Drew Sanocki, he is 25 year DTC veteran who pivoted from a turnaround CEO to a SAAS founder. Drew’s known for turning around 3 x hundred million dollar brands that were bleeding cash and shepherding them to an exit. He now runs PostPilot, the top direct mail platform for Shopify.

> Here’s a glimpse of what you would learn….

In this episode of the Ecomm Breakthrough Podcast, host Josh Hadley interviews Drew Sanocki, a 25-year veteran in direct-to-consumer (DTC) e-commerce and founder of Post Pilot. The discussion centers on strategies for scaling e-commerce businesses, focusing on customer segmentation, data analytics, and revenue multipliers. Drew shares insights on improving revenue through customer retention, diversifying sales channels, and leveraging direct mail. He emphasizes the importance of understanding customer behavior, using data-driven decision-making, and maintaining profitability. The episode offers actionable takeaways for seven-figure business owners aiming to scale to eight figures and beyond.

Here are the 3 action items that Josh identified from this episode:

Resources mentioned in this episode:
Here are the mentions with timestamps arranged by topic:

Special Mention(s):

Related Episode(s):

Episode Sponsor
This episode is brought to you by eComm Breakthrough Consulting where I help seven-figure e-commerce owners grow to eight figures.

I started Hadley Designs in 2015 and grew it to an eight-figure brand in seven years.

I made mistakes along the way that made the path to eight figures longer. At times I doubted whether our business could even survive and become a real brand. I wish I would have had a guide to help me grow faster and avoid the stumbling blocks.

If you’ve hit a plateau and want to know the next steps to take your business to the next level, then go to www.EcommBreakthrough.com (that’s Ecomm with two M’s) to learn more.

Josh Hadley 00:00:00  Welcome to the Ecomm Breakthrough podcast. I’m your host, Josh Hadley, where I interview the top business leaders in e-commerce. Past guests include Kevin King, Michael Gerber, author of The E-myth, and Matt Clark from ASM. Today I am speaking with Drew Sanocki, and we are going to be talking about three multiplier levers that you’ll be able to pull in your business to increase revenue. This episode is brought to you by Ecomm Breakthrough, where I specialize in investing in and scaling seven figure ecommerce brands to eight figures and beyond. If you’re an ambitious e-commerce entrepreneur looking for a coach or consultant who can help take your business to the next level, I bring hands on experience, strategic insights, and the resources needed to fuel your growth. So if you or someone you know is ready to scale or looking for that coach or consultant helping them to grow, reach out to me directly at Josh at Ecomm Breakthrough dot com. That’s e-comm with two M’s and let’s turn your dreams into reality. But today I am super excited to introduce you all to Drew Sanocki.

Josh Hadley 00:00:47  He is a 25 year DTC veteran who pivoted from a turnaround CEO to a SaaS founder. Drew’s known for turning around $300 million, brands that were bleeding cash and shepherding them to exit. He now runs Post Pilot, the top direct mail platform for Shopify. So with that introduction, welcome to the show, drew. Good. Good to be here, Josh.

Drew Sanocki 00:01:06  I’ve been looking forward to this.

Josh Hadley 00:01:08  Well, drew, I’ve been looking forward to having you on the show. I’ve heard you speak at multiple events and our paths have crossed multiple times. And I’m excited to have you on the show. I heard you speak. I think it was at War Room. Ryan dice Perry Belcher’s event back in the day. That was before they they closed up War Room. helium ten had an event where you and I crossed paths. And so glad to have you here, because you’ve got fringe events. All the fringe.

Drew Sanocki 00:01:29  Events. Yeah, that one’s going way back. I was like, in the digital marketer days.

Drew Sanocki 00:01:33  I don’t even know. I think they sold digital marketer.

Josh Hadley 00:01:36  Well, they’ve they sold TNC. Right. Trafficking convergence summit. That’s now that’s now like sunset. and then yeah, they sunset War room and I think Perry Belcher went his own way. Ryan Dice, Roland Frazier they all kind of created a new founders board, type of mastermind. So they’re always doing something in that space.

Drew Sanocki 00:01:54  That’s right. yeah. Well, excited to talk e-commerce and growth, helping your your audience get from 7 to 8 figures.

Josh Hadley 00:02:00  I love it. So, drew, you’ve got extensive experience. As we all know, 25 year DTC veteran. Why don’t you just provide a little bit more insights into like why? Why you can speak on the topics you can speak of today? Give us your background real quick, what got you to where you are today and running post pilot?

Drew Sanocki 00:02:15  Yeah, I think it’s just time in the industry, right? I mean, I started my first store in 99, built it myself.

Drew Sanocki 00:02:21  There was no Shopify back then. It was one of the first drop shippers. You know, I can say this now, probably ever. Right. Because I don’t even know if we called it dropshipping back then, but it was a platform to sort of ship direct from furniture stores and brands directly to the customer and track all that. I ran that for about ten years, sold it. That’s when I got married and had kids. And I think my risk profile changed a bit. It’s like I couldn’t take the risk that I did when I was a single entrepreneur. So I discovered this world of private equity, like these big funds that buy and sell businesses. And some of those businesses are digital and e-commerce. And I became what’s called an operating partner with a couple funds where I would help them figure out, hey, is this a good deal or what? What to buy? If the deal goes through, then I might take on a management role. That’s a really good option, especially when you’re your newlywed, because you get a little bit of equity, you get some upside in the deal and then you get paid.

