Rock City Lab Reactivates Subscribers with Postcards

As a successful ecommerce marketing agency, Rock City Lab understands that active subscribers are crucial to the long-term health of a subscription business. 

Still, a powerful tool for growth—winbacks—often gets overlooked, says CEO Ben Semmar.

Just because a subscriber cancels doesn’t mean they’re gone for good. Maybe the customer can’t afford the product that month. Maybe they already have more than they need.

If a brand gets in touch with a discount or even just a reminder, many customers will come back.

There is a catch: It’s not always easy to re-engage these customers over email. 

But Semmar had a hunch that if he could reach them in the right channel, he could bring many back into the fold. He ran a few test campaigns with PostPilot and saw the reactivations start to roll in. One campaign even had a 28x ROAS.

“Direct mail is a blue-ocean channel,” says Ben Semmar, CEO of Rock City Lab.

“The results were pretty phenomenal,” he said.

In this case study, we’ll look at how Rock City Lab uses direct mail to bring back churned subscribers back, and why postcard campaigns are now the agency’s first choice for dependable, profitable results.

The Problem: Email Winbacks Aren’t Working

Before starting with PostPilot, Semmar tested an email winback campaign with one of his clients, a supplements brand. 

He sent ​​7,176 emails to churned subscribers, with offers tailored to the reasons they had canceled. If a subscriber said they no longer used the product, for example, the email suggested they try another one.

The campaign flopped. Out of more than 7,000 customers, only 42 reactivated their subscriptions (despite a 56% open rate and 2.13% click rate).

Semmar thought the problem might be the medium rather than the message. The campaign had a high open rate of 56%, but that still meant that nearly half the recipients weren’t even seeing the email. And a tiny fraction of those who did actually engaged with it. 

Email was once a reliable way to get in front of customers, but today it has some serious shortcomings. 

On one hand, many customers are overwhelmed with marketing emails, which leads them to ignore messages. On the other hand, if you limit your contact with customers to a monthly receipt, they may not feel connected enough to your brand to respond to an email urging them to come back. 

But here is another way. 

The Promise: A Campaign with Astronomical Engagement

Email can be stressful and overwhelming. But people have a different kind of relationship to their physical mailbox, which isn’t getting bombarded with marketing messages. Studies show Americans actually look forward to checking their mail. 

“It's a blue-ocean channel,” Semmar said.

It’s a lot easier to stand out in a mailbox. There’s less competition, and you don’t have to rely on a subject line to win someone’s attention. Plus, a piece of mail—such as  a postcard—is inherently interactive. You pick it up. You look at it. 

“You have to make a decision: ‘Am I going to act on this or throw this out?’" Semmar said. "You have to read it in order to make that decision.”

Email open rates are generally under 20%. But people read or scan up to 90% of postcards.

“It's just such a remarkable channel. As an e-commerce nerd, I get so excited about it,” Semmar says.

Rock City Lab also likes the predictability of postcard pricing. Unlike with auction-based channels like Facebook ads, postcard costs are fixed regardless of the time of year or amount of competition. Increasing your spend doesn’t mean you’re paying more per conversion—the more you send within a given segment, the more revenue you can generate.

The Postcard: Personalized Offers for Every Segment

Rock City Lab ran a test postcard campaign for its supplements client. It used the same segments as it did for the email winback—a cinch thanks to PostPilot’s Klaviyo integration—but targeted the nearly 50% of people who didn’t open the emails. 

Each segment got a unique postcard with offers and messaging aligned to the cancellation reason. If customers had said they had too much of a product, the postcard checked in with an invitation to replenish. If they said the product was too expensive, the card featured a discount.

To protect profitability, the agency took a data-driven approach to discounting. Rock City Lab offered bigger discounts to subscribers who had a longer history with the brand. Semmar knew from the brand’s subscription survival curve that for every additional month a customer sticks around, they are significantly more likely to stay active for the following month. 

If a customer cancels after six months and the brand can bring them back for a seventh order, Semmar said, there's about an 85% likelihood they’ll stick around for an eighth. Knowing that, offering a more generous discount makes sense “because we know that if we can get them to the next order, we'll make up that margin over time.”

Semmar even tested a holdout group that didn’t receive any postcards or other marketing communications. The data confirmed that the remarkable lift he was seeing was truly incremental. 

The process was a breeze from start to finish, he said. He’s had some clients provide their own creative; others work with PostPilot’s designers. Once the creative is in, setup takes him about five minutes. 

“If you've used an email platform,” Semmar said, “you can very easily set up a PostPilot campaign.” 

The Payoff: ‘Remarkable’ Results and 10X the Conversion Rate of Email

Soon after PostPilot sent out the first batch of postcards, reactivations started rolling in. 

Of the 971 people who received mailings in the first tests, 57 signed up for subscriptions — a 5.87% conversion rate. (The email winback, by comparison, had a conversion rate of 0.59%).

Even better, these results scaled as the brand sent out postcards to more people. Sending 1,856 postcards yielded 108 reactivations.

Doubling the spend meant doubling the revenue—a linear relationship that Semmar said he has yet to see in any other channel.

“It takes a lot longer for you to hit the point of diminishing returns,” he said. Brands seem to be limited only by the size of their lists.

Since that first test, Rock City Lab has run PostPilot campaigns with nearly all of its clients and has seen similarly strong performance across a range of categories and business models.

One campaign for a men’s apparel company focused on subscription signups rather than reactivations. It targeted VIP customers who had not yet signed up for the brand’s $30-per-month membership club. 

From the 23,105 postcards sent, 5,431 people placed orders, generating more than $317,000 in revenue at a whopping 28.02 ROAS. And that’s just off the bat. Much of that revenue came from new subscribers, who tend to have a 20% to 30% higher lifetime value. 

And if they eventually churn from the club? Another postcard could win them back.

The Postscript: Connecting With Hard-to-Reach Customers

Today, when Rock City Lab signs a new subscription brand as a client, one of the first things it does is run a reactivation campaign with PostPilot, Semmar said.

“It's just such a remarkable channel. As an e-commerce nerd, I get so excited about it,” he continued. “It always works and always drives profitability, so it's a nice win for us with the client.”

Active subscribers provide the cash flow to support marketing efforts, so reactivating recently churned customers is a relatively low-cost way to maintain sustainable growth.

Looking to the coming year, the agency plans to leverage PostPilot’s proprietary MailMatch™ technology to send postcards to customers who have signed up for brands’ email lists but have yet to place an order. Given that most brands’ emails have about a 30% open rate, there’s a huge untapped market he’s excited to get in front of.

“Because of PostPilot, we're really, as an agency, focusing a lot of what we do on the direct mail side,” he said. “That's where we get the most incrementality and the results are super consistent.” 

Direct mail brings subscribers back. Contact us to launch your campaign today.