Interview With Leo Plebani, Ecommerce Customer Retention ExpertLaryssa
In episode #199 of the Joy Joya Jewelry Marketing Podcast, I share my interview I share my interview with Leo Plebani, an ecommerce marketing expert who specializes in customer retention. Leo first entered the world of ecommerce when he was hired as an “Online Sales Manager” for a large Italian company based in New York. From there, he transitioned to being a freelance consultant, managing and scaling ecommerce companies to 7-figure revenues. He loves the world of ecommerce and invests in it both as an agency owner and as an entrepreneur by launching my own ecommerce projects. His approach to ecommerce marketing is both innovative and a little bit old school, making it unique.
We chat about:
- How can ecommerce brands improve customer retention?
- What are some ways that ecommerce brands can measure and monitor customer retention?
- What’s involved in your “secret formula” for boosting customer retention?
- Why is direct mail having a comeback now in 2022?
- What types of customers respond the best to direct mail?
- …and more!
Check out the episode files as well as the transcript below.
Laryssa Wirstiuk 00:08
Welcome to the Joy Joya Podcast, where “jewelry is joy” and everyone is encouraged to add more polish and sparkle to the world with topics ranging from marketing tips to business development, best practices, and beyond. This is the go-to podcast for ambitious jewelry industry dreamers like you.
Hi, I’m your host, Laryssa Wirstiuk. Through this podcast, I aim to empower and inspire jewelry entrepreneurs and professionals so they can thrive while adding more beauty to the world. I’m passionate about digital marketing for jewelry brands and I’m excited to share my passion with you. As we all know, “jewelry is joy”, so I’ll gladly seize any opportunity to talk about it.
This is episode 199, and today I’ll be sharing an interview with the founder of an e-commerce marketing agency focused on helping its clients retain their customers without being overly dependent on “broken online channels.” He has a proven technique for you to reach your customers with a 100% open rate with cost-effectiveness, and without any distractions from things like ads and emails. He also doesn’t rely on technology that you can’t control. I’ll share more about my guest in just a little bit. But here’s a little preview of what we’ll be discussing:
How can e-commerce brands improve customer retention?
What are some ways that e-commerce brands can measure and monitor customer retention?
What’s involved in your secret formula for boosting customer retention?
Why is direct mail having a comeback now in 2022?
What types of customers respond the best to direct mail?
… and more.
But before we get to the solid gold of this episode, I’d like to take a moment to remind you that this Podcast has both an audio and video component, so you can either listen on your favorite podcast platform or watch it on YouTube by searching “Joy Joya”. I love creating this content as my act of service to you, my awesome listeners and viewers, and you can support the Podcast for free by taking the time not only to subscribe but also to leave a rating and review on Apple Podcasts, which helps other jewelry dreamers find it too.
I want to read my favorite review of the week. “Snapchatter457” says, “Episode #148—Get Comfortable With Video Marketing for Jewelry—inspired me to create my first Instagram Reel showing my whole self.” First of all, that is awesome! And I’ll link to that episode in the show notes. Second of all, thank you! I really appreciate that. If you leave a review, I might read it in a future Podcast episode. Please let me know what you think about this episode or about any other major takeaways you’ve had recently.
I’m so excited to announce that the Joy Joya Podcast has its very first sponsor. After self-funding this Podcast since 2018 when I launched it, I’ve now decided to seek outside sponsors to help me build the resources that I need to keep improving upon this Podcast and make it better for you. I have big ideas, and those require funds and support. If you’re interested in seeing the sales kit and learning more about how sponsorship can help you reach a dedicated niche audience of jewelry business owners and leaders, please email me, Laryssa, at firstname.lastname@example.org.
This episode is sponsored by Chrysmela, maker of the most secure earring back in the world. If you’re not watching on YouTube, please visit the Joy Joya channel to see my demo of the only earring back that automatically fits, locks, and lifts all types of earrings. I am wearing them on my studs right now, and they are an absolute must for my jewelry wardrobe because I’m pretty hard on my jewelry and they ensure that my earrings are not going to get lost or fall out. Have you been seeking unique gift-with-purchase ideas for your jewelry business, especially with the upcoming holidays? Are you hoping to increase your average order value for any jewelry business that sells post earrings? Chrysmela is a high-quality solution that enables you to provide a better customer experience and instill confidence in your clientele.
