Direct Mail Marketing Tips to Generate 40%+ of Revenue from a Catalog

How many cutting ­edge eCommerce marketing gurus do you know talking about print mail?

Yeah, me neither.

But it turns out those old-fashioned catalogs and flyers (printed on actual PAPER, if you remember what that is) can be incredibly powerful.

I sat down to talk with McGregor Button of LinkSoul about how his company generates over 40% of their revenue from direct mail.

In today’s discussion you’ll learn:

  • How direct mail / catalog advertising ranks in terms of ROI (spoiler: extremely well)
  • An amazingly powerful (and super­ creepy) retargeting technique you can use that employs postcards
  • How you can leverage a “lookalike” audience for print mailing vs. Facebook

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(With your host Andrew Youderian of eCommerceFuel.com and McGregor Button of LinkSoul)

Andrew: Welcome to the eCommerceFuel Podcast, the show dedicated to helping high six and seven-figure entrepreneurs build amazing online companies and incredible lives. I’m your host and fellow eCommerce entrepreneur, Andrew Youderian.

Hey, guys. It’s Andrew here, and welcome to the eCommerceFuel Podcast. Thanks so much for tuning in today. And I’ve got an old-school, what seems like an old-school technique to discuss that actually has a lot more power than you might you might imagine and that is direct mailing. Yes, I’m talking about paper, mailboxes, super old-school stuff, and these I realize is an e-commerce podcast.

But my guest today has been doing some really cool things with the direct mailing and catalog world. And his name is McGregor Button. He’s the VP of marketing over at Linksoul, which is an apparel brand out of California. And he casually mentioned one day that they generate, you know, something like 40% of their revenue via direct mailing and immediately my little antenna went up and was thinking, I have never heard of anyone in our industry say that.

So I wanted to get him on the show and talk about how he does that. And we talk about a lot of things. We talk about the level of ROI he sees with direct mailing relative to other channels like e-mail, PPC, retargeting, things like that. Talk about how much it costs to print a catalog like one of those gorgeous, you know, 30 or 40-page catalogs, how much it costs to print and mail it. I thought it would have been $5, $6, $7 maybe I’m naive.

But I thought it would have been really expensive, maybe I’m just getting fleeced every time I go to Kinkos and make a color copy that’s probably more likely, way less than that and we talk about, you know, how really affordable can be to put one of those out.

He covers what I think is a super creepy, but also amazingly powerful abandoned cart sequence that you can use with postcards without even knowing your customer’s address, which is really cool. McGregor shares a lot of really interesting things and in a realm and a marketing tactic that we as e-commerce store owners really do not think about very much, which is perhaps, maybe why it’s so effective. So I’ll leave the teaser at that, we’ll go ahead and dive into this day’s episode with McGregor on direct mail marketing.

Quickly before we jump into today’s discussion I wanna thank our two sponsors for the show. Something new I’m doing for 2018, I have a couple of companies with great products, great teams that I feel comfortable to put my name behind that are helping bring you the show this year and the first one is Klaviyo. If you’re in the space and you listen to the podcast very often you’ve likely heard of these guys, but if not, they help you make more money with your store through their superpower, which is segmentation.

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Background Story: Linksoul

All right. So let’s go ahead and get into today’s discussion. McGregor, one thing I ask everybody at the beginning of kind of a pre-interview is what they’re most excited about in life or business or health and you mentioned just the company, Linksoul that you’re excited about the brand and what it’s doing.

And I wanted to ask you about that brand and direct mail in just a minute, but in your role in that can you talk to me a little bit about the brand? Because I saw something when I was researching it, looking at it, you know, it’s kind of this interesting mix of a California-based surfing beach brand with a golf heart mixed in there as well.

And for someone who’s not a part of that or someone if you’re pitching me that, I’d say they were very different demographics, you know, kind of the surfing and the golfing, but you seem to have married them beautifully. How does that work? Talk to me a little bit about that.

McGregor: You know, it is kind of an unusual intersection, but what I’m finding it really does exist here in Southern California. And, you know, that’s the founders, you know, they’ve lived the lifestyles portrayed by the brand, which is what I think makes it successful. It is not a manufactured story, you know, it really is authentic, you know. We’ve done things like we’ve restored our local municipal golf course here and taking over, running that.

So we have our own golf course, that we sort of saved from going to developers, you know, our founder John Ashworth, he’s been in the golf apparel world forever. He had a very successful company back in the ’90s Ashworth Apparel, you know, any of the golfers out there that have played for awhile probably have heard of it. But it’s a lifestyle that exists out here for a lot of people in California.