Drew Sanocki 00:03:12  So, that was the context where I worked on turnarounds. Didn’t intend to go after turnarounds, but it just sort of ended up that way. I worked in a lot of value funds. So, you know, if you know, growth and value investing, value investors end up with properties that are, nobody wants often, you know, they are 100 million in revenue losing ten. And I would say that’s the typical profile of the brand that I took over. You know, you don’t pay a lot for them, and you hope that you can get a little bit of growth, get some profitability and then sell them. Did that for, I guess, the next 15 years of my career, ten years of my career. I found when I would go into these brands, I’d go in and I’d look at, you know, Carmel and Boston streetwear brand, apparel brand, you know, 5 million people in the customer list And yet only 10% of them are opening up our emails. And so it was always a big opportunity to be like, how am I going to get the other 90% of people on my list? Direct mail.

Drew Sanocki 00:04:03  Right. Because you could take whatever’s working in email and then just expand it. Like if I’ve got an email going out to my one time buyers who haven’t bought in 60 days, like, hey, there’s a lot more of those who are not subscribed to my email list, why don’t I flip the same offer to them and direct mail? There was never really a nice, elegant, you know, klaviyo for postcards platform out there. So I bought a little piece of tech which is now post pilot. Spent about a year on it with with my co-founder Mike, launched it as post pilot and and then after we were running another business at the time, we sold that and then we both went on board as co-CEOs to run post pilot. That was probably in 22. and post pilot has gone from sort of like that retention use case where you’ve got the customer data, you just want to get it to a broader audience. But we’ve then added on retargeting and now you can do prospecting, which which is really cool and very similar to meta.

Drew Sanocki 00:04:52  So I’ve been running that since 22.

Josh Hadley 00:04:54  I love that I think you’ve got a a wealth of knowledge to share with us all. I’m interested. Let’s double tap real quick into the conversation on, you know, you were working in the private equity space, basically doing turnarounds for some of these brands that they’d crossed nine figures, yet they’re losing $10 million or whatever it is on an annual basis. So and you were successful in turning them around at least to another exit. So, drew, why don’t you walk us through like, what are some of the lessons that you learned there? What were like, what were the failings of those nine figure brands that were causing them to be unprofitable? And then what were the actions that you took to be able to right that ship then? And then maybe some of those things are tangible to even seven figure, eight figure entrepreneurs as well.

Drew Sanocki 00:05:33  Yeah, I would say on on the revenue side, they’ve had something going on on the revenue side and something going on on the cost side.

Drew Sanocki 00:05:40  you know, the cost side is almost like the easier side because unsurprisingly, they’re all bleeding cash. You know, you go into these karma loop auto anything. Another one I looked at like and became CEO of like they’re running you know, the website’s hosted on a server rack in the office. You know, not in the cloud. It’s, you know, 20% engineering teams to run an e-commerce business when we’re all on Shopify now, and you don’t need that. So almost like the cost side is easier to get your head around because it’s like, we got to just get this, this business to off the shelf platforms as fast as we can. A standard off the shelf stack, you know, klaviyo Shopify. and that allows us to take a lot of cost out of the, out of the business, right? People costs, software costs, consulting costs, all that stuff that often is right then enough to get them profitable. but that’s typically the first 90 days of running the business. The revenue side is a little bit of a harder nut to crack in that one.

Drew Sanocki 00:06:32  I think all these businesses in general are plagued by one thing, and it’s they treat all customers the same. and how, you know, you see that when you, when you log in to Klaviyo and you’re like, oh my God, you’re sending the same 20% off offer to, you know, 2 million people every day off everything on the site like they’re they become addicted to to discounting. They are sending the same offer to every customer every day, whether they’re a new customer, old customer, great customer, bad customer. and what they’re doing is like, you’re sort of just training everybody to buy on discount. It’s like a race to the bottom. Your margins get terrible. customers aren’t going to buy unless there’s a big fat discount there. So I think the revenue side, there’s a lot of work on getting really turning over your whole customer list and trying to get better customers in there, not discounting as much. And I write a lot about like, whales and minnows. And the general idea is like any business has great customers, you know, that come in, they pay full price, they buy a lot, you know, throughout the year.

Drew Sanocki 00:07:25  And then on the other end is, you know, bad, worse customers. We call them minnows, right. They may they come, come in, they might return something they might buy once and return it, you know. And so you see like whales and minnows behave very, very differently. They buy different things. You acquire them differently. But a key insight is often that the cost of acquisition of a whale is often the same as a cost of acquisition of a minnow. Bonobos had this famous data case that they published probably like 15 years ago, and it showed they had whales and the customers came in and they bought $15,000 and they started on men’s suits, and then they bought like ten times throughout the year and they spent $15. On the other side were the minnows guys who came in. They bought swimsuits. They bought them once and they never came back. It was like a $35 purchase. They realized the cost of acquisition was the same. So if you want to double the business, like where are you going to put your next marginal dollar, you’re going to put it on acquiring more whales if you can.

Drew Sanocki 00:08:13  You know, they figured out the whales came to different landing pages on the site through different Facebook or Meta campaigns. Right. They’re obviously looking more like suits than it swimsuits. So really they were able to like, refocus their marketing and go after the whale customer. And by spending the same amount of money, just sort of catapult their growth. So I think that that’s a bit of what you have to do on the on the revenue side.