Mayumi Ishii, the exclusive US distributor of Chrysmela, was even a past guest on the Joy Joya Podcast in Episode 71—if you’d like to check out her interview. Joy Joya listeners and viewers who are interested in learning more about partnering with Chrysmela can email Mayumi at email@example.com. Chrysmela offers white labeling as well as wholesale opportunities. That’s firstname.lastname@example.org. And please make sure to mention that you learned about Chrysmela through the Joy Joya Podcast.
In this segment of the podcast, I give out my Sparkle Award for the week. During this segment, I highlight a jewelry brand that’s impressing me with their marketing. The Sparkle Award is also interactive, so you can visit sparkleaward.com to nominate a jewelry brand that’s inspiring you these days, and I might feature your submission in a future Podcast episode.
So this article or this brand I learned about through CNET, and the title of the article was, “This Jewelry Store Lets You Order 3D-Printed Samples Before You Buy”. So this week’s sparkle award goes to Jenny Wu, a Los Angeles-based jewelry designer that leverages her background in architecture to create complex designs for her products. Jenny Wu has a brand called LACE and she prints the beautiful designs using selective laser sintering, or SLS—totally new to me. So, using lasers, her team can melt a powder into a shape as well as print them in a wax that can be cast from silver. The final product has different textures and grains. 3D printing jewelry is not a new concept, but I like what Jenny Wu is doing with her business model.
For most jewelry brands, rings are actually the most returned items since people aren’t sure of their ring size or how the ring will look on their hand. But LACE creates nylon versions of the most popular designs that customers can purchase for just $3 for one ring, and then the samples are sent to them in whatever size they want, and the customer can keep that sample no matter what. So, thanks to this technology, customers can get a feel for how the ring fits and looks on their hand. They’re lighter than a metal ring, but you can still get a sense of the fit and the overall style. It cuts back on expensive returns and ultimately improves the customer experience.
As I mentioned, you can visit sparkleaward.com to nominate a jewelry brand that’s inspiring you these days, and I might feature your submission in a future Podcast episode. Let’s discuss some recent news related to jewelry or marketing. Each week I share my thoughts about three relevant articles, and you can get the links to these articles by checking out the show notes.
The first article comes from Instore Magazine and it’s called, “Here’s Why Jewelry Retailers Should Care about Disney+ and Netflix’s Upcoming Ad-Supported Subscriptions”. So maybe you’ve dabbled in social media advertising or maybe you’ve tried Google AdWords. Perhaps you have an advertising budget. Maybe you haven’t seen success from that and you’re starting to wonder, “Can advertising work for me?” I think what this article is really putting across is that the potential for advertising and ad formats are really about to change and potentially open up new opportunities for jewelry brands.
Disney+ and Netflix are introducing ad-supported subscription options later this year, and advertisers are wondering how much ad spend will shift from traditional cable to these streaming platforms, or even from other digital advertising initiatives. They will likely have shorter ad breaks since Disney+ and Netflix would rely much less on ad revenue than, say, cable television. Since users of these platforms maintain accounts, the platforms would have access to different types of data, like [the following]: What types of shows do they watch? What types of interests do they have? This could potentially help brands who choose to advertise on these platforms have a more personalized and relevant ad experience.
This is a really great quote from the article: “Changing advertising so that it allows more personable levels of engagement and/or introducing new products based on interests could usher in a whole new world of relevant and, dare I say, desired advertising.” So the main takeaway from this article is that the world of advertising is really primed for change very soon. Even if you’ve tried advertising in the past and it hasn’t worked for you, I would say don’t fully discount it because advertising, ad formats, or modes of advertising are always changing. And I think that they’re about to change very much, very soon.
The next article comes from this publication called Passionfruit, which I’d never heard of before, but I really liked this article. So it’s called “Pinterest’s invite-only platform Shuffles is Gen Z’s new favorite app”. Shuffles is the latest app from Pinterest. It was first introduced on the App Store in August, and in just a few weeks it has garnered mass popularity among Gen Z users. But right now, just so you know, it’s invite-only, so not everyone can join. But I think there’s a lot of potential here, and it’s a really cool app. It’s a collaging tool that connects your Pinterest account and it allows you to create collages using pins on your boards. You can also search for pictures, add pictures from your camera roll, or use premade cutouts. Similar to TikTok, there’s a ‘For You Page’ on this app, and it becomes more refined as the algorithm gets to know you and the more you use it. If you remember the days of Polyvore, then you’ll be really familiar with this Shuffles app because it kind of borrows a lot of features from there.