And I think it’s intriguing and appealing to, you know, people across the country. And, you know, marrying that up with some really killer product that, you know, you don’t have to be in California or where you don’t have to be a surfer or where you don’t have to be a golfer, where it’s been successful for us, but telling that story, you know, we kinda of see it as we’re not selling golf clothing, you know.

If you come to us because you like our clothing and you buy it from us, and we can introduce you to the game of golf and we can show you that golf doesn’t have to be, you know, the sort of inaccessible or exclusive thing then that gets us most excited. If we could sell you a shirt and get you to pick up a golf club, that’s the biggest win we can get.

Revenue Through Direct Mail

Andrew: How much of the revenue at Linksoul do you guys drive through direct mail? And when I say direct mail most people I’m sure know what I mean, but I’m talking about offline. So usually, you know, print stuff that you stick in the mail and people actually physically pick up in their mailbox. So what percentage of revenue does that drive for Linksoul?

McGregor: That, of course, is a little bit of a tricky question. That’s really an attribution question at heart, but I can answer that simply give a little bit of detail. But, you know, we go through it, it’s called the match back process. So we know who we mail catalogs to and then we know who made a purchase. And when we look at that through a certain lens of a certain amount of time in those kind of things like, you know, we use 45 days we could see that, you know, about this year, it’s shaping up to be about 40% of our sales coming through direct mail.

I think part of that it’s a little misleading. We have a really huge chunk of our sales that tie back to e-mail marketing and a lot of those e-mail addresses we have because we mail that person, you know, a catalog. And those are really representative of the downstream revenue that comes from the catalog. So I think looking at it, you know, you can never get the attribution picture totally right or looking at, you know, where is that first order coming from, you know, almost half the people that coming from the catalog and that’s shifting a little bit, but it’s big for us, you know.

A Look At ROI Across All Channels

Andrew: So how does the ROI stack up relative to other channels for direct mail when you’re looking at the attribution and the calculations can be a little squishy based on some of the stuff that you just mentioned. But when you compare it to things like e-mail, PPC on Google, Facebook Ads, things like that, how does the ROI look when you’re looking at direct mail?

McGregor: Well, there is an important distinction to make there. So we use direct mail pretty much in two ways. One is for prospecting, so it’s getting in front of people that we wanna convert, we wanna buy. The ROI in that is pretty difficult, you know, it’s not really possible for a lot of businesses to make money on it anymore in the first purchase and that’s why you gotta look at things like lifetime value. So the ROI on that front is not great, but, you know, digital, each ad units is a lot cheaper, but the response rate is slower.

So digital is pretty expensive too. So, on the prospecting side it’s a little less of a positive ROI that our digital programs for us what we’ve seen, where we really see super, super, super good ROI is mailing our buyer file and, you know, next to e-mail marketing it’s really the best thing, the best lever that we can pull to get a direct response out of our existing customers, and drive additional purchases, you know, and increase their lifetime value.

So the ROI is terrific when mailing our buyer file or our house file, whatever you wanna call it. ROI not so great prospecting at a loss when we go after new customers.

Prospecting for Gold

Andrew: That makes a lot of sense. So obviously if you’re prospecting, where do you get those prospects? Are you buying, are you purchasing the lists? How are you prospecting and getting those names?

McGregor: Yeah, that’s a great question. There used to be several different ways to go about getting those lists that used to work maybe 20 years ago. Now, the only thing that really works for a lot of people are going to… There’s pretty much five or six databases. And these are companies that have been around forever that have been supplying names to direct mailers forever. And if you used a credit card in the U.S. they’ve got you in their database with some transactional history associated with it.

So what we do is we take our existing buyers and their transactional data. We feed it to these guys and it’s called a cooperative database because this is generally how it works, you have to contribute names of the data into it to get names of data out of it, you know, and then, of course, you pay them on top of that for their service. So, we will contribute our customer data in there and say, “Hey, give us people that look like this.” And really, you know, Facebook’s finally gotten around to doing this in a pretty similar way, but it’s basically just lookalike audiences.

So that’s been around in the direct mail world for a long, long time. And, you know, Facebook’s finally kinda gotten onboard with that in a big way and but really you kind of think of it like a lookalike audience, you know. You have to go through different processes and mechanisms, and it’s not a sort of self-service interface like Facebook provides. You gotta deal with brokers, list brokers, and things like that, agents of these databases.

But at the end of the day, you’re giving them your customers and what they bought, and they are using various algorithms to give you back qualified leads.

Best Companies for Leads

Andrew: And you mentioned those four or five companies. Could you… You don’t have to name all five, but the ones that come to mind, could you name who those are because people wanna follow up with.

