Ep 629: 85% of Your Email Revenue Comes From One Segment (And You're Ignoring It)

0:00Before we jump into today's all killer, no filler episode, a quick word about who makes this show possible. The D2C podcast is brought to you by Pilot House, the performance agency behind some of the fastest growing D2C brands in the world. Creative, media and customer journey all under one roof. Performance and brand without the tradeoff. Every Friday, we hand the mic to a Pilot House operator to break down what's actually working in their space right now. Want a team that treats your growth like their own? That's Pilot House. Head to pilothouse.co and now on with the show. 85 % of the revenue from your campaigns are people who've been on the site recently.

0:36Jordan Gordon:Yet, most campaigns go to people who've opened. They might have subscribed or purchased like a year and a half ago, and you're still emailing them three times a week. Like, my God. In a period of margin compression, everybody is going to be like, hey, we send 24 campaigns a month. What the heck? Why not send a nice, healthy 8 to 12? So the core flow that I see pretty much nobody doing, and yet it's the flow that sells the thing that people are most likely to need.

1:28shows across Paramount +, CBS, CBS Sports, Pluto TV, and more. Paramount Skydance content makes up about one in five of all streaming minutes viewed in the US, and Paramount Plus drives 21 % higher ad attention than other streaming services. And it makes sense, because these are non-skippable full-screen spots running right next to the shows people actually sat down to watch. No scroll, no skip, no little square buried in a feed. Just your brand in front of someone who's paying attention on the biggest screen in their house. Sign up today at paramountadsmanager.com. Get your brand on TV's biggest shows by tomorrow.

2:05It's all killer, no filler. I'm Eric and I am here for a very special episode with Jordan Gordon from Pilot House, host of To a Burp, the world's best email and retention podcast and leader of the CRO and retention team over at Pilot House. I just got off a call with several like high eight and nine figure brands who I've been connected with. And it was about how much the top of funnel, how much people are starting to realize at a big enough scale, Facebook doesn't actually have great demand generation. And that people aren't really learning about products on Instagram and Facebook as much as they are on platforms like YouTube and TikTok.

2:41And just how much patience it takes to stick with demand gen on YouTube, but how fruitful it is for brands at the right scale, which I thought was really interesting.

2:52Jordan Gordon:Well, what I find interesting about that, is that my background, so like, of course, what do we do here? We run advertising because you need to reach new audiences. And there are certain points in your business's life that you need to reach much bigger audiences now, right? For those times, nothing beats paid advertising because someone's got the audience and you just unlock it and you hit it, right? Okay. That's at certain points. But all of the time, not just at those points, all of the times, all of the big brands I ever worked at or startups who were becoming big brands and succeeded, I was in two exits, they were always building their free traffic.

3:35Jordan Gordon:Building free traffic is the like the forever job, whether it's owned through email and just making sure that that thing is big or it's, you know, SEO and now AEO, EG, GEO, all of the different ways that someone shows up at your site for free. And so that fits perfectly into that. And I'm not surprised. And frankly, that insight in my mind was always true. It's just, there's different points in the business cycle where someone really notices and they're like, damn, YouTube's killing it right now for whatever reason. Right. I'm old. So I'm a YouTube guy. That's, you know, I'm always YouTube shorts and things like that.

4:10Jordan Gordon:I understand that it's, it's, it's becoming age segmented for sure. Of course. And I, and I do most of my discovery and learning on YouTube, everything. We just put our sink in. I'm on YouTube figuring out how to put our sink in. Like I'm just totally plugged into that ecosystem. And I am like, I'm zero plugged into Facebook and I am plugged into Instagram enough to post some cute pictures of my kids with videos at the beach. For your family mainly. That's it. Right. And it's for people to see those, you know, for my mom to see them and stuff. But I'm so plugged into YouTube because there are some things that just require a 20 minute video.

4:48Jordan Gordon:And if you want someone to learn about your brand, they're going to learn about it in a 20 minute video and a very small number of people like list size and impression count. These are, you know, of course they're important to all the buyers out there. Of course they're important, but like those counts hide truths because the number of people, this is, it's the exact same in email, right? And it's the exact same on site. I'll give you an example. We look at top 10 pages in our site service. It's a, Home, top three category pages, top three PDPs, top three content pages. Top three category and PDP by conversion count, top three content pages by session count.