It’s really inspiring its users to connect over mutual interests and artistic likes. I think the cool thing about this new direction that Pinterest is going in—at least right now—is that it seems like it’s less about ego and showing off and more about people creatively collaborating and just being inspired by each other. So my main takeaway from this article: I’m not sure how brands will end up utilizing this platform or if they’ll really be able to, but it seems like a home run for jewelry brands, especially for brands who back in the day would utilize Polyvore for mood boards or outfit inspiration. So I think there’s a lot of potential here with Shuffles.
The last article comes from Retail Brew, and it’s called “For luxury brands, resale is almost an inevitability”. Apparel brands, you’ve probably noticed, are really starting to embrace resale as part of their strategy. This is a great quote from the article: “The bulk of luxury resale goes through consignment shops or digital marketplaces like The Vault, The RealReal, and Hardly Ever Worn It (HEWI), though some luxury brands, like Oscar De La Renta, are launching their own in-house resale sites.” Secondhand is expected to grow by 126% into a $218 billion industry by 2026, according to ThredUP’s latest resale report. [Interestingly,] 74% of retail executives are now more willing to offer resale to their customers, up 14% from 2020. Luxury retail is “just a matter of time,” says Sasha Skoda, who is the head of merchandising at The RealReal.
So what is the main takeaway from this article? I would say ask yourself, is there a way that you can incorporate this into your jewelry brand’s business strategy? When you kind of let go of resale and allow other vendors to sell your products on the resale market, it really takes the power of brand storytelling away from you, because you no longer have control over it. Perhaps the person reselling your product doesn’t even know anything about your product, so you just lose that control.
I would really recommend if you’re interested in this to go back to my interview with Tammy Cohen because we talk a lot about valuation and how important brand story is to valuation. That gets even more amplified when a product is being resold on a place like eBay or The RealReal or something of that nature, so this is a really important thing to keep in mind. For more information about any of these articles, please check out the links provided in the show notes.
As I mentioned earlier, my guest today is an e-commerce marketing expert who specializes in customer retention. Leo Plebani first entered the world of e-commerce when he was hired as an online sales manager for a large Italian company based in New York. From there, he transitioned to being a freelance consultant, managing and scaling e-commerce companies to seven-figure revenues. He loves the world of e-commerce and invests in it not only as an agency owner but also as an entrepreneur who has his own e-commerce projects, so he’s out there in the field doing these things himself. His approach to e-commerce marketing is both innovative and a little bit old-school, making it super unique. Without further delay, let’s chat with Leo.
Laryssa Wirstiuk 15:07
So, Leo, tell our listeners and viewers a little bit about your business, DTC GANG. What is it all about?
Leo Plebani 15:15
Yes. So first of all, thank you for having me on the show. This is the name of my agency, where we basically help other businesses to grow their online channels, specifically in e-commerce. So DTC [was chosen] because we are focused on DTC brands, [which stands for] direct-to-consumer. That’s basically what we do. We mainly operate in the US market even though we have other businesses not in the US but in Italy. As you can tell by my accent, I’m from Italy. So, GANG is the agency where we manage and grow e-commerce [businesses], which can be somebody else’s business, or it can be our e-commerce. So that’s what it means.
Laryssa Wirstiuk 16:11
How did you first get into e-commerce? And how did your career path evolve since then?
Leo Plebani 16:17
Yes. So first of all, I’ve always been passionate about business since I was young. I remember my friends were passionate about soccer, football, or sports. I was never interested in anything but business, so I was reading business books. I’ve had a pretty clear mind since I was young about what I wanted to do; I wanted to own my own business; I wanted to do business. So I studied in Italy at a college where I studied economy and commerce, which is business administration in the US.
Leo Plebani 16:55
After college, I got a job offer in New York City. And actually, back then I was like: “I will never work for somebody else. The only reason why I’m going to work for somebody is that I’m going to work in New York City in an office where I can see the Empire State Building.” And I don’t know what happened or how it happened, but it actually came true. So I got this job offer; I moved to New York. I had an office on the 21st floor, and I was in front of the Empire State Building. It was kind of a dream come true. So I moved to New York in 2014 and then I worked for this company for five years.