McGregor: Yeah, sure. And some of these I’ve worked with for so long that I think some of them have been rebranded. So I must speak, you know, I might be saying the old name of some of these, but, you know, a couple of them so off top of the head are iBehavior, company called Wiland, one is Abacus or I think that one’s now called Epsilon actually, Oracle, Wiland, iBehavior, Abacus, that’s four. There is kind of a new entrant into the space called Path2Response and I think there’s one more out there that I’m probably forgetting, but that’s a couple of them.

On Creating Lookalike Lists

Andrew: And how much and I’m sure it’s gonna vary if you’re trying to create a lookalike list for people who buy high-end plutonium for nuclear reactors. I’m guessing that’s gonna be a probably more expensive list than if you’re buying someone whose trying to get demographic who buys, you know, silverware or something. So, you know, there’s gonna be a lot of variation in there, but roughly like if someone was starting an apparel brand today, roughly what would it cost if they had 1,000 customers to try to get another 1,000 prospects?

McGregor: Well, actually, where the pricing works is, you know, you really don’t pay, it averages out maybe to 7 or 8 cents per name after you dedupe your list and things like that. You match up the list into different databases, by the end of the day, you know, and my point and my assumption is we’re gonna spend about, you know, 7 or 8 cents per name that we get from the databases. And that really shouldn’t vary whether you’re selling apparel or you’re selling trolling motors or, you know, whatever else you might be selling, you know, they’re just purely trading names.

So if you’re just starting out, you know, and you don’t have a lot of data that you, you know, you can basically still talk to them and they will let you get names out of their database, but you kinda have, you know, a bit of a promise that you’ll keep working with them and as your customer file grows, you’ll feed the names back into their database and, you know, support their ecosystem. You know, but that’s kind of it.

So, you know, you’re talking, you know, 7, 8 cents per name, you know, really, you probably if you’re prospecting you wanna mail, I don’t know, anywhere from 25,000 to 50,000 pieces to really get a significant read that’s kind of a starting point in terms of volume. You know, and then you have the printing and one of the biggest pieces of the cost structure of direct mail is the postage, you know.

So it adds up pretty quick and then you have creative cost, which depending on how you approach at, those could be extremely expensive too. But in terms of just getting the names assuming, you know, you’ve got the direct mail piece, you know, designed and, you know, you’ve got a way to print it cost-effectively, and get it in the mail, the names themselves, you’re going to spend 7 to 8 cents per name and you wanna be taking them in chunks of 25,000 or 50,000.

Different Mailers, Different Folks

Andrew: Interesting. That’s oh, so when you think about the different… I’m sure you send different pieces you mentioned catalogs or maybe you don’t mention, assume. Can you give me a sense of what different types of mailers you send out? There’s the catalog, which you alluded to, we’re all familiar with big, thick, glossy, nice beautiful pictures. What other ones do you send? And, you know, what goes into those, you know, determining what different types of media to send to different people at different times?

McGregor: Well, you know, the catalog is definitely the thrust of it. And, you know, you can test and iterate on the catalog for men, the creative, you know. It probably wouldn’t go as wild as you would with multi-variant testing, digital ads. So you tend to gonna have one main piece you send. Now, something else that I think is interesting and is new, I kind of lump it under digital even though technically it’s a direct mail touch point is this postcard program where we’re doing with a company called NaviStone.

And if you come to the website and you leave without making a purchase, and 24 hours later we’re gonna send you a postcard. And that can be tailored to, you know, have imagery from a category you were looking at, it can be targeted just like a display ad can. You can always think of it as an offline display ad.

So that’s kind of interesting way that we’re using direct mail that’s not just a static catalog that we’re sending to our buyers and to our prospects, back on, you know, the side of mailing those guys, mailing our buyers and our prospects, there are smaller catalog formats where you start to see postage breaks. So that’s kind of where we like to test, you know, rather than testing different creative’s or different covers, you know, we recently tested what we call a Slim Jim.

We normally have a 52-page catalog it’s like, you know, 8 by 10, this is a smaller thing, about half the size of it, only 16 pages and because of the special format the postage price is significantly less like 40% less than we’d normally pay for postage and that’s one of the biggest expenses of the catalog.

So, you know, we tested, well, are we gonna lose, you know, more sales than money we save from sending the small book versus the big book. In the very recent tests that we ran, we actually found that it wasn’t worth it. We were better off sending the big book to our customers.

Those are the kind of tests that we do. It’s like, can we mail a smaller piece, can we mail, you know, a more cost-effective piece that allow us to do even more prospecting or mail our buyer file more efficiently. You know, and then we have something like I mentioned the sort of remarketing touch point of this trigger postcard program. But that’s about the extent of the ways we’re using direct mail today.

