Episode 77: 50 Years of Direct Mail Experience, 1 Podcast

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‍Transcript

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Announcer

Welcome to Nerd Marketing, an original podcast for e-commerce operators and marketers looking to level up. Drew Sanocki and Michael Epstein will bring you actionable strategies from their decades of running eight and nine figure brands, along with interviews and insights from the leaders of some of the most successful brands in the world.

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Drew 

Hey, everybody, Drew Sanocki with the Nerd Marketing Podcast. Today's guest is Tracey Migliaccio, who is running direct mail at a company called Human Supplement Wellness Company. But she has a long background in in DM and in direct mail. She ran direct mail at an apparel brand called Wolverine World Worldwide. So that's Sperry, Keds, Merrell, Saucony, Harley Davidson footwear, Hush Puppy, Caterpillar, and a lot more. And she ran direct mail at Vistaprint. And we really go deep on direct mail, where it's been, where it's going and why it's still a much more compelling channel than you think. And one that really stacks up very well against Meta on prospecting and against email on retention. So, hope you enjoy this podcast with Tracey. Thanks.

Let me know what you're doing now at Humann.

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Tracey

Now as in the most current up-to-date time, we're looking for a programmatic direct mail partner. And not to tip my hand too soon, but we've found one, wink, wink. 

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Drew

Oh nice, turn this into a demo.

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Tracey

So yeah, there you go. We're super excited about the things that we can do and kind of taking DM to the next level. We've tapped out the old tried and true. So now moving into programmatic and really getting much better about that one-to-one communication with customers will help us get a leg up on the competition. So very exciting.

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Drew

Do you say it Human or do you say it Humann?

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Tracey

We say Human. It's Human to the power of n, so infinite. You gotta be a science person to get that one.

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Drew

OK. Not human. I get it. I get it. Yeah, but I was really excited to talk to you. Not, you know, because of the possibility that we might work together, but more because of your background. I mean, I joke that no one who's been in direct mail is like under 40, like everybody's 40 and up. I'm 50s and it's just kind of, you don't find people who are into direct mail or who built their career on direct mail as much and you have. 

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Tracey  

I definitely have. 25 years I've been doing it. Very long time. It was the first thing I did. I worked for an educational cataloger called Delta Education. They were based in New Hampshire. It's now school specialties. And began working on their catalog. Genuine call center. People were sending in order forms or calling the call center and placing orders. Internet wasn't even there yet.

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Drew

Yeah, this was like the late 90s, right? You just send out the catalog with they have to have an 800 number in there in the call to action, call to order.

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Tracey

Absolutely. Or fill out the order form and send it back in with the, with the money for your order. So, I distinctly remember being either at a NAMOA conference or a DMA conference. And I was still a baby back then, and hearing people grumbling about this new internet and how email was going to destroy direct mail. And look at it, 25 years later, direct mail's going strong. In fact, it has longer staying power than email.

Drew 

That's what I that's what I want to dig into, you don't hear that. I mean, that's a contrary opinion, right? Like I would say most DTC brands and e-commerce brands think that emails already won, but not that it's a competition, but like nobody uses direct mail anymore. And I would say most of the people we we've sold to at PostPilot have never done direct mail before. So they are a little bit like, oh, I didn't know that channel still existed.

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Tracey 

It's baffling to me that people aren't tapping into the potential because when I look at the volume of orders and revenue I can generate on a single campaign compared to a single email campaign that may have, you know, seven sends to that same audience and have triple more of the volume, direct mail smokes email. It completely blows it out of the water. It is a trusted median, it's super tactile. You have to touch it and see it before someone disposes of it. Where now people are just trained to go through their inbox and click, and then just delete. They don't even have to open emails. Direct mail, you have to touch it. You see it. So there's two pieces of tactile, you know, impact there that can definitely help. And it's just, it's crazy that people don't do it. And yes, you know what? I think it comes down to the cost.

Direct mail is so expensive when people look at that upfront thing and you know, I've faced that every company I've been at compared to email it is, but you're paying for something that's premium because email does not perform at the same level as direct mail, it just doesn't. You know higher lifetime values, higher AOVs, repeat rates. Again, it's that trusted piece. It's why banks still use direct mail. It is a trusted medium and more people should do it.

