Sales Hustle is now Sales Transformation
Oct. 27, 2021

#181 S2 Episode 50 - From College Kid to 8-Figure Exit And SaaS Founder with Michael Epstein

In this episode of the Sales Transformation Podcast with Collin Mitchell, he is with Michael Epstein, CMO at Axle Holdings, an investor in eCommerce & SaaS, and a board member & principal of PostPilot.

Customer acquisition or customer retention? The answer is easier than you might think, listen to how Michael shares just how important customer retention is to create long-lasting revenue for the company and more on this podcast episode!


Want to read rather than listen? Here's a two-three minute read that covers the entire podcast topic: How To Create Brand Ambassadors 🚀

HIGHLIGHTS

01:11 The beginning of Michael's sales journey in the early days of 2000 and where he is now

04:46 True moments where Michael had almost had to stop what he was doing but how he was able to jump from that ledge successfully

06:37 What Michael experienced with online retailers and how he was able to bring it to his own company and beyond

11:32 Customer Acquisition vs. Customer Retention

14:41 How Post Pilot started and where it is now

19:55 Final thoughts and where people can get started for Post Pilot and connect with Michael

QUOTES

07:13 "It was interesting to look under the hood of how these eight or nine-figure brands really operated and for the entrepreneurs out there who think 'Gosh this hundred, two hundred million dollar companies must just be running like clockwork.' When you look under the hood, a lot of times it's a lot messier than you would think."

09:13 "One of the core advantages of Post Pilot is it makes sending direct mail as easy as setting up an email campaign or an automated flow. Where you can set triggers based on behaviour, you know? Like it's been more than sixty days and they haven't come back, trigger a personal card to go out to them."

11:03 "Most businesses think they need more customers, but what they actually need is more revenue. So, your existing customer base, and I'm not saying take your eye off customer acquisition, absolutely do that. But before you go out and keep spending on your customer acquisition, you gotta make sure that retention model is at least dialled in where you know when you acquire a new customer you've got a better chance of retaining that customer over time."

18:22 "It's really cool. There's nothing that beats receiving a hand-written card in the mail in an envelope, with a stamp, hand-written address on it, opening it up, and seeing a personalized card inside? Whether it's from an e-commerce store to a salesperson who just did a demo for a product to a prospect and what's to send a follow-up note ... you can do it in minutes, it's personalized and an unforgettable experience."

19:16 "It's hard to compete on just features and value propositions because your competition can copy that. If you create an unforgettable brand experience and surprise and delight your customers ... that's what's gonna be memorable, that's what's gonna create loyalty, and that's what's gonna keep them to keep coming back to you and keep doing business with you for a long time." 

Learn more about Michael:

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Transcript

#181 S2 Episode 50 - Michael Epstein

[00:00:00] In the world of sales, you either sink or swim or breakthrough to the next level. My name's Colin Mitchell, and this is sales transformation, a new kind of sales show designed to bring you through the epic life-changing moments of elite sellers. So you can experience your own sales transformation.

[00:00:24] All right. Welcome to another episode of sales transformation today. Fantastic guests. That's doing some awesome things that I'm very excited to dig into. Um, I've got Michael Epstein and he has spent the last 20 years in e-commerce bootstrapping his first online retailer to eight figures and a successful exit.

[00:00:42] He went to then lead multiple eight and nine figure private equity owned online retailers, where he leveraged his direct mail to boost customer acquisition. And retention. And now he is the principal at post pilot, a SAS platform driving, uh, increased revenue, retention, and profits by creating individual personalized, targeted postcards and handwritten cards.

[00:01:03] Efforts, Lee effortless. At scale, Michael, welcome to the show. Thanks for having me call. Yeah. Wow. A lot to unpack there in the bio. Tell me, uh, just, um, let's jump right in. We kinda, uh, when I learned a little bit more about the exciting things that you're doing, we kind of nerded out on that and I was like, oh man, we got to hit record and get this stuff out there.

[00:01:24] But I love the stuff that you guys are doing. Tons of accomplishments. Let's sort of start at the beginning. Like when did you start that first company? Uh, what led you to that? And then we'll take it from. Sure. I started my first company in the early days of e-commerce back in 2000. Uh, I was an online retailer manufacturer of, uh, gaming accessories, mostly for the computer and video games grew that over the next dozen years.