Leo Plebani 17:38
Then in 2019, I decided to leave the company and my job and actually started two businesses. First, I started the agency, which back then was not really an agency. It was just me being a freelancer and helping mostly other Italian companies in the US grow their online channels with Amazon and e-commerce. I also opened an e-commerce [store] in Italy. It’s still active; it’s called Jerry America, and we sell American food in Italy. We have the whole operation—a warehouse. Then since 2019, basically, I’ve been on my own doing my own projects online and loving it.
Laryssa Wirstiuk 18:26
What’s the most popular American food you sell in Italy?
Leo Plebani 18:32
The best seller is M&M cookies. It’s a cookie made with M&M’s. The top five, I guess: Cherry Coke, because we don’t have Cherry Coke in Italy, they just have regular Coke. We also sell Fluff, the marshmallow cream—it’s a big seller. Yes, those are, I think, the top three, at least.
Laryssa Wirstiuk 19:03
That’s so interesting.
Leo Plebani 19:05
Yes, it’s unique.
Laryssa Wirstiuk 19:08
So, your agency focuses a lot on customer retention in e-commerce. Is that correct?
Leo Plebani 19:15
Yes, correct. The first clients that we got, we were actually doing everything for them. So we were doing their website, we were doing customer acquisition with media buying and email marketing and stuff. But lately, we have been really focused more on the retention part of e-commerce.
Laryssa Wirstiuk 19:35
Why have you found that that’s so important and why have you niched into that space?
Leo Plebani 19:41
I think it’s important now more than ever just because the online marketing agency ecosystem is changing so much—especially after the iOS 14.5 update—where we basically saw that the cost of acquisition was going up and the overall marketing spend was not as efficient as it used to be. We had these e-commerce [stores] with a big list of past customers. So we’re like: “Okay, instead of focusing on acquiring even more customers, let’s fix the retention first because that’s the lowest hanging fruit. We know those people are interested in our brand; they know our products, so let’s fix the retention first.” So that’s what we’ve been trying to do with the agency.
Laryssa Wirstiuk 20:40
That makes so much sense. So for an e-commerce brand that’s already in existence and maybe they want to know how they can start focusing more on customer retention, what are some ways that they can be measuring and monitoring this key performance indicator?
Leo Plebani 20:55
Yes. So let me go back very quickly to the first question because I think there are some interesting statistics to [share]. In general, for example, 44% of businesses focus on customer acquisition while only 18% focus on retention. Even though the probability of selling to an existing customer is 60% to 70%, the probability of selling to a new customer is between 5% and 20%. So you already see why the low-hanging fruit is in retention. Then [something] like 50% of existing customers are more likely to purchase the new products that the business launches. Also, existing customers are 30% more likely to have a higher average order value. So those are important metrics to keep in mind.
Leo Plebani 22:02
In general, most businesses don’t really make a lot of profit on their first sales, so the lifetime value of the client becomes very important to basically unleash the profit that the customer is going to get. So how do we measure customer retention? Usually, the e-commerce platform that somebody uses already has a system in place to measure those. We work mostly with Shopify, so you just have to go to your dashboard and check the returning customer rate metric. That’s where you see what percentage of the customers in a specific period came back.
Leo Plebani 22:54
The formula is basically like [this]: if you look at a period, let’s say you have 100 orders [of which] 30 customers have made those orders; those 30 customers have made one or more orders. That means that they are returning customers. So the customer retention rate, in this case, is 30%. However, you should not only look at the retention rate in percentage, but you should also look at the retention rate in absolute value, because let’s say you do a promo next week, and maybe you have a lot of customers returning—customers coming back—however, the retention rate is lower because you’ve acquired a lot of new customers. So we always look both at the percentage and the absolute number. We want to have the absolute numbers that grow because if that grows, it means that you’re doing customer retention right. If the percentage grows, it can mean a lot of different things. It can mean that you’re not acquiring new customers, and so from one side it’s like, “Okay, the retention rate is growing; it’s good.” But it’s actually not that good because you’re not acquiring customers. So we always look at both numbers.
Laryssa Wirstiuk 24:18
Is there a healthy average retention rate or does it vary by industry?