The Trigger Postcard

Andrew: The trigger postcard program that’s something that I’m guessing you could really like do with log-in customers you have their address because they’re… Was there any other way you could, I mean, if you could do that for universally, everyone who can be at your website that would be phenomenal. But I’m guessing that’s impossible, right?

McGregor: This where you sort of get into the, you know, little spooky, you know, world of, you know, data crunching and like, this kinda goes back to databases too. You know, we’re not doing it based off of logs. I guess you could probably come up with a way to do it that way. What we’re doing is we’re utilizing basically a massive cookie network.

So if you’ve logged-in on any of these sites or made a purchase on any of these sites or identified yourself in some trackable way across many, many, many websites, they’re able to match for us. And that’s, you know, there’s a couple companies. We’re using one called NaviStone, there’s another one called PebblePost. I think there’s maybe a few others out there, but, you know, we are matching that I think probably about 35%, right?

So of that bucket of people that we know aren’t existing buyers from us or not existing customers, people that just came, prospects that we spent money to drive to the website who left without converting, about 35% of those through the dark magic of the big data we’re able to match up and send them like a postcard, you know. And the cost starting out for that is 75 cents per postcard which, you know, normally like, you know, our big 52-page catalog would be something like 65 cents to put in the mail.

On this thing it’s just 75 cents just for a little postcard, but, you know, you’re paying for the technology, it allows you to deploy it within 24 hours and the matching, and everything else.

On that program, you know, we’ve been seeing anywhere between, you know, three to four to one return on that. You know, of course, you gotta factor in the other marketing costs you spend to get that person to your website, but when you look at it by itself it’s been pretty effective for us. And we’re just starting to get to the point where, you know, we’re tailoring the creative based on what the person was looking at on the website.

Andrew: If you aren’t convinced already in 1984 it has arrived…

McGregor: Yeah. It’s been alive with the direct mail world for a long time and, you know, now, all of the internet and digital ad platforms, and data collection is just supercharged in a big way. So, you know, on a personal level it… costs a little bit. But as a marketer I know as long as what we’re doing is good, we’re not trying to get in front of not do anything bad, I’m not trying to get in front of anybody we don’t wanna be in front of, you know, it can be a really effective way to reach out to people. Particularly, when you’re trying to create that demand and not just capture it through things like paid search.

Designing a Print Catalog

Andrew: Yeah. So we talked about a little bit about ROI a rough sense, how you get the names for prospects or, you know, targeting your existing e-mail list. Let’s talk about design. What goes into, let’s say somebody wants to start, you know, just a regular catalog, what goes in and it’s just gonna vary based on the niche, of course. But what should, what maybe two or three things when somebody’s thinking about putting together a print catalog that they should really focus on in getting right?

McGregor: Well, again, I’m just gonna reiterate this, you know, the product has to be good. You wanna have some other validation hopefully that you have a product people wanna buy before doing this because it is expensive, you know. It’s a big cash outlay to get a direct mail program up and running. Now, there’s various ways to do that, but even at a lower end, you know, it’s still a chunk of change you’re gonna have to put out. It’s not quite as scrappy as, you know, getting up and running as in the digital platforms.

But in terms of the creative, you know, there’s a bunch of tips and tricks that, you know, the wisdom of 30 years of direct mail have brought up. But, you know, you wanna have a really compelling cover shot that goes without saying, I mean, the cover you can kind of think of like your subject line, right? So, you wanna give something that’s intriguing that’s gonna get those people to at least open up the catalog to pages two and three. And that first spread, that two or three spread is the most important spread in the book.

So working at an agency you see this a lot, you know, you have these people that are really passionate about their brands, they are passionate about their story, you know, there are these interesting people as founders, and they wanna take, you know, the space on pages two and three, and they wanna tell their story and show a nice picture not show any product, you know. And that’s just one of those big mistakes like what you do on that first spread could, you know, can make or break the book honestly, you know. So you wanna be putting your best foot forward.

Think about the cover as subject line and then, you know, think about what is your very best most widely-appealing product, you know, put your best foot forward on pages two and three, and then get deeper into your product catalog, the deeper the catalog goes. And then the back cover also is pretty important too because, you know, they will come in the mail and people will see the back and the front cover before they open it up.

So, you know, front cover, pages two and three, and the back. And you wanna really have, you know, compelling creative. It depends on what you’re selling. With apparel, you know, we probably spend more effort than you would have to, to sell, you know, electronics or commodity goods, you know. We go on location, we got to get the right models, we gotta make sure the clothes fit, we gotta have a stylist there to make sure that, you know, when we take the shot that the clothes look just exceptional on the guy.