Josh Hadley 00:08:35  Yeah, I think that’s easier said than done. Right, drew? I mean, yeah. How do you identify those whales? I mean, obviously you’re looking into the data, but how do you get granular enough to know this is where they’re coming in at. This is exactly what they’re purchasing. because I think most people are just looking at like, hey, was I profitable today? Right. And I think that maybe that’s a missing piece in a lot of people’s, playbook is data intelligence, right? And business intelligence through data analytics. And I think a lot of seven figure brands don’t have that person that’s like a data analyst.

Josh Hadley 00:09:07  Right. So, drew, how would you approach that?

Drew Sanocki 00:09:10  I mean, you can so you’re right, it does get complicated. And I don’t want everybody to like tune out from your podcast. But, there’s this way of profiling your customer that goes back probably, you know, 80 years to like the 1950s when the first catalogs came out. It’s called the RFM recency, frequency and monetary spend. And really those are three metrics you have on every customer. Recency is like how recently has the customer purchase from you in its in days. So if it’s like an R zero that means the person purchased today. If it’s an R 365 they most recently purchased from you a year ago right. frequency is the number of times the customer purchased from you, one or whatever. And then M is the total spend. You know, this guy spent, 50 bucks. This woman spent 5000. and so, I mean, in the old days, Sears catalog, wherever the first catalog was, they would have, like, a file cabinet with all the customers and, like, have those RFM scores on each one.

Drew Sanocki 00:10:04  But you find that you can use the RFM scores to do all sorts of things. And really like you can drop M because Rnf tend to predict them. But we just talk about RF scores for your customers. You’ll find that the ones that are the most recent and have the highest frequency are going to be your best customers. But they’re also you know, that’s true historically. Obviously, this guy bought from me, yesterday and, you know, she bought from me 20 times is going to be a lot more valuable than a customer who bought for me two years ago and bought once. So they’re useful historically, but they’re also predictive. And that’s where it becomes kind of interesting. It’s the customer who bought 20 times for me and bought yesterday, is more likely to buy from me again than the customer who bought, you know, five years ago and bought once, right? It makes intuitive sense, but if you lay out all your customers and you score them, you can do it in Shopify. Now with like you can sort by recency, frequency, you’re really going to look at like, okay, these are my these customers are going to have the highest lifetime value going forward.

Drew Sanocki 00:10:58  These are my whales. Let’s treat them differently. You know let’s have a VIP campaign. Let’s go out to them and call them and find out what else they want on the site. Like you start just building your business around that like high future lifetime value cohort. And I think that’s a bit of how you get there. Yeah, it works not just for purchases but also for traffic on the site. So you can look at, you know, hey, this ad campaign, this meta ad campaign is driving people who keep visiting my site, you know, high F and they’re very recent. This other meta campaign isn’t, you know, so this one is probably going to be a much better meta campaign for me. So, you know, it’s it’s sort of complicated stuff. I don’t know that, you know, if you do it on a quarterly basis and just kind of think about it. And now with AI, there are a lot of tools that can can help you think through this stuff, many of which we built into post pilot.

Josh Hadley 00:11:45  So I love that. Well, I think that I, I hope our listeners experience a mindset shift there because I think you demystified like, oh, I have all these big data sets. I need to get really technical with this. It’s quite the opposite, as you said, like, all right, boil it just down to frequency and recency. Right. How frequently are they repurchasing. And when was their last purchase. Like it’s as simple as that. And you’re right like on Shopify it’s very easy to pull that information. And I would take it a step further. It’s like all right when they first come in what are they buying. Right. And can you start to find some correlation between these people that seem to be purchasing more frequently. And what are they purchasing. And are there correlations with maybe like an ascension ladder that they’re all going up? And ultimately it’s like, how do I do more of that? Right. As I attended Alex Romo’s scaling workshop earlier this year, the one thing that Alex talked about was just like, I only focus on the back to LTV ratio.

Josh Hadley 00:12:37  That’s it. That is the only thing that he talks about like a CEO focusing on. It’s either, hey, I’m reducing the cost of acquisition to acquire a customer, which means I’m coming out with new content on a regular basis. We’re expanding the different channels that we’re advertising on, looking for more efficiency on our advertising ratio, or I’m focused on the customer LTV, which is how do I go find more of those right customers? How do I get them to buy more frequently? How do I increase their lifetime value? Right? How do I get them to just increase their average order value each time as well? Which then comes back to like just identifying. You said it perfectly like the whales. What what are the whales doing? And then start to that is the constraint of your business focus to say, hey, if I just had more whales, what if I could ten to that, right? Yeah.

Drew Sanocki 00:13:20  So yeah, difference with the nuances sort of people get me and Hermosa confused a lot because we have very similar builds.

Drew Sanocki 00:13:26  But the.

Josh Hadley 00:13:28  Yeah the hair, everything right.

Drew Sanocki 00:13:29  Yeah. The body, the body. But the difference I think is like, you got to realize if you got to segment your customers. And then I would look at the LTV in each segment. Like I wouldn’t blend it together and just look at all my customers right at at least sort my customers, buy total spend with me, break them into quartiles, and then do caca LTV for each. And you’re really going to see the difference. Then, you know, and then it’s the same thing as whales. And then I was like, you’re just you’re going to realize that the top quartile just has an amazing cat LTV and the bottom quartile, it’s not even profitable for you.

Josh Hadley 00:14:00  Yeah, I love that. I love that you said like, you break it down by each of those different like quartiles or segments or audiences of customers that you have. Right? Right. What is your individual cat to LTV ratio for each of those. And then it’s going back to like re-engineer what that whatever the highest one is.