Leo Plebani 24:25
It does vary by industry, but if you look at an average, it is usually around 20%. But really, you should look at your industry and see what it is in your industry. [As] an example, if somebody is selling supplements, it is probably going to be higher than 20%. If somebody is selling TVs, it is probably less just because the time between purchases is much higher for TVs than for supplements. So you always have to look at your own industry to see what the numbers are. Maybe you can search online by industry type and then, eventually, you start to get a feeling about what the numbers should look like.
Laryssa Wirstiuk 25:15
Yes, I’m not sure in the jewelry industry—off the top of my head—what the benchmark would be. But I imagine that even in the jewelry industry, there are a lot of different price points. I would imagine that for a lower-priced product, it would be easier to have a higher retention rate than for somebody selling multiple $1,000 pieces.
Leo Plebani 25:35
Yes. For example, if you sell only engagement rings, it should be lower than somebody selling a necklace or everyday jewelry.
Laryssa Wirstiuk 25:48
Yes, that makes a lot of sense. So for listeners and viewers that are sold on this idea that customer retention is important, what would be the first steps in trying to develop this strategy to increase the customer retention rate?
Leo Plebani 26:05
What we usually do is start by analyzing where the business is at the present moment, so we’re going to dive deeper into the numbers. Then the next thing is that we want to set some goals and we want to see what the absolute return rate is going to be like. So let’s say, we’re like: “Okay, last month we had 40 clients come back. Next month, we want to have 50 clients come back.” So we have a goal. Then from there, we start to think: “Okay, how can we do that? What are some specific strategies that we can implement—looking at different channels—and reach the goal?”
Leo Plebani 26:57
So, I think the first thing is to understand where you are now, set some goals, and then come up with strategies. For example, you have to understand the customer life cycle and what the touch points are that they have with your brand. So let’s say somebody places an order today. What are the next marketing messages that we’re going to send to them? And how can we improve them to make it more convincing for them to come back?—so we can reach the goal for the next month, for example.
Leo Plebani 27:38
Then I will look into segmentation, which is really important. Make sure that you speak to each segment the way you’re supposed to speak to them. Just [as] an example: if you have a segment of customers that placed one order, you should communicate with them in a different way than if you have a segment of customers that placed more than four orders because those people know your brand—they’ve been back. Think of it like [this]: you have a physical store where you sell bread, and you have somebody that comes in for the first time; you may have a different attitude [toward] somebody that comes in every day, and you know their first name, and you know their whole family; so you may engage in a different conversation with them versus first-time customers.
Laryssa Wirstiuk 28:29
That’s a great analogy. I like that a lot. So I know that your agency uses a mix of different types of mediums to engage these customer touchpoints, like email marketing, direct mail, and strategic inserts. Can you talk a little bit more about why it’s important to have this mix and what that means or looks like?
Leo Plebani 28:51
Yes, first of all, generally in business, enemy number one is actually the number one. So you don’t want to rely on one thing. You don’t want to rely on one marketing channel, on one client, or on one supplier. So the retention marketing system that we use always relies on multiple channels, but we always think of the customers and of all the channels and how each one is interacting with the client. For example, online, we use email marketing, SMS, and notifications. Then, of course, we use social media, like Facebook ads, etc. Offline, we use mostly direct mail, which is a new channel that we actually implemented in Q4 of last year and is giving us great results. We also look at inserts. By inserts, we mean the things that we put inside the package that we’re going to ship to them. Maybe I can explain it a little bit more.
Leo Plebani 30:00
Basically, the first thing for us is, as I mentioned before, segmenting the customers. So, orders equal one versus orders equal four. Then, [it’s important to] understand all the messages that we send to them. For example, [if an] order equals one, we have a post-purchase flow between emails and SMS that goes out for 15 days. And then we may have a win-back campaign that goes out on day 45.
Leo Plebani 30:31
So, we are looking at that, and we’re also looking at how we can implement other channels on top of that. So how can we maybe send some notifications? And, most importantly lately, how can we send them some postcards, some direct mail? So let’s say that the communication ends on day 60. We may have something in place for day 80 to day 365 mostly with postcards. So you map out the whole marketing message that you’re going to send out, and you also try to make it as cost-efficient as you can, because in general, for example, email marketing is cheaper than sending a physical direct mail piece. So we want to try to make the second sale with the emails. When we can’t, then we implement direct mail.