So it’s a little trickier for apparel, you know. So, it depends on what you’re selling like, that creative effort is going to vary a lot depending on the product that you’re selling. But for us, it’s a lot goes into the photo shoot, a lot goes into the graphic design.

Printing Costs

Andrew: And what about for printing? I was gonna ask you what it costs you to print your catalog, but the variety in terms of you could and you could go get over, you could spend 100k I’m sure to put together a catalog if you went to the moon. But maybe we can move a little bit into the printing. So you’ve got your lists, your names, you’ve got the catalog designed, and it comes time to actually printing it out, a lot of different things here.

If somebody is let’s say you’re doing a run of let’s say 10,000 catalogs. What for maybe a catalog of let’s say 30 pages, what does that cost? Is that something in color is that gonna cost $1 at scale? Is that gonna cost $6 or $7 at scale?

McGregor: So, you know, I think a way to look at it is and this is how we kind of roll-up, and look at cost in our life with the catalogs is we look at cost per book. We call it cost per piece and revenue per piece. And, you know, say for us it’s 65 cents to, you know, get that catalog in the mail, you know, probably 10% of that is gonna be printing.

And the lion’s share of that 65 cents is gonna be postage if it’s not, you know, postcard or Slim Jim or one of these alternate formats, you know, you’re gonna spend 35 to 40 cents depending on the lion you’re sending. You know, on postage for piece, 35 to 40 cents of a 65-cent piece, right? So that’s the biggest expense right there. Printing, you know, is probably 10% of that total cost once you find a good partner.

Andrew: McGregor, even for a big catalog like a 30-page color catalog? You’re looking at 10% of the cost of a 60-cent stamp it’s you’re only looking at pennies to print that?

McGregor: You are. I mean, really, the printing companies, you know, various market forces have gotten very cheap, very competitive, and you can print really effectively. Now, look, if you go to somebody and you’re like, “I’m only gonna print, you know, 100 to 500 or 1,000 catalogs, I’m gonna stuff in my outgoing shipments,” which by the way is another great use of catalogs, you know, you’re gonna pay much more for printing.

But if you have, you know, a direct mail program not even a huge one, I’m not talking J.Crew I’m talking, you know, what we’re sending through Linksoul maybe 100,000, 200,000, 300,000 catalogs per season. And maybe you have four to six seasons a year, you know. That kind of volume yeah, you’re talking about really pennies. It’s a penny business when you get down to it.

Andrew: That’s amazing. I would have guessed one of those catalogs would have been $2, $3 or $4 dollars to produce, which is…

McGregor: No, it’s great. I don’t know, are you familiar with the company Everlane?

Andrew: Oh, no.

McGregor: Okay. They’re one of my favorite apparel companies. And they were one of the first in the apparel space to come out and say, “Look, we’re gonna make products in the same factories as these super high-end brands, but we are gonna sell online, direct to consumer, no wholesale, no added cost. So we’re gonna sell it to you basically at what, you know, retailers pay wholesale for it.”

So, you know, at a fraction of the cost you’re getting something that’s the same quality, you know, you would buy in a very high-end store from a very high-end brand. And they have, you know, you should anyway you should check it out. Their whole model is transparency.

So if you go to a product page they’ll actually give you a breakdown for the material, for the production. They’ll show you the whole cost structure for it and what they’re selling it to you, and what their markup is. And, you know, in the apparel world we usually like to keep that, you know, pretty oblique. That’s kind of radical for someone to open up the robe and show you what that cost structure is.

But, you know, when they mailed their catalog and they have a catalog, and it’s interesting, I’ve only received it a few times. I think they’re just testing a little bit, but even on the back of the catalog every piece of marketing, they show you what that cost breakdown is, you know. And there’s was like, I think 68 or 70 cents or something. What we’re thinking, “Well, I know that they’re not lying because that’s pretty close.” And we were thinking, “Well, they could probably get a better deal if they, you know, switch printers or something.” But, you know, it’s…

Andrew: And what was their name again?

McGregor: Everlane, E-V-E-R-L-A-N-E, Everlane.

Andrew: Very cool. I’ll check them out. I like that model, it’s interesting.

McGregor: Yeah.

Elements of a Killer Catalog

Andrew: What if someone thinking about doing a catalog here, you’ve got, you know, all the elements of this, you’ve got just to get a catalog out the door, you’ve got the design elements, of course, the printing, and then the mailing. Should you have that, you know, back when we were talking before we hopped on here working for, you know, working at your company where you really handled a lot of not even just the printing and mailing, but all of the logistics and fulfillment returns for brands.