[00:01:51] Um, and as you mentioned, exited that in 2013 to private equity. And then I got involved in this private equity operating role where. Um, either advising or operating a lot of the port, the online, um, retail portfolio brands owned by a number of, uh, private equity funds, uh, worked as CMO as for a number of, um, eight and nine figure online retailers.

[00:02:18] And as you said, S was using direct mail, uh, successfully at a number of those properties and just was looking for an easier way, but then involved. Spreadsheets and CSVs and imports and exports and finding a print house and trying to figure out how much ROI was there. And, um, myself and my business partner, uh, and a third co-founder founded post pilot, uh, about three years ago and made it super simple to send personalized, direct mail, uh, automate automatically.

[00:02:53] Wow. Okay. So let's go back. What were you doing before you started that first company? Was there any thing that you learned or skills that you acquired that you took into that that really helped you have that level of success? Well, I started the first company out of my college dorm room. So it was. I was actually working at the time, uh, at a consulting firm while finishing college, and then started that as like a side project.

[00:03:21] And it took off pretty quickly. And ultimately the co timed, uh, the timing worked out well because I was graduating college and my parents were. Basically not going to help me out. So it was either make this company work or go get a real job. And fortunately, we, we grew really quickly, uh, at that company, I was able to print.

[00:03:43] Wow. Okay. I'm very interested in that. So you started it as a side gig in college and, uh, it was successful enough that you never had to go get a real job or not. They're running the company is not a real job, but, uh, you never, you know, officially had to work for anybody. Uh, exactly. Exactly. Yeah. One of those things where your parents still 12 years later still couldn't tell you what I did, but at least they knew I wasn't starving.

[00:04:10] Yeah. Yeah. I don't know what he does, but, uh, we don't have to support them anymore, so we don't care. Yeah. Uh, so I I'm, I'm just taking a guess here, but I'd love you to kind of fill me in, um, you know, I'm, I'm assuming, you know, fresh out of college. Successful business. I mean, where you just learning and figuring out things kind of as you went along.

[00:04:33] Yeah, definitely. I mean, certainly breeding as much as I could consume, but it was, it was trial by fire on a lot of different things, learned a ton along the way. And I think that's what really helped me evolve my career after I sold that company and start to take on these roles that a lot of these larger firms, uh, fund, uh, larger companies and run larger.

[00:04:56] Yeah. Was there any moments where you're like, oh, I just, you know, was there any like close calls where you felt like you might have to shut the. Yeah. Yeah, for sure. Especially like in that oh, eight timeframe, uh, you know, that was a time where we were actually looking to potentially exit the company. Um, we had grown it successfully and it was, you know, we were looking at, at possible a possible exit there.

[00:05:20] And then all of a sudden, the economy just tanked and it was from looking at a nice exit to just making sure the doors stay open and wait for the types of. Yeah. And PR and prior to the accident, had you raised any money or was a full boot, bootstrapped, bootstrapped all over. Wow. Okay. Uh, I'm always impressed with that.

[00:05:40] Uh, I, uh, bootstrapped to my first company as well with my wife. We built it to 5 million in 26 months and it's awesome. And it's crazy. I mean, like, you know, there's a lot of companies that raise money in, in, in, you know, I've, that's not the world that I live in and, you know, there's always a big party and celebration and announcement.

[00:05:59] Uh, like it's an accomplishment, but I just have more respect for bootstrapping and, you know, uh, Making sales to grow the business. Yeah. Got a hustle for sure. It's, it's been, uh, definitely a bit of a mindset shift now that working with private equity backed companies, because, but it is different. It's still, you still got hustle.

[00:06:20] It's different than working with venture back companies where you've got. Kind of a little bit more of a open pocket book, bear and it's growth at all costs, private equities. You still gotta be really diligent about that. They're looking for value creation and, uh, it's not venture money. So, um, still, still got.

[00:06:40] Yeah. Okay. And so then, um, when you did S you know, end up selling that first company, and then you went into, um, venture, uh, what were you doing there? You know, what experiences did you learn that kind of took you into your latest, you know, thing that you're doing? Sure. So, um, it was working with mostly online retail.