Leo Plebani 31:31
Another thing that we look at are inserts, which I think is one of the channels that people don’t really look at. It’s the one that makes the most sense to us because we are paying for the shipping to send those products to the customers, so we want to make the experience as good as we can. We want to make sure that we do everything in our power to get them back or get them to do something that we want to do. For example, let’s say you have a loyalty program on your e-commerce [site]. What you can do, for example, is segment people that are registered versus people that are not registered. For people that are not registered, you can insert a piece of paper, a flier, or a postcard in the box saying: “Hey, I see you’re not registered for our loyalty program. Make sure you register now because you’re going to lose points. It’s free, and it only takes two minutes. Point to this QR code with the camera, and go back and sign up now.” Or, for example, let’s say we have a plan for people to come back a second time, so if orders equal one, we’re going to put another piece of paper inside, saying, “Hey, thank you for your first order. We really appreciate new business”—this kind of stuff. And then you can say, “We have a special gift for all the people that place a second order within 30 days, so make sure you come back.” Then, of course, when you have an order that equals two, you put the gift in. So you have to have the backend in place to actually [keep] your promises.
Laryssa Wirstiuk 33:23
Those are all really great suggestions. I was just curious; I was thinking when you were talking: is there ever a point in a customer retention outreach where you give up, like, if someone is just not ordering again? When do you stop reaching out to them?
Leo Plebani 33:40
You don’t really stop because those people are also going to be in your email campaigns, and those can be seen as [part of] a retention strategy. But in general, the good thing about direct mail is that people can unsubscribe from email, but they can’t really unsubscribe from direct mail. So we have in place a win-back campaign with a great offer on day 720 after the last purchase. So that means two years [later], we are just going to send them a postcard with a great offer to get them back. I think that’s probably the last resort for our system—not considering the email campaigns that we still send.
Laryssa Wirstiuk 34:33
Sure, unless they unsubscribe, of course, from email.
Leo Plebani 34:37
Yes. Another good thing that we’re always doing with postcards is that we’re sending, for example, a campaign to people that have a birthday in the next seven days. So they get a happy birthday postcard with a discount code or a promo, or whatever you want to send. Those really work because people don’t really get happy birthday postcards from brands—mostly from friends, maybe.
Laryssa Wirstiuk 35:10
Yes, definitely. I feel like there was a period of time, maybe 8–10 years ago, when I was getting a lot of happy birthday postcards from brands, especially those that I was a VIP or was a frequent customer of. And then, for some reason, I noticed that it stopped for a very long period of time. I wonder if people were focusing more on email and SMS. But I think what you’re saying is that it’s really making a comeback in the last few years.
Leo Plebani 35:39
Yes. Direct mail—I don’t think it’s making a comeback yet, but I think it’s eventually going to. What happened is that there used to be a lot of direct mail back in the 90s [and early] 2000s, then online marketing came [along], so big companies started to slowly switch budgets from offline [marketing] to online. Now we are at a point where offline [marketing] has kind of disappeared—not completely, but it’s not what it used to be. So I think there are very good opportunities for marketers now to jump on it for a couple of reasons that maybe I can explain a little bit later.
Leo Plebani 36:23
I don’t think he’s making a comeback yet, but I think it’s going to happen eventually just because brands are going to start realizing: we’re paying for people to join our newsletter, but then they unsubscribe; but we paid for them to acquire the customer, so how can we do it? That’s actually how we came up with that. We had a very big list of past customers, like 2000+ customers. Most of them didn’t open the emails or [they] unsubscribed from the emails, so I was like: “Okay, we can’t really reach them online. I mean, we can try with a custom audience on Facebook, etc. But they haven’t really been working lately. So how can we communicate with them?” And we’re like, “We have the address that we ship the products to, so we can send them some direct mail.” That’s the test that we did, and the results came back and were really awesome. So we decided to dive into direct mail, yes.
Laryssa Wirstiuk 37:29
Yes, that’s fascinating. Are there certain types of customers who respond better to direct mail than others? Or does it really work across all demographics?
Leo Plebani 37:40
Okay, so first of all, we are using direct mail for past customers, people that have purchased, and for cart abandoned [individuals]—so people that have been interested but haven’t completed the order. Of course, the lower you go in the funnel, the better the results usually are. But for customer acquisition, I don’t think direct mail is still as effective as the online channel, so we’re only using it for direct mail. In general, what we saw—and this makes sense—is that the more people have engaged with you in terms of the number of orders, the more effective the campaigns are going to be. For example, a great segment to test is people that have purchased more than four times but haven’t purchased in the last 180 days. So we’ve seen, even with a very small discount, a lot of people just come back because they are their loyal customers. They may just need a little push instead of a big promo to come back.