5:26Jordan Gordon:Okay. And that's where all the action is. It's the first two clicks, the first two minutes, and the first two folds of every page. Okay. That's where all the action is. Not many people are going to your FAQ page, but the people who have gone to your FAQ page within their journey are so much more likely to convert, right? Right. So these small counts, the number of people who we all know, no one gets to fold 10 on your page, which is true. But the people who got to fold 10 are so much more likely to convert. Right. And so who's watching your 20? No one's watching our 20 minute video. It's just like it says there's 420 people ever watched that video.

6:12So, okay, wait a second.

6:15Jordan Gordon:Those people are so likely to convert. And people on your impression count, they're scrolling past your thing as quick as they can, right? So what does that mean? That just means put more attention into those places, even though they don't appear to garner the volumes of traffic? Like, what's the actual action outcome from that? Yeah, well, I mean, first, you have to find out which of those things there are. So on-site, we're talking on-site now, but on-site, you'd be looking at funnels and seeing, you know, which, if you look at the funnels that work, oh, it looks like the FAQ page is always on there, right?

6:47Jordan Gordon:Okay, well, let's, let's remember that, for instance, right? Or which ways, which ways, you know, I mean, the simplest is which entry page is the best. That's the simplest. And I recommend everybody to study entry pages, of course. Um, yeah, but I think on your, if you look at referral and which of, which of your organic videos, uh, you know, have a click through that had a good, a good session and add to cart on that session or something like that. So tagging everything properly, it's pretty old school stuff. I mean, these days you probably have sidekick, figure that out for you. Right. So yeah, I mean, step one, find those things that are very small count and highly correlated with purchase and work on those.

7:32Jordan Gordon:Because when you think about it, if your impression counts are like in the millions, it's like, well, clearly an impression isn't very valuable, right? So find those things with really small counts. And in email, it's like there are certain buyer, like your repeat buyer group spends so much money. They're your whales because your recent repeat buyer, because it's someone who bought more than once. And one of the purchases was in the last 90 days. Those are the guys that purchase three, four times a year. They're always in that group, right? It's a very small group, but it's like, they're your whales.

8:05Jordan Gordon:You don't want to over message them. You don't want to spam them too much because you want to squeeze them over, over a long time, get a lot of share a wallet and don't have them unsubscribe. It's a small group that weighs a lot. One of the things I'm seeing in market is just margin pressure, really thinking about what Q4 looks like in probably the most margin unpressured environment we've experienced maybe yet as, as marketers. What are you seeing in, in, in your audits or with clients around that? I guess we've been talking about people trying to get more, trying to send their email list, trying to get more sends every year.

8:41What do you see in, in that space?

8:43Jordan Gordon:Yeah, I was, I was actually talking to a brand of ours. It's a small brand and they just get a little bit of work here and there because, um, yeah, they're just on a really tight budget. and she just came and she's like what do you suggest i do and it's like it's just so simple you add add more flow messages if you're on a budget there's nothing that you're going to get greater greater roi than more flow messages right so i agree there are people where they're just sending i i'll repeat some research that i that i released when i did so you go back and look at my um essentials episode the essentials core flow everybody go back and watch that episode it was it was a killer episode and we talked about a bunch of research we've done.

9:22Jordan Gordon:85 % of the revenue from campaigns comes from audience that has been on the site in X number of days. I'm not going to release the number. You can go study it for yourself. It's different for your brand anyway, but someone has been on the site within X number of days. Those people account for 85 % of campaign revenue. And it's not too long of an amount of time. Now, okay, if someone's, let's just call it recently. They've been on the site recently. Okay. 85 % of the revenue from your campaigns are people who've been on the site recently. And yet most campaigns go to people who've opened, not been on the site, right?

10:03Jordan Gordon:Most campaigns are going to people who've, they were, they might've subscribed or purchased like, you know, a year and a half ago and you're still emailing them three times a week. Like my God, right. There is some brand value to complete saturation. Uh, that's, you know, you can go back and look at my analysis of, uh, American Eagle and stuff for, for, to understand that. Yeah. There's, there's a play for complete inbox saturation, but we work on scaling brands and being efficient, uh, staying in the inbox. Uh, when you're a new brand means playing really by the rules, uh, shout out Benny at senders.