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Drew

We've done a lot of tests where you take the same campaign, the same creative - say you're running a 10% off offer on this category of apparel - and you send it to half to your email list, the other half the audience's direct mail. And yes, the email costs pennies to send and the direct mail is gonna cost

a lot, relatively. But the response rate is so much higher from direct mail that it offsets the cost and you end up just getting orders of magnitude more in terms of revenue and ultimately profits off the direct mail send. 

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Tracey

That's absolutely true.

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Drew

The ROI looks worse because it's not based off the cost. Like the cost of email is so cheap, the ROI is going to be high. You're still going to have a positive ROI off direct mail, bu I think what's lost is just the magnitude.

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Tracey 

That's a great point. It is, I think people do get hung up in the pricing. I think that they see the pricing and that throws them off because email is so cheap. And there's an assumption that you can just accomplish marketing/ And brand search is super expensive too, and it's super successful. If you want something to work really well, unfortunately, sometimes it costs more. But if I were to mail a hundred people, not that I ever would, or email a hundred people, direct mail's performance, that uplift is a hundred times better. I mean, that conversion rate is so much stronger that it just makes it worthwhile. You can ultimately give your customers less communication and drive more or as much revenue, whereas email, you have to constantly bonk them on the head to try and get that conversion or just to try and drive the same amount of money. 

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Drew 

So you're talking more about your existing customer list. Right.

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Tracey

Absolutely, or prospecting as well. Again, it goes back to that trusted forum. Direct mail is seen as trusted. People are more willing to try direct mail. I mean, I don't even know that people really do email prospecting anymore. It's flagged as spam and with CCPA. You know, people aren't doing it. At least with direct mail, you can, you can organically acquire or use social media to try and acquire, but again, DM, you can go out there. Lookalike modeling using your existing customer base to find people who look like it. You can still rent lists. It's very different than it used to be, but there's a lot of options with DM that there just isn't with email and doing that head to head comparison. Obviously there are other digital channels as well.

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Drew

We got compared to email on retention, on prospecting. It's more how DM stacks up against Meta. Have you ever sort of done a head to head prospecting Meta versus direct mail?

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Tracey 

I haven't, although when we did do prospecting in direct mail, I could see that my MER was dramatically stronger than what Meta's was. So ultimately that's the cost of the program versus the returns. Meta obviously has their own ways of targeting as well, that direct mail has their secrets and Meta has their secrets. You can get into the groups that people like. Again, I just don't know that it's necessarily seen as trusted and from a prospecting standpoint, trust is super important that people are gonna be willing to pay for something, they need to know that it's not going to be a scam or that they're actually gonna get what they pay for.

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Drew 

Let's pause for a second. I want to go through your career here. At Vistaprint, you were doing direct mail. 

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Tracey

I was at Vistaprint for six years and that's an eComm company that brought direct mail in. We did lots of great stuff at Vistaprint, external modeling..

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Drew

Yeah, what were they doing on direct mail?

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Tracey

When I came, it was very spray and pray. They also did prospecting through FSI's and Valpacs and programs like that, small return. We found that leaning into business cards, what is the one thing that a new business needs is our business cards. Back, we're talking when people still use them. And then it was still on the edge of shifting to something slightly different. So we began, targeting new businesses as a specific source of who needed new business cards. And that's kind of how we went that way from prospecting. We launched a catalog, did external modeling, participated in some co-ops. We did a lot of good things, definitely data related. I'm a proponent of data. Data is it. And you can send the most stunning package to the wrong person and it's not going to work. You can send something that is old time black and yellow, it looks hideous, but if it's to the right person then you have a greater chance of that return. 

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Drew

And then you went from there to Wolverine, which was kind of interesting and probably more relevant to the audience for this podcast, because it's a family of brands for those who don't know Wolverine, Sperry, Keds, Merrell, Saucony, Harley Davidson, Hush Puppies, Caterpillar. Do I miss any?

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Tracey

They sold off Stride Rite, but the kids shoes. I mean, I grew up with Stride Rite shoes. 

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Drew 

Same. So these are now I guess you'd call Wolverine as an aggregator. How did they use direct mail across the portfolio?

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Tracey

Each brand handled it differently. Merrell and Sperry were the two largest mailers. So they would do triggers from welcoming VIPs to site abandoners who left abandoned products in their cart or just abandoned the site. Some retargeting. They would do large piece mailings that just welcomed as the seasons changed, this is the new product line. No offers with still tremendous amount of success.