Laryssa Wirstiuk 38:50
Yes, that makes a lot of sense. So in case people are not convinced yet about direct mail, I know that Leo, you have some top reasons why brands today should be engaging in direct mail marketing. Can you tell us what they are?
Leo Plebani 39:03
Yes. First of all, you can reach your clients offline. I mentioned this, right? If someone unsubscribes from your email list, or if they don’t open emails, they can be the best customers in the world, but they’re not going to see your message. So you can reach them offline with direct mail. Then another good reason is that you don’t want to really rely on technology you can’t control. This means that if tomorrow your Facebook ad account gets banned, or if Gmail marks your email address as spam, there is really not much you can do; you’re relying on the technology of other people that you don’t control. [With] direct mail, you’re relying on the old USPS mail system that has been around for centuries, and it’s very reliable—so that’s another reason.
Leo Plebani 40:02
Then [there’s the factor of] the empty mailbox. As you mentioned before, 10 years ago, you used to get a lot of direct mail pieces, and lately, you’re not getting as many. That’s an opportunity because all these big companies are switching budgets from offline to online. So for us smaller brands, it makes sense to do the opposite and get the attention that a direct mail piece can give you. Then you can avoid the online competition because customers are literally bombarded every day with a zillion ads and emails, so distraction is just one scroll away. Instead, when they pick up your postcard and they read your offer, you have 100% of their attention—there is not another ad one scroll away.
Leo Plebani 41:00
Then, it’s cheap and scalable. With just a few cents per piece, you can really send a lot of postcards to clients in a way that you wouldn’t be able to reach them otherwise. So it’s scalable and it’s cheap. Then you have a 100% open rate. So if you’re doing email marketing, the average is a 24–25% open rate. What happens to these other people that are not opening [it]? Nothing, they’re just not getting your message. However, when you send a postcard to them, the open rate is virtually 100% because they’re going to get it, they’re going to maybe look at it and say, “Okay, I’m not interested,” but they’re going to open it and they’re going to read it. Then it’s up to you to make the headline, the offer, or these kinds of things, inviting enough for them to move on with your request.
Leo Plebani 42:06
Then another good reason is the rising CPM costs versus mailing costs. If you’ve been in online marketing long enough, you’ve seen that every year, no matter what, the CPM has been going up while postage has still been going up but not as much. Then the other thing is, what happens if on Black Friday, for example, your CPM goes up 200%? There is nothing you can do about that; it’s not in your control. Yet the mailing cost, even during Black Friday, is going to be the same, so you don’t have that problem.
Leo Plebani 42:50
Then another good reason is that you stay top-of-mind for longer. So, statistically, a piece of direct mail will stay within your customer’s physical space—let’s say on the kitchen table or the counter—for seven days before getting discarded. So this means that every time they see that piece—that postcard, that piece of direct mail—they’ll think of you. Instead, when they see an ad on Facebook, I wouldn’t be surprised if they’re going to just forget it after two scrolls. So you stay top-of-mind longer. Then, another reason is that you’re standing out because, for example, I don’t think a lot of other DTC commerce brands are doing postcard marketing—direct mail marketing—so the mailbox is going to be emptier, so you’re going to stand out.
Leo Plebani 43:53
Then another reason is that you’re going to have a personalized experience because, for example, you can add custom fields in the design of the postcard and you can add the first name. So, for example: “Hey Frank, I’ve seen you haven’t come back in a long time. Here is a discount.” So you can add that personalized touch. Then another good reason is that the spam law doesn’t apply. That means that there is no restriction on sending postcards because the CAN-SPAM law only applies to emails. So, that means that your customer is going to see your direct mail no matter what. Then the last good reason is that technology [has] advanced. For example, now you can send handwritten postcards, which work very well. Basically, there is a robot that is using a pen to write a direct mail piece, so the feeling is like a person wrote it. That’s a cool thing that we’ve been testing, and it’s working very, very well.
Laryssa Wirstiuk 45:12
Yes, I actually had, in a past episode, the founder of one of those companies that does handwritten cards. I’ll have to link that in the show notes too because it’s a really interesting technology.