So you’re familiar with this world. Should somebody try to patch these all through these together with different companies? Because there’s the specialization allows them to do a really good job or especially starting out, are there really good choices for someone who can do the design, the printing, and the mailing all under one roof?

McGregor: So, there are a couple of companies that could do that, there’s a couple of agencies that could do that. My old company, you know, is one of them to plug them a little bit Phoenix Direct.

Andrew: And they are can you mention them?

McGregor: They’re not actually based at Phoenix, they are based out of Atlanta or near Atlanta, you know. They offer some other services as well as customer service fulfillment’s, turnkey thing. But one of the things they do really well is they produce catalogs they deal with the creative, the coordination, the mail planning, the printing, the reporting, all that stuff.

You’re gonna end up, you know, you’re probably best to find someone who has experience doing it and there’s consultants out there too, you know, someone you can pay, you know, they call a mail planner. You could pay some of these people just a couple of thousand bucks a month and they will coordinate all those pieces I just talked about.

They will help you do your forecasting, they will help you plan out your mail plan, you know. A lot of these people have been around a very long time, so they’re seasoned and they’ll keep you from stepping in some really big holes that’s super valuable.

And they can even help you, you know, find and negotiate contracts with printers and, you know, that’s really, you know, you have up to three kinds of parties you have to deal with, you have, you know, the creative piece to get the catalog designed, you have the mail planning piece, the strategic piece of that about, you know, what your costs are gonna be, how many you’re gonna send, what you expect to get, and then you have the printing that you deal with.

And most of the printers out there they’ll actually interface with the postal service to get those in the mail and there’s things like cost savings where they can, you know, you can do certain dates where you co-mail with other companies that are sending catalogs and get some savings there.

But, you know, there are some places that are one-stop shops like my old company, Phoenix Direct that was one of the things we did. We try to roll it all up, the whole direct-to-consumer model and to just, you know, one party you dealt with. But there are plenty of companies that do specialize in, you know, direct mailing catalog production. Just a couple off of the top of my head, CohereOne is one that’s on the West Coast.

They do all those services, they are a consultancy that will help you get all that stuff done, they’re not just a consultancy, they’ll do the design work and stuff too, you know.

Belardi/Ostroy is another one. There’s actually quite a few of them out there, but doing it yourself probably not recommended unless you personally have experience with it. There’s just, you know, so much wisdom that you can stand on the shoulders of the people that went before you and hire someone that will keep you from stepping at big holes, and make sure you have confidence in spending what, you know, will end up to be a pretty significant amount of money.

Monitoring The Catalog Customer

Andrew: When do you stop sending to someone, you know, kinda in the e-mail world we’ve got this idea of keeping a healthy list and managing open rates. And if people haven’t, you know, opened an e-mail from you in six months it’s probably time to stop sending to them for the sake of the list and raise some other reasons. How do you think about that with direct mail? Do you stop sending to people and if you do, what kind of process is that.

McGregor: Yeah. I mean, it’s just it’s not vastly different from the concept of approaching e-mail, you know. It’s all about segmenting, and bucketing your customers, and then tracking them. You know, what I’ve seen is that yeah, like, you know, once you get someone who hasn’t bought from you in over a year, those people are certainly gonna perform worse than the people that have made a purchase from you in the trailing 12 months.

But a lot of times, you can justify, you know, mailings of pretty, pretty old customers and you end up reactivating them. In our case at Linksoul, we’ve just stopped mailing customers that are, you know, older than two years. But really, you just segment them up, and you track them, and, you know, you know what your cost is, and you know what you’re getting from each of those segments, that you start to see where it stops making sense, and you cut those people out.

Measuring Success in Print

Andrew: How do you guys think about…we touched on this a little bit early on about attribution in measuring success. One way that you alluded to or mentioned was that you can just track, you know who you’re sending to, you know they’re in your customer database and so you can sense how effective they are but how and I guess on the prospect side too if they’re not in your database already, you’re probably pretty sure they’ve emailed and that was a trigger but do you tie a lot of things like coupons for example?

Do you tie a lot of attribution tracking with unique coupons for different mailings to be able to attribute sales to that channel? How religiously or religious are you about tracking success tying that in? And how much are you open to this thing like, you know, applying that old advertising adage, you know, half your ad spend is wasted, you just don’t know which half and how open are you to saying that, “This is something we know probably is coming back to us, even if we can’t track it we’re gonna continue to do it because we just know in our gut or we anecdotally feel like it’s working”?