Josh Hadley 00:14:14  Right. Yep. What what ads are bringing in the best customers. What products are bringing in the best customers. How do you go ten x that and go expand that and say screw the rest of this stuff. Right. Those are all pet projects. Now, if it’s other products like in the bonobos example, right. The swimsuits, it’s like, well, we’re we’re killing all the swimsuit ad campaigns today if that’s the case. Right. Like let’s focus on the suit. So I love that very basic drew, but I would argue most people probably overlook this. I know for me it’s easy to get caught up and just running a business day to day, and you overlook these simple things where like the meat is sitting right before it, right in front of you, but you’re just not taking a peek under the hood to find it.

Drew Sanocki 00:14:50  I mean, another thing we like to do with turnarounds is, like we talked about dialing, you know, cutting costs early. And I’ve got a I’ve got a free book called Turnaround Tips where I go through like 30 days worth of cost cuts you can do.

Drew Sanocki 00:15:01  So that could be interesting to put in the show notes or something I like it. Yeah. the second thing is treat customers differently. You know, we’ve all we all have these like whales that are sort of driving the business, you know, 8020 rule. And then the third thing is kind of a kind of like a razor I’ve used over the years. And it’s just this I got it from Jay Abraham. And the idea is, revenue consists of three things. It’s like, the number of total number of customers you acquire, their AOV, you know, if you take your total customers and your AOV and then frequency, like how many of those customers buy. And if you look over a year and you take the total number of customers. The number you know, the average person purchases per customer 1.5 or something. And then the average they spend like you multiply them out and you got the revenue of the business. So it’s another way of saying it is lifetime value in a way. But I like breaking it down into those three multipliers.

Drew Sanocki 00:15:51  Yeah. Because you sort of realize that you don’t have to, you know, if you want to double revenue, you don’t have to double any one of those. It’s the results of multiply, like, oh, it would be a lot to double the total number of customers you acquire in a quarter or double your AOV. Well, you don’t have to if you increase each of those just like 20% and then you multiply it out, you’ll see that you’ve doubled the business and it’s like, okay, could I get 20% better? Probably. And so one exercise we always do in marketing early on at these turnarounds is like you go in, you get everybody in the team and you put like a zillion ideas on the board and in a spreadsheet, and then you put them in those one of those three buckets, and then we rate them based on ease of implementation and expected impact. And we typically come up with like a core group of 6 or 7 that we’re going to attack that quarter. and I find that that’s just a really good way to kind of get my head around operationally, operationally, how to grow a business.

Drew Sanocki 00:16:41  the second thing I’d say is I don’t usually start with the new customer acquisition, because that part’s the most expensive. Like all our ideas there, we kind of put on the backburner. Instead, we focus on how are we going to increase frequency retention and AOV because those you’re talking, it’s like lower cost to do. You’re talking about optimizing the existing site. You know, these are things like your upsells, your cross sales, your post-purchase upsells, doing like a second purchase campaign and email or direct mail to bring people back, increasing prices, like you do all that stuff. And then you turn to the expensive thing, which is customer acquisition. But, you know, you’ve already built like a better net right before you go and spend money on acquisition.

Josh Hadley 00:17:21  I love that, Andrew. One thing I think that you touched on that I think it’s important that we don’t overlook, but it’s being able to prioritize the unlimited possibilities that you have in order to impact marketing and ultimately like that’s what strategy is, right? When we talk about business strategy, it’s not like, oh, I’ve got a wicked smart strategy that’s better than yours.

Josh Hadley 00:17:38  Like business strategy all comes down to like, look, we all have vaguely the similar ideas across the board. There’s unlimited ideas. And you go to all these conferences and you’re like, oh, this is a new shiny object. This looks cool, this looks cool. However, the intelligent CEO and business owner is able to create the right business strategy for their business by simply prioritizing what are the what are the actual key priorities I should impact now that are going to produce a the highest ROI, the shortest amount of time, and the ease of being able to do that right. It’s prioritizing limited resources with unlimited opportunities. Yeah. And and I love so maybe walk me through that drew like how would you guys prioritize. Like, hey, here’s our six marching orders for the next quarter when you know you’ve seen it yourself, like there’s probably hundreds or thousands of different things or marketing initiatives you could implement.

Drew Sanocki 00:18:26  Yeah, I’ve got a really cool spreadsheet. I don’t know if

Josh Hadley 00:18:30  You can share your screen if you have, if you have it here, then our friends on YouTube.

Josh Hadley 00:18:34  So if you’re just listening to the audio, make sure you come check us out over here on YouTube. Ecomm Breakthrough. You get to see, see the real deal.

Drew Sanocki 00:18:41  Yeah. And I think, I can give you a link to this, obviously. So you can,

Josh Hadley 00:18:47  Hold on. Yeah, we’ll put it in the show notes as well.

Drew Sanocki 00:18:50  Let’s see if.

Drew Sanocki 00:18:51  Are you seeing this?

Josh Hadley 00:18:52  I’m seeing it.

Drew Sanocki 00:18:53  Yeah. We basically do something like this, which is like all the ideas, you know, go in these first columns we rank, there’s the multiplier, whether it’s the number of customers, AOV or frequency. we rank it by a couple of things. But really the most important things are expected impact and then effort. You know we’ve got confidence in there. We probably have another one status. But like it’s really these two that drive the overall score okay. So this is literally what we do. We put all our ideas in a spreadsheet and we sort it by the overall score. And we just start working from top to bottom.

Josh Hadley 00:19:25  So so you just basically go down the score, whatever, whatever adds up to be the highest score. That’s kind of where you start with then, right? General.