10:41Jordan Gordon:You where we would go in depth on that. And point being, those people that you're spamming the daylights out of who were on your site a year and a half ago, but happened to have opened every 180 days once, so they're still in your segmentation, you're not getting anything out of them. All you're doing is dragging down your sending reputation. They are that 15%. Okay, well, why not focus on that 85? I just told you, if they've been on the site in X number of days, they're accounting for 85 % of your campaign revenue. If you don't send a campaign and you send an automated email instead, it's 85 % is good.

11:21Jordan Gordon:And it's a small send size and it's not potentially damaging your brand, driving opt-outs, driving you into the spam folder, etc., etc., etc. So of course, in a period of margin compression, everybody is going to be like, hey, we send 24 campaigns a month. What the heck? Why not send a nice, healthy, you know, 8 to 12, but just have an automated system that supports that? And there are similar ways of thinking about site and CRO. Yeah, it's a lot of potential risk to your sending reputation to your future deliverability for that 15%. You're really squeezing the rag at that point, right? If you're going people past who've not been on your site in a long time.

12:10I'll tell you what, I audit like, I don't know, I've maybe audited four or 500 brands or something like that.

12:15Jordan Gordon:Tons. I've been in so many Klaviyo accounts at this point. And the people who've had their account blown up, it's almost always tons of campaigns or also shout out, you know, second place to really weird sunset flows. A really weird sunset flow that's purely designed will blow an account up. Other than that, it's just like way too many campaigns with way too big segmentation. More campaigns means tighter segments. Less campaigns means looser segments. That's kind of just how you think about that. How do you fuck up a sunset campaign? Yeah. So you got a sunset flow that's sending to people after they haven't engaged in a certain period of time.

12:58Jordan Gordon:And let's say you just set the segmentation up. So it's like it sends to everybody who hasn't engaged in a certain period of time. Let's say you got like a 10-year-old brand and it just sends to 10 years of addresses in one go, right? And you have this nasty deliverability event. And let's say you've migrated from another system and you didn't unsubscribe your hard bounces. So you send to all your hard bounces from that last system in one big sunset go. Like it's just a common thing. so flows over campaigns to be more precise but then but then we're back to our same problem of you can only manufacture like with campaigns you have this vision of being able to send to your whole list and this big money you can get whereas with flows you can only you know you're sending to people who've taken an action who've been to your site on a so what are the events and i know we've talked about this on podcast before but what are the what are ways that people are not sending flows that they should be obviously all the cart abandonment stuff let me break this one down because I, I, you guys can go and check out the episode if you want, where I talked about essentials, but it's like the essentials flow, but it's, it's, there's something deeper about it.

14:07Jordan Gordon:There's a deeper truth in this. Okay. And it's, and you got to think about the consumer's mode, the mode they're in, right? Campaigns are zero intent messages. You do not know what someone's intent is because when you send that campaign, you send to that minority of the list that was on the site in the last 90 days, but you also send to the guys who were on the site 730 days ago. So it has to be about something that appeals to everybody. So the classic things that appeal to everybody are newness and offers, period, right? Also, if you've got a really good campaign program, it could be, you know, if you're a wellness brand, it's health information, whatever it is, something that's really adding to the person's life.

14:51Jordan Gordon:Okay, well, look, the content, the wellness content or whatever it is, the thing that, you know, or you're a skateboarding brand and it's links to your cool skateboarding videos. Those things don't drive revenue, right? They're not for revenue, they're for engagement, but they're not driving revenue. But your whole list can consume them and be happy, okay? And then we've got offers. Of course, offers are great. You cannot build your business around offers, or you can, but then you're a discount brand. And then it's very difficult to get out of that. Okay. And then that leaves newness. And imagine this, because this is very common.

15:27Jordan Gordon:This is email marketing. Someone launches small purple widgets. We've got the tiniest purple widgets. And the email goes out and someone goes, oh, hey, super tiny purple widgets. That's kind of interesting. They click through, they check it out. But this is like some, you know, weird side product you've launched. And so the chances that they actually need a tiny purple widget are pretty small. So let's say you are the average widget brand. Well, then you know what? Most of your sales are medium-sized red and blue widgets. That's like two-thirds of your sales. So if someone goes to your site, if they click on purple widgets and go to your site, and they do not buy purple widgets right then and there, or off the checkout abandoned email, so like let's just say after one week and they've been through your abandonment, If they went there for purple widgets and they did not buy purple widget right then and there, the most likely thing that they need is your medium-sized red or blue widget.