[00:07:02] Uh, doing either advisory work, helping them develop an online strategy or, um, improve their, prove the strategy that they had in place. Uh, and serve the CMO of a portfolio of online retailers that service the aftermarket automotive, um, market. And yeah, I mean, certainly learned a ton, uh, at, at each organization, certainly on the consulting side.

[00:07:30] It was interesting to get a look under the hood of how, you know, these eight, nine figure brands really operated and, and, you know, for the entrepreneurs out there who think like, gosh, these these hundred, $200 million companies must just be running like, like clockwork, right. And everything is just, just efficient and great.

[00:07:48] When you got to look under the hood a lot of times, uh, it's, it's, it's a lot messier than you would think. So that was kind of eyeopening. As we started working with a lot of those brands. Yeah. Any, any notable brands or like, you know, big successes that you could highlight for us that you, you know, did good work for, uh, during the.

[00:08:08] Sure. Um, we acquired a online Jeep retailer called Morris four by four doubled revenue for that business in less than a year. Uh, acquired another business called Leonard accessories, which is a online retailer of aftermarket truck products. We tripled that in, in under 90 days, and these are pretty sizable companies, you know, eight, nine figure businesses.

[00:08:33] So. Uh, there's a lot of movement, uh, for a company that's already of that size in that short of a timeframe. Yeah. I mean, what kind of, what kind of things are you implementing, uh, to get, you know, that sort of success in such a short period of time with brands like that? So doubling in a year, tripling in, in like 90 days, like what it was implemented and what happened to have that sort of growth.

[00:09:00] Yeah. I think a lot of it is just implementing. Oh, a lot of the life cycle marketing playbook that we've developed over the years that I started in my businesses. And I've kind of always rolled out since then my partner, uh, and always been, uh, heavily into lifecycle marketing as well. And I think that's also what really attracted us to.

[00:09:21] How to implement that sort of lifecycle marketing strategy using a channel that's not as saturated as email and digital ads right now. So kind of one of the core advantages to post pilot is it makes sending direct mail as easy as setting up an email campaign or an automated flow where you can see.

[00:09:43] Triggers based on behavior. You've, you know, it's been more than 60 days and they haven't made, they haven't come back, trigger a PR a personal card to go out to them, um, or a handwritten card to go out to them. They spent more than $500. Let's thank them with the VIP card. Like those are the strategies that we applied across multiple touchpoints email, pivoted that into custom audiences on social, really develop that retention, uh, that retention flywheel to where.

[00:10:13] You know, uh, we're, we're paying up so much for customer acquisition. The profits come from retention. If we can keep those customers coming back over and over again, it drives a lot of growth and a lot of profitability for the company. And we were, you know, we always use direct mail as another touch point because customers are just saturated with digital messages right now.

[00:10:35] And that's why it's been really effective. Companies I've worked for as well as the platform that we built. Wow. Okay. So basically what you're saying is, is the, there's a lot of potential for growth and. Profit, uh, in really focusing on retention where a lot of, a lot of brands are so focused on getting the customer acquisition costs down or, you know, optimizing the ads and getting more people in the door.

[00:11:08] But if, but you found that actually spending more time on like it, you know, increasing the lifetime value of the customer is where you could see, you know, huge, huge growth options. Totally. So most businesses think that they need more customers, but what they actually need is more revenue. So, you know, the, your existing customer base, and I'm not saying take your eye off pro off customer acquisition.

[00:11:33] Absolutely do that. But before you go out and keep spending up on your customer acquisition, you gotta make sure that that. That retention model is at least dialed in to where you know that when you acquire a new customer, you've got a better chance at retaining that customer over time. If you're only focused on customer acquisition at the expense of ensuring that you get those customers come back and buy again, it's, it's really hard to scale that as competition continues to increase your customer acquisition costs continue to increase and your competitors, if they're focused, if they can monetize.

[00:12:08] Uh, that customer better than you over their lifetime. That means they can afford to pay more to acquire that customer than you can. And you're going to lose that battle. So, yeah, profits come from repeat purchases and you got to dial that in. Okay. Got it. Oh, wow. Okay. And so, and by increasing, by increasing that, you know, total customer lifetime value, you can then afford to pay more for the customer.