Drew Sanocki 00:19:33  Can you see their direct mail is always the number one idea.

Josh Hadley 00:19:36  Love it, love it. Very simple but I think really important framework. So I’ve also heard people refer to it as the ice scoring method. Right.

Drew Sanocki 00:19:44  No I’ve seen that one too.

Josh Hadley 00:19:45  Yep. So awesome. All right. So drew let’s let’s talk more about let’s I’ll put you on the spot here for a lot of our listeners that are Amazon brand owners. So a lot of these DTC tactics, such as emailing through Klaviyo or even sending out direct mail, are kind of foreign to a lot of these guys now. A lot of them have aspirations. They do want to take their brand off of Amazon, but with Amazon, it’s challenging. We don’t get the customer information right. There isn’t a dedicated email list of and we and we don’t even know who the whales are of our business.

Josh Hadley 00:20:13  So maybe in your experience of working in the e-commerce space, like what’s your perspective on Amazon in and of itself? And then what is your advice or recommendations to Amazon brand owners to maybe be able to implement some of these things similarly into their own business.

Drew Sanocki 00:20:26  Yeah, that’s rough because I don’t have a lot of Amazon experience that I could talk about on the on the buying and selling companies side, like I’ve seen, maybe there was a period during the peak of the ratio when Amazon businesses were getting decent valuations, but by and large they don’t. You know, it’s like they’re hard to sell and they’re hard to sell because you don’t own the customer data. Right. And there’s a lot of risks. There’s risks that Amazon will change the algorithm. There’s risk that you’ll get knocked off by someone in China. You know whatever. So understandably like the multiple that they command is a lot lower. So I mean, I guess my number one point piece of advice is very similar. Like if you are all in on meta or something is like diversify, like set up that Shopify store, start collecting data on your customers, trying to I know there’s a zillion hacks that you probably know them much better than I do.

Drew Sanocki 00:21:12  On getting like an Amazon customer to go to your website to buy for the second purchase. You know, the brands that are that are doing well. And we had a little bit of this going on at at auto anything. But I know the simple modern guys write a lot about this on on X but using Amazon really for new customer acquisition. Like you figure out where the opportunities are there. You can bring a product to market really quickly. Maybe it’s in a certain color way or variation, but somehow you use that to acquire the customers and get them buying direct from your own site. I don’t know if you do a package insert or some, you know, sweepstakes or whatever you do to get them buying direct, but I think that’s sort of the holy grail.

Josh Hadley 00:21:45  Yeah. And I also believe that too. I think the playbook on Amazon is it increases your brand awareness. I think it adds credibility to your brand. Right. Just being present on Amazon. And also like if you’re pursuing DTC marketing strategies, whether you’re advertising on TikTok or on meta, look, there’s there is a good number of people that will only buy on Amazon.

Josh Hadley 00:22:03  And so more often than not, like we have seen, it’s about 30%, 30% of sales from a meta ad or a TikTok ad will end up on Amazon. It’s hard to attribute, but that’s that’s what’s going just to Amazon and it’s really difficult to track. however, what we’ve seen is like some brands that are only DTC native, right? They only have a Shopify brand. They hate Amazon. They’re like, no, I don’t get my customer information. There are businesses that are centered around being able to identify those DTC brands that don’t have a presence on, on Amazon, and then they create a ME2 product on Amazon and scoop up all of their sales, and they are the ones benefiting from all of the meta ad spend, the TikTok ad spend that’s going on there. So I think that’s an important thing. Like the Amazon brand owner I think needs to first cross eight figures, right? Get your brand doing well enough to where? All right. At eight figures. You can now begin the game of diversification.

Josh Hadley 00:22:52  At least that’s my perspective is keep doing what works till you cross that eight figure range. Then know that the playbook, in order to scale, to like a nine figure brand and really create true diversification for yourself happens when you start going off of Amazon, right? And you have a meta play that goes to Shopify. You have even a TikTok that goes to TikTok shop, right? And you just become more omnichannel. Then you can begin leveraging a lot of these opportunities. Which drew you talked about, you know, post pilot and direct mail. So maybe drew, maybe that’s something that we can touch on, let’s say a DTC brand. They came off of Amazon, they opened up some meta ads. They’re having success with meta ads. They’ve got a 4 or 5 Roas right now on meta ads. But as you said, and I think this is also an important mindset shift for the listeners to understand. If you’re on Amazon, you have single channel risk, okay, let’s say you’re a DTC native brand and you’re like, oh, thank heavens I’m not on Amazon.

Josh Hadley 00:23:45  I’m safe. But what if all your traffic’s coming from meta? You are one day. You are just one violation or account shutdown for meta to go in dark as well. Right. And so I think that’s an important aspect. So drew, with that being said, give us the lay of the land in the DTC game. How do you diversify your channel sources so that you’re not wholly dependent on Google for SEO or meta for your ad traffic, etc.?

Drew Sanocki 00:24:06  Yeah, I mean, you hit the nail on the head. There’s like just tons of risk in not running a diversified marketing program. And I think brands first learned that in like 2021 with iOS 14, when Apple kind of shut down Facebook on mobile device like all of a sudden the tracking went away. You couldn’t track people across apps and you know, it was a shot across the bow to a lot of brands that depended on that. But then since then, we’ve seen whether it’s privacy or whatnot. I mean, it seems like every other week Google makes a change that makes it harder to hit the inbox with Gmail.