So Wolverine definitely mixed up how they used it. Each brand again was different. The big win that we had there was the retargeting. It was kind of what I had leaned into when I came in. It was a program that I wanted to launch. It really let me grow the revenue by over 200%. So it was just awesome while I was there.

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Drew 

Retargeting. I've read some data that says on retention or post-purchase, like postcards on acquisition catalogs or more real estate. Is there data behind that or have you found that to be the case? Like when you think prospecting, you want more real estate to put more products in front of a potential customer and on the other side, you can do more. You can get away with a postcard.

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Tracey

I’ve done head-to-head tests, response is definitely stronger on the larger piece. The cost is typically the deciding factor and it drives down that ROAS. It really depends on what a company is looking for. If they're looking to acquire more customers and aren't necessarily worried about the efficiency of the campaign, then definitely a bigger piece.

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I go back to data at that target audience. If there's a chance that it's the right person and that's ultimately what it is, more real estate might make it worthwhile. I lean into offers and postcards because you have that two seconds and it has to be big, bold, and in your face, you need to get that decision to either keep or, you know, destroy. So a postcard, you know, it's front, back, trash, or front, back, keep, whereas a catalog, it's a little heavier, it's a little bulkier, it might come inside and make it to the counter, someone might flip through it, it has longer shelf life, where postcards just don't have that staying power. It really comes down to what the ultimate goal of the company is. You know, conversion is definitely higher and a bigger piece because of that staying power. But if ROAS is king, then something that's less expensive will outperform a catalog from a ROAS standpoint. Catalog's pretty expensive. Post office does not seem to be letting up in postal increases, so it's getting expensive to mail. Catalogs are heavy and I don't think that a full size, oversized piece that's not letter rate, I can't imagine that will have long-term staying power with direct mail. It's just, they're getting too expensive now to mail. You know, now it's Slim Jim size where it's a letter rate and it's tall and narrower, so it'll fit into that. It's more cost effective, again, it's you lose some customers every time you take the size down a bit. But if ROAS is the important piece, the less expensive is better.

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Drew

We have customers that ask how to design the postcard. And I'm like, well, you've done Facebook ads. It's just like it's a visual. It's an ad. You know, you need a strong call to action. So maybe some urgency in there, some personalization like ‘Hey, this is on sale for this week’.

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Tracey

Singular focus.

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Drew

Yeah, the bigger real estate, you can tell a little bit more of your brand story, do some interesting things with photography. 

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Tracey

Yeah, absolutely. At Merrill, we actually moved out of full-size catalogs and took them down to trifolds. It performed again on the conversion, not quite as good, but the ROAS was stronger. And so that was the route we decided to go and actually made that shift.

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Drew

I get this question a lot on prospecting, any brands come to mind that grew almost entirely off of catalog without any digital spend?

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Tracey

I mean, you go back to the big boys, I mean, Bing made their stand in catalog, so did the Lands’ End, Cuddledown.

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Drew

Yeah, I'd love to look at what they do today. I mean I still get the L.L.Bean catalog in.

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Tracey

I do as well. Now I think with the catalog, earmark pages, or it's more of a magazine in my mind, I'm still placing the order online. And although I'm an old school direct mailer, I hope they're doing matchbacks because I'm the worst. I am not taking the time to enter any codes from the back of the catalog. I can't be bothered. Super simple, quick and easy. I'm going online and unless there's some kind of coupon or discount associated with it, iit's not going to happen. And I have to imagine they are doing matchbacks.

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Drew

What are you doing with direct mail now at Humann?

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Tracey

The bulk of what we do is all retention. We have done, as I had shared that compared against Meta, we didn't do a head to head test, but we did do some prospecting and it was a full size 8.5 x 11 size catalog, so it was far more expensive than prospecting, but we're doing mostly retention, mostly postcards. We went through a phase where we were focusing on profitability. And so that was taking down costs and postcards allow us to do that. So we mailed two Slim Jim size catalogs a year and everything else are postcards, which means singular focus, offer driven. They're not necessarily pretty or sexy or over the top styling, singular focus, focusing on one product or a holiday and here's your discount.