McGregor: Well, the nice thing is, you know, there’s a process that exists where you do know, you know, 100% or close to, you know, close to certainty, you know exactly who you mailed and you know exactly who purchased from you, you know. So you’re really getting pretty darn close to having a complete picture and, you know, I should mention that’s one of the third-party you would deal with is we used to call them service bureaus, all catalog companies.

So basically a data company, a company that will take your mailing file, ingest it, and then take your order files in the backend, adjust that, and do various, you know, processes on the data to match back with a lot of certainty where you know.

So you don’t actually need the coupon codes as a way to say, “Oh, this was used X number of times, so we’re confident about that.” You can actually use that match back data with quite a bit of certainty. Now, on top of that, you should probably particularly on your prospecting campaigns that you send out, you probably should, you know, test putting an offer, you know, on the front or back of that catalog, and, you know, putting a coupon code on there.

But at the end of the day, you know, you could go out there and get a company to do this match back for you and know very confidently, you know, who you mailed, and who ended up ordering from you.

Direct Mail Mistakes to Avoid

Andrew: What mistakes have you guys made with direct mail that other people can hopefully avoid?

McGregor: I think some of the biggest pitfalls which you kinda get the fundamentals down, you know, would be probably under merchandising a catalog. That will hurt you, you know, having really not enough product to put in a catalog. And now, you don’t have to have like a 50-page or 100-page book, but you’ve gotta have product density and a product assortment relative to the cost of your piece.

But, you know, if you’re selling less, you know, probably than let’s say 50 products, there’s probably no direct mail format that’s gonna work out for you, you know. The number of products in the catalog what you’re putting in front of people is extremely important to how that performs.

So, you know, maybe going and doing catalog too early is something that can, you know, cost you some money and burn you a little bit. Again, a super common mistake is not utilizing those key spaces on the catalog. Again, putting that founder’s note, on spread two and three at the beginning instead of product that will dramatically in some cases, affect the performance of the catalog.

That’s a really common one because everyone thinks their story is unique enough and compelling enough that the story is good enough to put there and that will suck them into the rest of the catalog and they’ll keep shopping. But, you know, no matter how good that story is that it’s usually not the case.

And, you know, even Linksoul, even in the beginning again some of our advice, you know, we had that note in the front and now, if you look at… You know, I think it would be really interesting, you know, when we do this sometime, when you take a look in our first catalog, we take a look at the catalog now we look at the differences. And some of the things we’ve improved on that have had a big impact on making that catalog perform better is really utilizing those key places in the catalog while making sure we have good merchandise density.

And then really on the photography side, focusing on product detail, you know, we used to kinda photograph and show product like you would see on a category page on a website.

So I’ll lay down just a bunch of shirts next to each other with the pricing information the networks find online, but you get a lot better response when there are more romantic shots. And I’m not necessarily talking about it being on a model, but if you have a sweater, and getting up close, and showing what that texture is like, giving some sense if the item has a unique detail to it.

Make sure you obviously show that visually not just, you know, mention it in the copy block, you know. At the end of the day, you know, you’re selling pictures. That’s what you’re doing with the catalog. So you better have really, really good pictures, the quality of those pictures correlate directly to the performance of the catalog.

The Future of Direct Mail

Andrew: One last question before we kinda wrap up and do the lightning round in closing. But do you feel like we have the potential to come full circle on advertising, you look at direct mail, you know, 25 years ago before they have an internet and e-mail, and that was where so much promotion came from.

And granted we still get a lot of junk mail today, but I don’t see the overload for most people is digital on their phones and their inboxes, and, you know, maybe even on TV, on a screen somewhere, do you think we’ve come or are coming full circle where using direct mail is gonna be an advantage just because it’s a channel that so few people online are using right now?

McGregor: I think it is. I think particularly for the new breed of retailers out there that grew up digital, grew up in digital, grew up in e-commerce, you know, they’ve written off a lot of those older tactics, the direct mail is one of them. So I kind of see two scenarios quite often.

One is an old company that doesn’t have the confidence or the appetite for risk to really expand into new digital channels and the other is the newer companies that do all that stuff extremely well, they’ve got all their digital channels like, you know, like finely-tuned machines, and they’re looking for places to grow. And, you know, I think a lot of them might not even think about direct mail, it’s not sexy, it’s sort of an old tool. But as a result, you know, a lot of those newer companies aren’t using that touch point.

And I think for us it’s, you know, it’s been good, there’s a good bit of men’s apparel. So that one is not…that one is, you know, fairly populated, you know, in the catalog space, but I could think of some other categories of products we’re selling where people just aren’t using direct mail at all or not using it very much. And, you know, now, I think for a lot of the new school guys who has sort of tapped out their growth on these digital channels.