Drew Sanocki 00:24:37  Right? And the latest iOS 18 now just made it very hard to hit the inbox with email. So it’s not just meta, it’s sort of like it’s always hard to, you know, it’s increasingly hard to reach your customers, right, or prospect for new ones. So I think your average DTC CMO now has wizened up like for for ten years, they’re we were lazy marketers. We just threw money at meta. We don’t really care about attribution. Like, you know, it works. But two things that have happened is like it’s a dynamic ad platform. It’s become more expensive, so you can no longer just buy clicks for pennies. And then the other thing is it’s like you’re at the whims of the platform. The rules change. You know, you got an iOS update or something, and all of a sudden your traffic goes to zero. So yeah, your average CMO now needs to diversify. I think that’s one of the biggest selling points of direct mail. It’s not that it’s not the hype.

Drew Sanocki 00:25:26  It’s not like we can beat your meta Roas any day of the week. Like, I mean, it might happen on a campaign or two. To me, that’s not the main value prop. It’s that you could launch a campaign that it’s going to be like one of your top three acquisition channels. But but the cost won’t change, right? Because price, the price of postage doesn’t go up or down daily like metas cost. You know, it’s not dynamic. So whatever you pay, you know, if you get A30 as today and whenever this podcast launches, you know, may it’s roughly going to be the same during Black Friday, right? Like, you can’t say the same thing about meta, like when every one of your competitors enters the ad market on Black Friday and you get bid out. So I think it’s it’s CMOs and really CFOs love the channel because once you get it cranking, it’s just going to deliver the same performance week in week out, you know, in fact. So we set up our acquisition on post pilot to be very similar to meta.

Drew Sanocki 00:26:16  It’s like you set a target Roas. You can set a budget and it’s like as long as you’re hitting that Roas, you can increase the budget if you want, or you can just hold it steady. You can cap it, but it’s like it’s it’s rolling, right. So think of it as a meta campaign. so that’s why I see a lot of brands kind of diversifying off meta. They don’t want to be screwed like they were a few years ago when when EOS happened and when I was 14 happened. And so I think it’s, it’s that it’s also like you bring up the case of, like, if I’m getting for x Roas on a meta campaign, well, naturally, you put another dollar in that campaign, you know, but you but you can’t do that forever. Like there is the law of diminishing returns. Eventually you’re going to acquire all the cheap customers, and that four is going to drop to a three, right to a two. So we also see a lot of brands come over when that happens.

Drew Sanocki 00:26:57  So it’s not just, when they’re frustrated with the platform or the performance. This week is very different from what it was last week. You know, it’s, it’s we’ve tapped it out, you know, like we’ve we’ve acquired all the customers at four. We need to go find customers at Forex Row as somewhere else. And so direct mail could, could fill that gap.

Josh Hadley 00:27:15  Yeah. Makes makes a ton of sense. So, drew, are there any, like, maybe tell us from your experience in the number of brands that you work with. What are some of the best marketing like tactics that you’ve seen and like levers like let’s say you acquire another brand today. What are some of the first things that you’re implementing into that to to boost revenue for a business?

Drew Sanocki 00:27:34  Yeah, I mean, number one, the lowest hanging fruit is, always going to be on retention. It’s that thing when you open up a brand’s klaviyo and you see, wow, they’ve got, you know, a million people, households in their customer list and oh, like only 10% are subscribed or opening my emails.

Drew Sanocki 00:27:51  Well, there’s, you know, 900,000 then who are not let’s take like literally take whatever’s working in email and flip it into direct mail. So because you don’t need the opt in and you can touch the other nine, you know, 900,000. So that could be your automated flows, your banning carts, your second purchase campaigns, your win backs. Just clone the creative clone the offer, put it into direct mail, automate it with a platform like post, or you can even do it within Klaviyo and it’s going to work. It’s going to ROI, I would say like retention campaigns, unsurprisingly, our highest ROI campaigns. I mean, you’re talking like north of ten times Roas, right? Wow. On an incremental basis. And then I think you just work your way up the funnel like, okay, if you’ve nailed retention, the next thing could be retargeting, right? everybody’s got a meta retargeting pixel on your site. You could put a post pilot retargeting pixel. What that does is correlate 40% of your cold traffic to a physical address, and you can send a card or you could send a catalog.

Drew Sanocki 00:28:43  And so think of that is like really high intent prospecting. You know you could set rules like I only want to do it if the person’s been on this page, you know, for two minutes. And they visited five pages of mine. Like that’s a high intent, high intent visitor who is not dropped an email address. But I can now send them a postcard with an offer that works really well. I mean, probably more like 3 to 5 times Roas and then the Holy Grail, I think that everybody wants is prospecting, where we generate just like meta, you know, we could do a lookalike off your customer data, come up with a very similar audience that should convert for your product, and drop a cold prospecting campaign or a catalog. And that’s going to have, like, everything in direct mail, that that Roas will be the lowest because it’s cold prospecting. But you know, you’re hoping for like incremental incrementality there, you know, maybe like a three times Roas and that’s on cold traffic.

Drew Sanocki 00:29:32  So it’s really it’s really pretty good. Yeah. So I mean we’ve got brands like Hex Clad, the you know, they do, I don’t know, 500 million a year. They’re getting consistently a forex roas on prospecting. I mean they’ve got a great brand too. But it can be done. So that’s kind of how I’d approach it.

