Paper Run

1. What’s your name and title, what do you do day-to-day in 20 words or fewer?

Name: Gabriel Loftus
Title: Co-founder, Paper Run

I spend my days helping DTC brands connect with and convert customers they couldn’t otherwise reach.

2. At Paper Run you give brands the ability to directly contact customers they can’t reach. Can you give us a success story for a D2C brand you’ve worked with? E.g. what was the problem? What did you do? What were the results?

Brand: Presscription

Problem: Imagine if I told you, tomorrow you were restricted from contacting 70% of your existing customers. You’d be furious, and rightfully so. But, this is actually what already happens today with customers you are acquiring.

With a sub 30% open rate, this is already happening with your customers that you spend so much resources acquiring.

After all that work and resources spent to acquire customers, after that first purchase, the majority of them never hear a word from you again.

Presscription is one of our customers who we helped solve this for. We built an automated flow to identify these types of customers and connect with them using Physical Mail.

Every day we programmatically deliver beautiful, personalized pieces of Physical Mail from Presscription. For these “unreachable customers,” it’s the first time they’ve seen or heard from the brand in months.

We think the results have been pretty astonishing. We’ve generated >9X ROAS across these automated flows for Presscription, with repeat purchases to boot.

3. You specialise in identifying customers who aren’t likely to open emails, SMS or interact with targeted ads – what piece of advice would you give to DTC brands who want to improve in this area?

I have 2:

1: Resurrected customers are worth more than new customers… Simply put, a “customer who had churned and you have won back” is going to have a higher LTV than a “new customer that you’ve acquired”.

This is something that I don’t think is immediately intuitive to brand owners and was surprising to find out when I led growth functions at Meta. We found that activity from resurrected users had a much higher ROI than new incoming users.

But if you think about it, it makes a lot of sense (i.e. the reactivated customer has a much higher intent with your brand than a newly acquired customer). This is still one of the most overlooked facts in the DTC world.

2: Retention is the force multiplier that you need in the world of rising CAC – The days of cheap CAC are over and the most reliable way to adjust to this new world is to multiply the value you get from every customer that you acquire.. That means you need to figure out your customer journey + the marketing touchpoints/channels that you’ll use to retain them.
I see a lot of D2C brands neglect this. They are hesitant to put resources into any customer that they feel like they’ve already “won”…. but those are the exact types of customers you should be investing in.

It’s like a relationship, if you want a stable and fruitful relationship, you don’t stop putting effort into the relationship after your first date. You want these customers to become regular, and become champions.

This goes along with the first point, that D2C brands that thrive are ones that aren’t a leaky bucket. By investing in retention you set up a foundation that really allows your brand to scale with growth efforts.

4. What do you think the biggest challenges facing eCommerce/D2C businesses will be over the next 12-18 months?

The next 12-18 months are really the perfect storm for DTC brands.

The world of easy CAC and easy spending is behind us, and I think in the long run this will actually be good for consumers and brands.

We’ll see a lot of brands with poor products & experiences fail to survive, as some should probably not exist in the market, but the good ones will thrive & prosper.

This is kind of a wake-up call across all industries really, but DTC especially. The growth at all costs playbook and unprofitable growth have been done away with, and in this macro environment, businesses have to invest in making their businesses and experiences a profitable one that can survive on more than just digital advertising spend.

5. Complete this sentence – DTC brands that survive and thrive in 2023 will …

Have figured out how to communicate & create relationships with their customers.

6. Name three D2C brands that are killing it and whom you recommend others to emulate/learn from.

Proper Cloth