Leo Plebani 45:23
Yes. For example, we’re using the handwritten notes on different occasions that I mentioned. One is for first-time customers. If they have an average order value that makes sense for us, then we’re just going to send the handwritten card saying: “Thank you. Welcome to the family!” It makes a difference. And then, to VIP customers that haven’t been back for a long time, you send them the written postcards. It’s nice.
Laryssa Wirstiuk 45:52
Yes, definitely. I really like what you said about the CPM and how it can change at different times of the year. So basically, that refers to the cost of advertising for people who don’t know that. I think it’s so relevant for the listeners and viewers because in jewelry, there are definitely times of the year where there’s a heavier order volume—especially like Black Friday, or like you said, around certain holidays—where the competition just gets so high that those costs do fluctuate. And I never even thought about that with mail; it just stays the same all the time, so it’s not dependent on demand or anything like that.
Leo Plebani 46:35
Yes, you’re right. Plus, the reason why CPM is going up is that all those big companies are switching budgets from offline to online, so eventually they’re going to keep going up. With postcards, you just pay for the mailing costs and that’s it; it doesn’t matter if it’s Christmas or Black Friday, the cost is the same. So it makes a lot of sense.
Laryssa Wirstiuk 47:02
Yes, that’s a great point. What are some of your favorite tools and resources that you’re using for direct mail? Can you recommend anything?
Leo Plebani 47:12
Yes, so we are a premium partner with PostPilot. Think of it as a Klaviyo or Mailchimp for direct mail. It’s a platform where you connect your Shopify stores, and you are able to create designs to add custom fields. For example, the first name that I was mentioning before—you can just click “Send Campaign” and they will take care of everything. You can also create automatic campaigns more like flows. For example, if the order equals one and it’s been more than 180 days, it sends the offer, so it’s an automatic flow. So yes, we are partners with them. We also have a very nice promo for people that want to give it a shot: we can offer 1000 free postcards, and then we can also help with understanding the offer, the segment, the design, and this part. So yes, we use PostPilot.
Laryssa Wirstiuk 48:22
Great! How would they be able to take advantage of the offer?
Leo Plebani 48:28
I can send you the link to share below. But they can just reach out to me and I can make it happen for them.
Laryssa Wirstiuk 48:40
Great. So I’ll put all that information in the notes for everyone too, so they can take advantage of it.
Leo Plebani 48:45
Laryssa Wirstiuk 48:47
I learned so much about customer retention and direct mail today. It was super interesting to hear about your experience and what you do with clients. I really appreciate you sharing all that. Tell me, Leo, what’s coming up for your business on the horizon? What are you excited about?
Leo Plebani 49:05
Yes, so we have been focusing on three different aspects. The first one is continuing to support other businesses with the agency, so helping them improve [customer] retention and improve their overall e-commerce performance. Then we have been focusing on launching new brands for our own e-commerce. I’ve also been looking into e-commerce acquisition lately, because I’ve seen that there are a lot of opportunities out there to get an e-commerce [store] that is doing good but that’s probably not doing everything. [The idea would be to] acquire the e-commerce [store] and implement the things that we know how to do and own the business. So those are the three things that we’re looking at right now.
Laryssa Wirstiuk 49:57
That sounds really exciting!
Leo Plebani 50:01
Yes, we’ll see how it goes.
Laryssa Wirstiuk 50:04
Well, thanks, Leo. I appreciate your time. It was great to have you as a guest!
Leo Plebani 50:09
Well, thank you for the opportunity. It was a pleasure!
Laryssa Wirstiuk 50:15
What did you think of my interview with Leo? To learn more about his agency, visit dtcgang.com. Also in the show notes, I’ll put the referral link to PostPilot so you can get a discount on sending your own postcard campaigns. I’ll put additional links for you to contact, get in touch with, and connect with Leo.
Laryssa Wirstiuk 50:39
You can always email me, Laryssa, at joyjoya.com. If you love this Podcast, please share it with a friend who’d appreciate it. And don’t forget to subscribe as well as leave a review on Apple Podcasts. To purchase a signed copy of my book, Jewelry Marketing Joy, visit joyjoya.com/book for more information.
Laryssa Wirstiuk 51:03
Thanks for listening. Remember to subscribe so you never miss an episode. For more information about working with Joy Joya, visit joyjoya.com, where you can sign up to download our free eBooks about various topics in jewelry marketing.