Josh Hadley 00:29:47  Love it. I think the most important thing is being able to see, like it’s going to require multiple touches to a customer. Right. And it’s increasing that brand awareness. And I think that for anybody that’s looking to scale their business from a seven figure brand, and you think that you have the potential to get to a nine figure brand, what it’s going to take is just distribution, period, right? It’s be present on Amazon. It’s be present in the DTC world. It’s even being present in retail stores, right. Because like all of these start to like create this flywheel. And then as you look at, you know, being able to do postcard, you know, mailers or running meta ads or running TikTok ads or even running Amazon ads, and Amazon ads now allow you to go drive traffic to your own DTC website.

Josh Hadley 00:30:29  Right. Like that world is only going to continue to evolve. And so I think the importance is this, like be seen everywhere you possibly can, because you never know where that customer like, what’s going to be the trigger point that ends up having that customer purchase and it’s being able to then I think drew. Right. Like you take everything and you create a blended Roas, right? It’s like, all right, let’s take all of our marketing dollars. Because yes, our prospecting might not have a super high Roas, but actually that’s where a lot of people are at least coming in. There’s not a direct conversion on the outset, but guess what? They scan the QR code. They came to our website, but then it took him a couple other touches. It was through from some follow up Klaviyo email 20 days down the road. Or it was another meta ad that was actually a retargeting ad because they looked at purchasing this product. It was an abandoned cart message. And, you know, they ended up coming through that way.

Josh Hadley 00:31:12  I think that that’s the way people need to approach this, especially as they get into these different marketing channels, is like, you need to start like doing blended, marketing metrics. Would you agree with that? Yeah.

Drew Sanocki 00:31:23  No, I think it’s, there’s this guy out of Australia, Byron Sharp, who wrote a book called How Brands Grow, and he argues for the same thing. He’s like, you just you have to be wherever the customer is, you know, wherever she’s making her purchase decision. If it’s on Amazon, you got to be on Amazon. If it’s like in the grocery store, you got to be there. And the biggest brands in each category are the ones that have the the most. He calls it brand salience. They’re just everywhere. You know, obviously it’s expensive to get there. So I think you do want to keep an eye on efficiency. You know, I talk a lot about marketing efficiency to just measuring the total spend on your total spend on marketing, inclusive of the ads, your headcount, whatever that goes into marketing.

Drew Sanocki 00:31:58  And then the total net new revenue over, like the trailing 12 months. And that’s just a good metric to kind of keep an eye on and want to be. You want to make that efficient. I feel like we got away from it in DC for a number of years because the valuations were so high. Brands really didn’t feel like they had to run profitably. You know, it was all about getting venture funding and having a big, big exit. But those days are kind of over like there’s not venture funding anymore. The exit world has changed. You’re going to get valued based on a multiple of your profitability, your EBITDA. So all that means that your marketing has to be super efficient.

Josh Hadley 00:32:29  Yeah, I love that. Now, drew, just to wrap things up, are there quick hitting ideas that you can give us in terms of saving some costs? You had the 30 days of of cost cuts to make. But as we wrap things up, maybe share with us some of those things that existing brand owners can maybe consider, like, hey, are you are you losing profitability here? Yeah.

Drew Sanocki 00:32:49  I mean, this was a great I just started doing this out of nowhere on LinkedIn. Like, I’m just going to do a cost cutting tip a day. And it got so popular that I, we put it together in an e-book. I think it’s at like postpaid com slash turnaround or something like I’ll get you the link. But you know, it’s a good recap and a lot of that stuff is based on my time in private equity. A lot of it’s based on this book. Double your Profits in 30 days by this guy Bob Pfeiffer, who’s like an HBS professor, but it’s, you know, renegotiate every contract you have. Like, it should take an hour and a CFO should be on top of that, you know, move to off the shelf platforms, cut any IT projects that are longer than six weeks. You know, it’s just like the difference between strategic costs and non strategic costs at a business. Strategic costs are the ones that ultimately are going to lead to revenue things you know that you do really well that lead to revenue.

Drew Sanocki 00:33:34  And non strategic cost might be something like bookkeeping that you don’t need to you know. And so you’d be as a leader you should be willing to pay up and pay top of market for the strategic costs and really like reduce your cost on the non strategic things. So I mean those are a couple. But I think there’s like 30 or 40 in this book. So yeah I would encourage you to check it out.

Josh Hadley 00:33:51  Love it. Love those ideas. And it also sounds like you’re the person to follow there on LinkedIn. Always posting some valuable.

Drew Sanocki 00:33:57  But most of my stuff. Yeah.

Josh Hadley 00:33:59  Love it. drew, love this conversation. As we wrap things up today, I’d love to leave the audience with three actionable takeaways from every episode. So here are the three actionable takeaways that I noted. Number one, if you’re an Amazon brand owner right in your Amazon only right now, I think my encouragement to you is to continue doubling down on your business until you get to that eight figure mark. When you get to that eight figure mark.

Josh Hadley 00:34:19  Then I want you to begin that diversification process. And I say that because that was one of the biggest mistakes that I made, was trying to diversify myself too early when I was worried about some Amazon account suspension. And that never really was going to come to fruition because, like, I wasn’t doing anything against their terms of service. So double down on what’s currently working. I know what drew and I talked about, like there’s some fun, sexy things in here to be like, oh, it would be fun to get into this B2C game, but I promise you, like if you just get past that eight figure mark, you’ll then have the profits in the ability to go higher a level players, which drew just talked about to be able to execute on these. These are the strategic costs that drew had mentioned. So that’s action item number one. Action item number two is being able to reinvest in yourself and your brand. So looking at your overall marketing costs as a whole and being able to say, hey, this may not have a super high Roas out the door, but looking at it, you called it the marketing efficiency ratio, right? People refer to it as myrrh.