There’s ways to use direct mail, you know, to kind of push past that plateau and even use it in ways like the triggered postcard program I mentioned, you know, use it in ways to complement your digital program, you know. It’s just one more touch point, you know. I kinda look at it I don’t care if I’m spending money online or offline. I just wanna find those most impactful touch points and, you know, fund those to grow the business.

The Lightning Round!

Andrew: Really good stuff. And kinda like a closing here on the personal side I wanna do a lightning round with you. So feel free of course to answer these rapid-fire. If you had to identify the number one thing you’re trying to optimize your life for right now, what would it be?

McGregor: Free time.

Andrew: Oh, who is someone you strongly disagree with?

McGregor: I feel like saying our president is kind of a cop-out, but I’m gonna go with the easy answer on that one. I think we all know who I’m talking about there.

Andrew: How much money is enough? What would be your number of money in the bank, the amount of money in the bank?

McGregor: Yeah. I think that one, you know, I know there’s various calculators and things out there. But, you know, for me personally I think, you know, $5 million would be an amount that, you know, you can manage, and draw from, and sustain a quality of life.

Andrew: What’s the worst investment you’ve made in the last 10 years?

McGregor: I’m a huge fan of Blue Apron when they went public. Now, honestly, I knew that I was way, way too rich when they went public. Anyway, that’s kind of an interesting business.

Andrew: Nice and what’s the best investment apart from any business that you’ve owned that you’ve made in the last 10 years?

McGregor: Let’s see. Well, I’ll keep it relevant and I’ll keep it in the stock market for us. So, not long after Shopify went public I’ve been a huge fan of the concept and the company for a long time and when they went public I’m like, “Yeah, sure. I’ll bet on these guys.”

Andrew: Very nice. And that one was right in front of so many of our faces that we didn’t even jump up on, myself included. And finally, the last question, what’s the first CD you ever owned?

McGregor: “Weird Al” Yankovic. I guess it’s got a great… I forget the album name, but it’s the one with the cover of “Gangster’s Paradise” on it.

Andrew: Oh, you’re bringing back memories, my friend, very nice. Well, McGregor, this has been awesome. I appreciate you. You kinda rolled back the curtain on some of your direct mail strategies, and thoughts, and ideas. And yeah, excited to see what you do with Linksoul in the future. And thanks for not only doing this but for being a member of the private community. It’s been great having you in there. I appreciate it.

McGregor: Yeah. You bet. That was a lot of information and, you know, feel free to…anyone could reach out to me and get more information, you know. I would say direct mail and catalog is can be a really, really good strategy to grow your business, but just approach it with the right amount of caution and make sure you know what you’re doing.

Andrew: Awesome. Thank you, sir.

McGregor: All right. Thank you, Andrew.

Andrew: That’s gonna do it for this week’s episode. But if you enjoyed what you heard, check us out at ecommercefuel.com where you’ll find the private vetted community for online store owners. And what makes us different from other online communities or forums is that we heavily vet everyone who joins to make sure that they have a meaningful experience to contribute to the broader conversation.

Everyone who we accept has to be doing at least a quarter million dollars in annual sales on their store. And our average member does seven figures plus in sales by their business. And so if that sounds interesting to you, if you wanna get, you know, connect with a group of experienced store owners online, check us out at ecommercefuel.com where you can learn more about membership as well as apply.

And I have to again thank our sponsors who help make this show possible, Klaviyo who makes e-mail segmentation easy and powerful. The cool thing about Klaviyo is they pull your entire catalog, customer, and sales history to help you build out incredibly powerful automatic segments that make you money on autopilot. If you’re not using them check them out and try them for free at Klaviyo.com.

And finally, Liquid Web, if you’re on WooCommerce, if you’re thinking about getting on WooCommerce, Liquid Web is the absolute best hosting platform for three reasons. One it’s built from the ground up for WooCommerce and optimized by some of the best industry professionals in the WooCommerce who work for that space that really know this stuff. It’s highly-elastic and scalable as well as comes with a whole suite of tools and performance tests to optimize your store. You can check them out and learn more about their hosted WooCommerce offering at ecommercefuel.com/liquidweb.

Thanks so much for listening. I really appreciate you tuning in and looking forward to talking to you again, next time.

Want to connect with and learn from other proven eCommerce entrepreneurs? Join us in the eCommerceFuel private community. It’s our tight-knit, vetted group for store owners with at least a quarter million dollars in annual sales. You can learn more and apply for membership at eCommerceFuel.com. Thanks so much for listening, and I’m looking forward to seeing you again next time.

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