[00:12:35] Totally competitors. Exactly. That's the flywheel. Right? You can always pay more to get to acquire that customer if you know that the LTV is higher than your competitors. Yeah. Okay. All right. So then I'm assuming that this point, you know, this is where you're integrating, you know, direct mail and doing things that people aren't doing, weren't doing where, you know, most people were, you know, heavily focused on email.

[00:13:01] You know, becoming more difficult. Um, and you were taking these approaches and, um, at some point you realized, uh, there's gotta be a better way, or this is frustrating, right? So, I mean, we built out these great email retention, these email. Uh, automated flows, right. That were really personalized and dialed in and triggered based on lots of great criteria.

[00:13:24] And then you still get like a 20% open rate and you're lucky if you get that these days. And so it was like, how do we get that? How do we make sure that message is getting in front of more of our customers? So we've got a good offer. We've got a good, a way of targeting these customers. But email, you know, it's 80% of those costs of your customers.

[00:13:46] Aren't opening it or aren't reading it or aren't on your list. So how do you get it in front of more of them? And direct mail has been a great way to do it. It just gets, you know, oh, darn close to a hundred percent open and read rate. And it stays with you for a longer period of time. It sits on the desk, it sits on the counter, you touch it.

[00:14:02] It's that you make that you have that physical connection with it. And it's just more. Yeah. Yeah. Okay. And so, and so through using that and, you know, feeling frustrated with how you, you know, the things you had to do to sort of execute that, you know, profitably, um, when did you come out, come up with the idea of solving that problem with post pilot?

[00:14:25] Yeah. So that was about three little over three years ago and we just wanted to make it super simple. We're like, how do you do. Make sending these direct, these triggered and personalized campaigns, as easy as an email campaign. Um, no importing exporting, you know, no, no hiring extra graphic designers to do this.

[00:14:47] Like just make it really easy. And you can with boast violet, we focus on like ease of use, have a campaign up and running. Wow. Okay. And, uh, and how, tell me a little bit about, you know, post pilot when it started and kind of take me to where you guys are today with it. Sure. So, um, started as a native Shopify app and we still have native Shopify integration.

[00:15:14] Um, and. It's a simple platform. You connect your Shopify store, you have it syncs with your customer data. So you can easily segment that based on any criteria. If you're familiar with segmenting for an email campaign, you've got like a Klayvio or even a MailChimp. Not only do we integrate with those, so you can use the same segments, but you can create similar types of segments the same way.

[00:15:40] How many times did you buy? How much did you spend? When's the last time you purchased? Um, really easy to just decide who your, who your audience is. Uh, you have a, uh, there's tons of templates with a drag and drop editor that you can use to design a card in a few minutes and a few clicks, or we have professional designers on staff that will actually do it for you for free, uh, and just make it super easy.

[00:16:03] And hands-off for you. Uh, and yeah, you can launch, uh, you know, we, you can launch a campaign and if in minutes and took us. A little bit of time to kind of get that product market fit, uh, as I'm sure, you know, a lot of your listeners have experience. So just trying to educate folks, I think on direct mail and that it's not kind of sure it's been around for a long time, but it hasn't been done this way.

[00:16:31] I think it was really a learning process for us on how to best educate customers and prospects on the power of it, how easy it was and how effective it could be. And, uh, you know, we've really grown, uh, really rapidly over the last year or two, as we've started to, to dial in that messaging. We, we also started doing even a free campaign to help get people who are thinking about it and still just want to dip, you know, get comfortable with it.

[00:17:02] We said, look, we've seen enough results at this point that we know if a customer is going to have success on this platform. And if, if, if we're comfortable, which goes for most e-commerce, um, is e-commerce folks, then we'll, we'll do we'll start their first campaign for free and let them see the results and then they'll keep going.

[00:17:21] Um, so that's been kind of a big, a big turning point for us. And then the introduction of our handwritten cards has also been a real pivot. Moment for us, both for our e-commerce customers and really all, all sales folks. Yeah. Yeah. And so even on the postcard side, like, do you need to be a marketer or could like a sales person set these up and like, just talk me through that.

[00:17:43] And then I re I'm really curious about the handwritten stuff. Cause I love sending handwritten cards and, uh, and I know that it's something that a lot of sellers are starting to do more often. Whether it's, you know, through their company or just, even on their own, um, really just that personal touch to, you know, build the build relationships has been really helpful for me and my team and a lot of the sellers that I talked to as well.

