AOV optimization, which moves the deal faster before BFCM?

>> AOV optimization, unfortunately. But

yeah, upsells. You want to have all that stuff dialed, you know, in your cart.

Upsells, crossells, try to see if you can maximize the take of that one order.

>> I think this one you probably I already know what you're going to answer, but I'll see. VIP wheels or mid-tier buyers?

I'll see. VIP wheels or mid-tier buyers?

Who deserves more focus?

>> I think your whales. I think most businesses have 20% of your customers drive 80% of the profits. Figure out who they are. Fig, this is customer value

they are. Fig, this is customer value optimization to me. Figure out who they are, where they come from, what they buy, and it's easier to double your business by focusing on them. I think

the one thing that I'm just going to quickly press pause one thing that you said um 20% of your customers drive 80% most of the people will say revenue but

you're like what you're saying profit that's that's a really really important thing to to kind of like zone in on because that's that's what drives the business in the end.

>> Yep. Yep. So, all right. Cool. Awesome.

Well done. Let's continue for you.

>> Retention or acquisition. Where do most brands waste budget?

>> Acquisition. I mean, just walk around New York City and look at the brands that are advertising on city bikes or, you know, lighting meta meta ads on fire. You know, it's just Yeah, there's

fire. You know, it's just Yeah, there's no very little discipline on the acquisition side.

>> That's true. Discount stacking or a single strong offer. Which do you think can scale better? I think a single strong offer. You know, one thing to

strong offer. You know, one thing to keep in mind is you if you acquire customers off of discount, they wait to buy off discount again. So, just be really careful with discounts.

>> This one is an interesting one.

Attribution tools or just gut feel.

Which do you really trust most?

>> Gut feel.

>> Jeez.

>> But maybe that's just because >> Okay.

>> Well, maybe just because I've been doing it for 25 years. Like we can >> I was going to say, yeah, >> you know, >> for you the gut feel is is the best attribution tool. I've yet to see a

attribution tool. I've yet to see a brand that has like a solid attribution model that is like everybody believes in. It's always like oh you know it

in. It's always like oh you know it missed 30% of this or you know it's just off like nobody really at the end of the day you got to make make the call you know

>> this one's quite sort of similar founder instinct or analyst report which should decide next month's budget or spend like >> founder instinct. Okay.

>> He has the right >> finally.

>> Finally.

>> If he has the right. That's true.

Lifetime value or customer love. Which

one keeps brands alive longer?

>> Lifetime value. I mean, lifetime value.

>> How is that true?

>> I think it's just inherent in like a lot of lifetime value that the customers love the product. I know a lot of brands that have gone bankrupt and the customers love them. You know, you sell everything at half, you're going to

generate a lot of customer love, but you're going to go bankrupt.

>> Yeah. Very true. Okay, Drew, that was it from us. Honestly, thank you. Uh, it was

from us. Honestly, thank you. Uh, it was a pleasure having you on. I know Omar's been looking forward to this for a long time. And man, every single time all of

time. And man, every single time all of our nine episodes that we've done, it's like, we should get Drew Sinoi. We

should get Drew Saki on. I was like, yes, let's get it done.

>> Yeah, >> I was psyched to meet him. I was psyched to meet you in Boston. It was great. I

felt like it was a long time coming. And

>> and you and I met there, too. It was

great to see you. And yeah, I I love the podcast. So, thanks for the opportunity.

podcast. So, thanks for the opportunity.

>> Amazing. Amazing. Amazing. Maybe for the next podcast. We're still looking for a

next podcast. We're still looking for a couple of u speakers as well. And I know that when you did your CXL course, you had someone as well joining you teaching

about Facebook and uh >> Oh, Ezra. Yeah.

>> Yeah. So,

>> you want them?

>> Yeah.

>> Ezra is our is our next hit list. All

right. We'll try and make try and make that work. Um, we also I don't know if

that work. Um, we also I don't know if you want to put this in the show notes, but we have this big I'm guessing your your listeners are mostly Clavio, right?

>> Yeah. Well,

>> the name the name says a lot of it.

>> Yeah, we they they don't even sponsor sponsor us. Yes.

sponsor us. Yes.

>> We we have like a white sort of like a playbook on how to use Clavio and Postpilot that you could put in the show notes. I just put it put it there.

notes. I just put it put it there.

>> Yeah. Amazing. Yeah. We'll we'll uh put that in the uh the description of the episode. We we put us on Spotify, Apple,

episode. We we put us on Spotify, Apple, and YouTube. But yeah, awesome. Let's uh

and YouTube. But yeah, awesome. Let's uh

any before we we wrap up, Drew, obviously thinking that, you know, our audience is mostly CRM marketers, you know, Claio marketers. Anything that you want to say to them? Um probably they're

going to listen to this about two, three weeks before BFCM?

>> Yeah, I would say we still have, you know, we still have time to run some quick direct mail campaigns. So, reach

out to post reach out to me. I'm Drew

postpilot.com. love to answer any questions and uh help you guys get started.

>> Amazing.

>> Awesome. Thanks so much, Drew. Thank

you. Thank you again. Um

>> thanks. This was Claioge Geeks episode 10. Thank you so much for tuning in. I

10. Thank you so much for tuning in. I

know 10 episodes, you know. I think

we're going to probably, you know, cut it at 12 and then do a season two or something. I always wanted to have like

something. I always wanted to have like a multiple season podcast. But thanks so much everyone for tuning in. Always a

pleasure. And we will see you on the next one.