Josh Hadley 00:35:15  So look across the board. If you’re if you have DTC and Amazon and TikTok and you’re in multiple channels like begin optimizing for that marketing efficiency ratio so that myrrh. And then my third and final action item is what can you do to cut costs? I think that profitability. Andrew, you touched on this like so many people have been chasing the the revenue metrics. And my favorite phrase is revenue is vanity and profit is sanity. So if you focus on bringing in the profits to the business that’s going to allow you to grow, it’s going to afford you the opportunity to hire really smart people. It will also afford you the opportunity to continue launching new products that will get further growth in your business. As a CEO, you should be constantly focused on growth, the growth levers that you can pull in your business. And that all comes from the profitability that you’re generating in the business. So those are my three actionable takeaways for listeners. Through anything else that you feel like I missed that we need to give as an action item here.

Drew Sanocki 00:36:07  I think you got to try direct mail. When you’re ready, try direct mail. It’ll work wonders.

Josh Hadley 00:36:12  Yes.

Drew Sanocki 00:36:13  Very good point. The untapped channel, the big untapped channel out there is direct mail. And I think when you’re ready, shoot me an email and we’ll get you hooked up.

Josh Hadley 00:36:19  So, drew, on that note, when do when do you think people are ready for direct mail? How early is too early?

Drew Sanocki 00:36:25  You know, if I were just starting a new store from scratch, or if I’m only on Amazon, I probably wouldn’t bother. I’d say like rule of thumb is probably like 3 million. 5 million in revenue and up. That’s when we see it start to work. Higher AOV work better. You know, home goods, apparel, these kind of categories CPG I’ll do really well.

Josh Hadley 00:36:43  Is there a particular AOV like what’s your kind of like lowest AOV threshold you would be targeting.

Drew Sanocki 00:36:47  I mean I’d like to see over 100. You know, if you were selling like a $20 product, I probably wouldn’t lean in on direct mail or I’d bundle it together and do some things to get the AOV.

Josh Hadley 00:36:57  Okay. Great insights. Love that conversation, drew. All right. My final three questions for you here. Number one, what’s been the most influential book that you’ve read and why? You know.

Drew Sanocki 00:37:06  You mentioned one of them earlier that I had written down the e-myth, which I think was just so important for me. I was at a period of my life when I read that, where I was in the business, and I needed to work on the business so that that book was awesome. Perry Marshall’s 80 over 20 is really like an epic book talks about the 8020 rule for an entire book. But I mean, that’s informed a lot of my thinking around whales and minnows and treating customers differently. So any marketer, I think would do well to read 8020.

Josh Hadley 00:37:32  Love that. Great book recommendations. All right. Second question for you, drew. What is your favorite AI tool or ChatGPT prompt that you’ve been using?

Drew Sanocki 00:37:39  You know, I switched my default search on Chrome to perplexity. So perplexity is like the promises that it’s current.

Drew Sanocki 00:37:47  You know it’s AI, but current, right? Like searches the web. You can ask it some, you know, some chat like questions that you’d ask GPT or cloud or something. But it’s changed my life. Like, I just, I mean, you just get exactly the results you want. you can you can ask it to answer. How would you know? An Amazon seller or how would my customer ICP think about this question? You get answers back that way. So I’m a big fan of perplexity.

Josh Hadley 00:38:10  Yeah. Big fan. What are your predictions in perplexity in its ecommerce space coming up?

Drew Sanocki 00:38:15  I don’t know, but increasingly now, I mean, I think we all, for those of us who use it, it’s like they’re giving me I do a lot of shopping off of perplexity. So I, you know, I used to ask what the best, I don’t know, podcasting mic is and I end up on like a wirecutter page. But increasingly perplexity is doing a great job of kind of breaking it down and assembling reviews from all over the internet.

Drew Sanocki 00:38:34  And then you click through and it’s right on the purchase page. So I don’t know what they make an affiliate revenue off of that, but it’s kind of interesting to see them, going after Google shopping like that.

Josh Hadley 00:38:43  It will be very interesting to see how that, turns out over the next 18, 24 months, for sure. All right. Final question for you here, drew. Who is somebody that you admire or respect the most in the e-commerce space that other people should be following and why.

Drew Sanocki 00:38:55  You know, it’s like the guy I mentioned when we were before we started. He’s flown under the radar for probably like 15 years, David Hitchcock. So he’s on X now. He runs one of, if not the biggest e-commerce business I know of, selling filters of all sorts. Filter by com is one of his sites, but he’s got several manufacturers in the US, massive logistics business running it. and he’s just recently started telling his story. I think he’s, you know, he was involved in e-commerce fuel probably 15, 20 years ago, but went dark for, for a period of time where apparently he did nothing but grow his business and, and it shows.

Drew Sanocki 00:39:29  So he’s a great follow.

Josh Hadley 00:39:31  Awesome. Great recommendation as well. So another one to check out. Drew. If people want to follow you yourself, they want to learn more about post pilot and even implement some of that direct mail marketing strategies into their own business. Where can people find you? Yeah, I’m.

Drew Sanocki 00:39:42  Drew Sanocki on X or LinkedIn.

Josh Hadley 00:39:45  Easy enough.

Drew Sanocki 00:39:46  For you.

Josh Hadley 00:39:47  Thank you so much for coming on the show today. And we’ll drop all those links in the show notes.

Drew Sanocki 00:39:50  Sure thing. Josh, it was great being here. Thanks for having me.