16:27Jordan Gordon:And what is one abandonment flow that nobody has, no single brand I've ever seen has? Oh, you came to our site and we're going to spend the next, you know, 8 to 12 weeks respectfully dripping out emails, really spelling out for you why our red and blue widgets are the best widgets in the world. So we told you about that in the welcome flow. And then you went through and you bought on the first email, never even got the other ones. And you didn't pay attention to the first email anyway, because you just wanted the 10 % off. And maybe you got some value propositions off the site, but you are the average person on our list, which means the average person on your list has like clicked once and opened five times or something like that.

17:12Jordan Gordon:You know what I mean? You're the average person on our list. You don't even necessarily know exactly why our medium-sized red and blue widgets are the best, but you've been on our site. So we know you are the most likely to spend. And we know that if you didn't buy whatever it was, the most likely thing you need is a medium-sized red or blue widget. So the essentials core flow is a flow that I see pretty much nobody doing. And yet it's the flow that sells the thing that people are most likely to need. And it cannot be a lifecycle-based flow. Sorry to wrap this up. This is a big, big chat, but it cannot be lifecycle-based because lifecycle-based is, okay, someone subscribes, you send a welcome flow, right?

18:02Jordan Gordon:Someone purchases, you send a post-purchase flow. Lifecycle events are rare. Like when someone subscribes, that's a one-time event, right? It's rare. And then the first purchase, it's like, oh my God, thank God we got them to make a first purchase. And then it's this massive uphill climb to make a second purchase. These are rare and extraordinary events statistically, but site visits are not so rare. In fact, you can send your small purple widget email out and you can get a visit. So this cannot be, this essentials core flow is not a lifecycle flow, meaning triggered off of subscribe or purchase.

18:38Jordan Gordon:It's a funnel support flow triggered off of a bounce active on site. So there's something no one's doing that everyone should be doing. I think that's perfect. I think if you're not listening to Twoburp, you're crazy. If you're doing retention or email marketing, if you're not listening to the world's best email and retention podcast. And I also think just because you're not busy enough, anyone listening who wants to talk to Jordan, they should just email you at jordan.g at pilothouse.co. I know you're, I know you're busy as hell, but I just feel like anyone out there, uh, he's also, you're also looking for guests.

19:11You're also looking for guests for the podcast. So if you're out there in the audience, you got something you want to talk about on the retention side.

19:17Jordan Gordon:I just had Thomas that you sent me on the pod and a small little point. Like I, on the pod, I'm, I'm very open. I'm just like, yeah, it's Eric sent you to me. And he's like, oh, this guy kind of does what you do. He's kind of your competitor. You want to interview him in a way? And I said, yeah, sure. I'll talk retention with anyone. And it was, it's a phenomenal, um, everybody watch it's coming out in a couple of weeks or whatever, uh, the, the, the economics of, of retention and happily in that we discovered, Hey, you know what? We are, we are compatriots in the same field. We've got different, different kinds of clients, It's different kinds of things we're running at, which means, you know, we can just, we can partner in the future potentially and just be buddies and we'll have them on the pod again.

19:57Love it. Nice, man. Well, also great work on the background there. Jeff was talking to me about your background the other day. It was very West coast. Very, uh, I like it. I need to get a mural. So if you want to paint me a mural back here, two dragons mating or something.

20:13Jordan Gordon:I've like, I've, we, if anybody's followed the pod, I've been like signing in and doing podcasts from Turkey, right? Italy, Mexico, just like all over the place. And finally we just settled in and parked somewhere enough that I could get a nice background on the wall and, and your beautiful buttery microphone. Yeah, that's right. Set up perfectly. Nice. All right, Jordan, let's do this again soon. We just got to jumpstart our talk sometimes and look where they go. Tips no one else is doing. All right.

20:49Thanks for listening to today's episode. If you're not getting the DTC newsletter, you can subscribe for free at directtoconsumer.co. And if you want to learn more about Pilothouse's all killer, no filler services, take off to pilothouse.co. I'm Eric Dick and this has been the D2C podcast. We'll see you next time.