[00:18:06] Yeah, absolutely. So on your first question, do you need to be a marketer? No, we've got. Our best segments, kind of preset for you. So you can just pick one. We have folks that understand, you know, how to, how to best segment your audience and get you the best results on our team. And they'll help walk you through it, set it all up for you.

[00:18:25] Again, even the design service will do for you. If you need the help you can be, uh, uh, you don't have to be an e-commerce expert or a sales expert to be able to do it. We'll make sure that it's set up for you. And then the handwritten stuff is, as you mentioned, I mean, it's really cool. There's nothing that beats receiving a handwritten card in the mail, in an envelope with a stamp handwritten address on it, opening it up and seeing a personalized card inside.

[00:18:53] Whether it's from. You're an e-commerce store. That's saying, Hey, just wanted to welcome you and tell you how much we appreciate your business to a salesperson that just did a demo of a product for a prospect and wants to send a follow-up note, a financial advisor or insurance agent, you know, attorneys, these folks that want to send, you know, just holiday cards for their clients or a thank you note to a new client.

[00:19:19] Just nurture those relations. Same sort of thing. It, you can do it in minutes. It's personalized. It's an, it's an unforgettable experience. And I think in these days to where of where, like it's hard to compete on just features and value propositions because your competition is can copy that. If you create an unforgettable brand experience and surprise and delight your customers, whether you're an e-commerce store or a salesperson, that's, what's going to be memorable.

[00:19:51] That's, what's going to create loyalty and that's, what's going to keep them coming back to you and doing business with you for a long. Absolutely. I mean your prospects and your customers, don't forget how you make them feel. And this is like an easy, simple way to just make them feel like it was a good experience, interacting with you, building a relationship with you.

[00:20:10] Um, so just let me know, you know, any final thoughts. Where can people get started with, you know, either of these options, if they wanted to try it out, which I highly rated. Yeah. And I love what you said. Cause it's one of my favorite quotes. It's the Maya Angelo quote. That's like, they don't, they'll forget what you said, but they'll never forget how you made them feel and like totally believe that.

[00:20:33] Um, that's really kind of the thesis behind what we're trying to do here is create those types of experiences. And so yeah, w th. To get both of the, uh, the postcards and the handwritten cards. You go to post pilot.com. You sign up, takes a few minutes. If you want to create a card again, we have folks on staff that'll help you, although every step of the way, uh, and you can have a card out in minutes, postcards, you know, we have plans to start at 49 cents all in for postcard.

[00:21:07] Uh, you can do one, you can do a million, uh, as many as you want, same thing with our handwritten cards, it's starts at just a dollar 99, all in postage, stationary envelope, all that stuff. Uh, and so it's really, cost-effective more cost-effective than people might think, especially as, you know, cost per click continues to go.

[00:21:27] Now you actually, you can actually send a physical card for less than the cost of a click and a lot of cases. Yeah. And, and the, in the cards are written with an actual pen. So it looks like you legitimately wrote it. Right. And, and, uh, It has like your address on there. So it's look, I mean, it looks good.

[00:21:48] Like it's not, you know, printed with a machine, like it's literally with a pen where people feel like, oh, he really actually, or she really took the time, wrote something thoughtful and like dropped it in the mail, which people don't get a lot of mail these days. And if they do most of it's junk, so something like that really stands out a hundred percent.

[00:22:07] Yeah. It's, it's, it's robotic technology that is real holding a real pen, real paper. Uh, writing this out with the nuance of a human hand. So variations in every letter, the slants and the in-depths are all different. So it just, there is indistinguishable from handwriting, Fuman, handwriting. It's just at scale, it's not, it's not printed.

[00:22:29] And it's exactly, as you said, column, you see that come in the mailbox, you are, you're excited and you're opening it and you're reading it and you're remember. Yeah. Yeah. And it's, you know, I have horrible handwriting, so it works better for me.

[00:22:46] Uh, Michael, thanks so much for coming on. I really appreciate it. We're going to include, uh, the links there in for, uh, for everybody so they can sign up, try it out for themselves. Um, thanks again for coming on. If you enjoyed today's episode, please write us a review, share the show with your friends. It really does help us out.

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