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And that's really the bulk of what we do. Moving forward, we're going to be able to do all sorts of testing that we're unable to do. I think one of the drawbacks with direct mail is it can be, I've always called it the tortoise. It takes, you know, 90 days from creative start to mail in home, finish, flow through the program. And that's a long time to wait for performance results. You're doing other programs while that's going live. Programmatic with that quick daily dropping, you can get a read as soon as you have, you know, significance, and then you can move right on to the next thing. There is no waiting until the campaign exhausts itself. And there's super large volumes, although profitable. Again, testing can be riskier. If you're doing a 50-50 and something just doesn't work, you know, that's half of your campaign that has underperformed expectations. It can be challenging. So programmatic definitely allows that nimbleness and being more flexible in how you do things. 

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Drew

We've seen some data that suggests that customers you acquire through direct mail spend more, higher lifetime values, higher AOVs. And so you've got to look at more than just the first purchase. You've got to see what that customer, you might acquire them via a Slim Jim or some sort of catalog, they come in, they buy, and then maybe they come back they're clicking through your email program or clicking on a paid ad. And so if you just look at the one purchase per customer in Google Analytics, you're going to see it attributed to email and paid. And then over here, you're going to see the catalog, which doesn't really track in Google Analytics. And that costs a lot of money. So we're going to cut it when, in fact, you've just cut the thing that's feeding these high lifetime value customers into your whole marketing program. So how have you gotten your head around that or done that analysis? Like do you use any tools to track from initial acquisition all the way through?

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Tracey

Yeah, I've been lucky that I've worked with some super great analysts in my past. And so we've done testing and they can get at and dig into data far more granularly than I can and just, you know, they kind of show some of the things you see, if you look at all the touches that someone gets or how that direct mail piece lifts as they go through, it kind of compounds everything to see that ultimate value.

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We definitely see that digital people aren't as responsive through direct mail. And I'm okay with that because they're not as valuable. I want the good people who have come on through TV or through radio, who've called the call center, people with like habits will perform similarly when they get something like direct mail and it drives them to the call center or another non digital path. And I think that's.

some of what is important for people to understand their customers and how they might respond or might act. What are like audiences? People might think direct mail and email are very similar. They're not. A lot of times people on email come in through discounts because that's the way that the email stays or they're constantly getting emails and they're flagging or saving bookmarking that email for use when they want to buy. Direct mail is not as frequent. Although the offer, obviously the carrot is helpful, but that once they come in, just that offline to coming in and responding online, you know, someone commits that way, it helps even increase that value. Someone who responds through an offline channel, it's why the conversion rates are so high because they've already done the work. They've already committed, gone to their computer to take action where it's emails all electronic, they just click or click through, same with paid search. I think it's the experience that helps bolster it.

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Drew

So have you run TV and radio ads too?

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Tracey

Humann does, yes.

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Drew

How do they do those other channels?

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Trace

They do super good. I mean, they're top of the funnel, halos, bringing in, you know, acquisition customers. But it's that response method for us that really makes it beneficial. People through direct mail, a lot of people go to the call center. We're also courting an older audience. So when radio or TV goes to the call center, it's that similar behavior. And these people tend to perform super strongly in direct mail.

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Drew

So you use that TV, radio, and top of the funnel content to drive, ideally, to the call center. Direct mail then plays sort of middle of the funnel.

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Tracey

Or lower, absolutely. Because it's got the power of targeting where some other channels really can't. They were kind of with search, you're kind of coming around. If somebody has searched for a term, you're coming in from behind saying, okay, we think you want this. Direct mail can actually target, you know, Joe Smith who wants XYZ or has bought. Therefore, you know, product recommendations are A, B, and C. So there's a lot of targeting. DM is just, it goes back to the data, it makes everything.

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Drew 

It's funny, there is this perception that direct mails for like older customers, that they respond well. There's also a lot of data out there, primarily put out by the Postal Service that millennials, Gen Z, they all respond to direct mail. Which I believe, but I also don't dispute that. I'm thinking of my parents and like at some point you're just not on the internet as much and you are still checking your mail so.

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Tracey

What I will say to that is the audience base for Vistaprint and for Wolverine. Those are not, you know, septuagenarians. They are a younger crowd and they're responding in direct mail. So there's less competition in the mailbox now. People pay bills online or automatically. They don't even have to get a bill anymore. People get excited about getting something in the mail. At Christmas, if you can lean into that, something that can work tremendously well. 

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Drew

Amazon brought back the catalog this Christmas.

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Tracey

It's so true. And actually I, I got a Wayfair one this year as well, another bossing company. I think they were definitely, it was a holiday gift guide, so people are starting to do it. I think that if they look at that as a singular point, they'll be disappointed. It's really a holistic thing and how you communicate with your customers. I don't know that a one-off is going to perform as expected. Wayfair is definitely an online company that created that, that kind of customer base. Sending a catalog is very different, although Vistaprint was successful in being able to pivot from online to offline. So it takes work. You have to stay with it longer periods of time. My recommendation to them would be to mail more frequently if they wanted to try and build a program. I think a one-off would be disappointing.

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Drew

Really curious to see what you do because it's all great advice. When you look back at your career, do any campaigns stand out as some of the best direct mail campaigns you've seen?

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Tracey

You know, it's something that you guys offer and I'm very excited that you do. There's a technology called Genuinely Penned it's how one company branded it, but it is the physical ballpoint pen. Telling out. Yep. So filling out cards. While I was at Vista print during holiday, their focus shifts from B2B to B2C and promoting holiday cards. We did a campaign Where we did a blind address that had a standard class stamp, but customers don't necessarily see that. And it was a handwritten or machine with pen-written card. And it was gangbusters because, and it was a card wishing people happy holidays. But of course, we did the carrot to come and get holiday cards from Vistaprint. The unmarked envelope, the handwriting, you know that had like almost 100% impression. Nobody gets that because people are gonna think it's a Christmas card. It's in that kind of an envelope. So I always call that my evil genius move. That was one of the best programs, one of the most memorable programs I've ever done.

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Drew

I mean, obviously we can't verify this, but you got to think the open rate on an envelope is 99 percent. They show up in a unmarked envelope with just a handwritten your address and your name. You're going to open that. And it's I think when you.

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Tracey 

I would say most people don't even know that there's technology out there that can do it. Consumers are going to see it and think they're getting a card. That's half the battle. You've got them to open it. You know, it's every second you can keep that piece of mail in someone's hand. It's closer to commitment. And it's just awesome technology. It's something that I'm looking forward to implementing this holiday season with Humann.

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Drew

We read some data. A brand had basically bifurcated their customers. They sent half of them handwritten thank you notes and they sent the other half like the same thank you note in email and the half that got the handwritten thank you note went on to spend twice as much. It was like twice the future lifetime value. And the theory is that you have a little bit of a human touch. It can be a handwritten note. It can be talking to somebody on the phone. You go on to spend more with the brand. 

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Tracey‍

Not to tip the hand on, you know, with the average consumer, but people just don't know that technology is there. They think that it is a handwritten card. It's how I intend to use it at Humann is a Christmas card. They're going to think that someone at Humann sent them a Christmas card. I would love to do inbox cards. You know, it's just like you said, that human touch. Now the company, I think who's doing it really well right now, and I still don't know how they do it, my gut is it's actually a person is Chewy.

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Drew 

I was talking to a Chewy marketer the other day and said, you know, the founder knew there was not a lot to differentiate the product from what Amazon had. So they had to differentiate the brand experience. And at one point, I read they had like a warehouse filled with people writing handwritten notes. I mean, this was obviously before the technology, but writing the handwritten notes to customers. 

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Tracey 

If it wasn't in a marker, I would think that it was technology., I've received cards in multiple colors and there's just no way. It's not blue and black. It's fluorescent pink and green. And I'm like, somebody's actually doing this. Um, when you stop and think of how much money the average person pays for pets, though, it's so smart. And they, I think between that handwriting piece and their subscription like they have set the mark, they've set the bar on what is expected.

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Drew 

Well, thanks for spending a half hour with me, Tracey. 

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Tracey

Time flew way by real fast.

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Drew
Yeah, this was fun. It's always good to talk to a practitioner of direct mail, somebody who's done it and done it well. 

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Tracey 

Thank you. I am definitely a super nerd. I did not, I did not divest. I stayed right on the direct mail path. I've just kind of done different things. So it's awesome.

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Drew

Yeah, I'd ask you what's next, but I guess you're still right in the thick of it at Humann.

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Tracey 

I absolutely am.

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Announcer

Thanks for listening to Nerd Marketing. Don't forget to check out all of the other great episodes, some of which include interviews with e-commerce marketing masters working with Mr. Beast and Joe Rogan, plus Drew and Michael's experiences in private equity, advice from VC firms on what they look for in investments, and so much more. Like, share, subscribe, and tune in every week for a new episode.

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