Kevin Hillstrom: MineThatData

Times Change

2026-07-28T20:10:00.000-07:00

Times change, folks.

Did you know that somebody at a catalog agency works on the Amazon Toy catalog?

It has to be a fascinating feeling ... for a quarter century you watched Amazon systematically consume an "industry". You watched, mostly helplessly, as catalog brand after catalog brand either went out of business, were rolled-up within umbrella companies, or reduced circulation to the point of not even being a catalog brand anymore. Your agency competitors contracted or went out of business.

Then it got worse.

Remember back in 2022 when the catalog brands that still existed couldn't even get paper? The VP from Midland Paper mentions here the 50% decline in catalogs in "recent years". My estimates suggest 80% of all circulated pages have been removed from commerce in the past twenty years.

Somehow you worked through all of that. And then you're given a new assignment. It's your job to work on the Amazon Toy catalog.

Jarring!

You've fought against the incessant encroachment of Amazon on catalogs for decades. Now you help them complete the task, helping Amazon further contribute to the contraction of what used to be an "industry".

Catalogs are alive at Amazon, and they're alive among Zombie Retailers like Saks.

We should expect this to happen. As costs soar out of control, the brands that can support catalogs are those with hyper-loyal customers, brands that could care less that costs to put catalogs in the mail increased roughly 25% over the past three years +/-.

Years ago I joked that in the future the only catalogs in the mail would come from Amazon, who would mail (literally) everybody because they were the only brand that could still afford to mail catalogs, the only brand that doesn't need to prove ROI.

My joke could come true.

Times change.

Rebuilding

2026-07-26T20:10:00.000-07:00

I watched a program on linear television (#gasp #oldschool #luddite). A pair of perfectly wonderful sisters were running a restaurant that was unprofitable. The sisters didn't want to change. They served gigantic meals at unrealistically low prices ... paired with ridiculous monthly rent, they were flying their plane into the side of the mountain.

Something had to give.

They had to serve less food.

They had to raise prices.

They had to reduce expenses (i.e. fewer people).

In other words, this restaurant needed to "rebuild". They were like the Arizona Cardinals, the Los Angeles Angels of Anaheim, the Utah Jazz, the Vancouver Canucks, the Wisconsin Badgers Football Team.

Our Country needs to rebuild. No need to go further.

A generation of ecommerce businesses (founded 1995 - 2015 ... think legacy brands like Stitch Fix) are ready to rebuild, if they haven't already begun to rebuild. They're like that house you built in 2011 ... it needs to be painted, floors need to be replaced, appliances don't work, bathrooms are tired. We know this is true when growth stops. We know this is true when merchandise productivity erodes. We know this is true when email marketing hasn't fundamentally changed post-COVID. We know this is true when somebody says "Facebook isn't delivering quality names".

My catalog clients? Forced to rebuild. It's like your Hall of Fame quarterback just retired, except in your case your paper / printing / postage partners keep increasing costs to the point where the discipline they love is ending because of their cost increases. You get to rebuild as a digital marketer.

Like the NFL Team rebuilding after losing a Hall of Fame Quarterback, it can be hard to understand "what" needs to be rebuilt. A great quarterback covers a multitude of sins. Now your defense is on the field more often. Your new quarterback holds onto the ball too long, making it look like the offensive line is bad. Are they bad?

If you are rebuilding, you likely need analytical guidance, so you can tell if your defense / offensive line / etc. is in need of fixing. Same thing in ecommerce. You have to know "where" your rebuilding efforts need to be emphasized.

Share of Demand by Advertising Channel Detective

2026-07-23T20:10:00.000-07:00

This one came up in the past year. I noticed a problem with a business.

Regardless of the attribution method (they're all wrong and yet they're called "truth" by so many in the industry), it's pretty easy to play detective and identify a business that is not healthy.

Healthy Business:

40% of Sales Happen Organically, Without Aid of Advertising.
20% of Sales Happen Via Email Marketing.
20% of Sales Happen Via Search Marketing.
10% of Sales Happen Via Social Media (Paid + Organic).
10% of Sales Happen Via Other Marketing Channels.

Unhealthy Business #1

10% of Sales Happen Organically, Without Aid of Advertising.
15% of Sales Happen Via Email Marketing.
35% of Sales Happen Via Search Marketing.
15% of Sales Happen Via Social Media (Paid + Organic).
25% of Sales Happen Via Other Marketing Channels.

Unhealthy Business #2

5% of Sales Happen Organically, Without Aid of Advertising.
65% of Sales Happen Via Catalog Marketing.
12% of Sales Happen Via Email Marketing.
15% of Sales Happen Via Search Marketing.
1% of Sales Happen Via Social Media (Paid + Organic).
2% of Sales Happen Via Other Marketing Channels.

Whether you are trying to rebuild your business or are looking to buy/sell a business, this is a good guideline for you to reference. Unhealthy businesses generate very little demand/sales organically (without the aid of marketing). Healthy businesses did the marketing years ago, earned trust via the merchandise they sell and consistently good customer service, resulting in ongoing sales that do not require marketing.

Unhealthy businesses possess two key attributes.

Marketing is required to generate sales. Less marketing, less sales.
One marketing channel is responsible for more than half of annual demand.

Again, most of you are not looking to buy/sell a brand (if you are, I'm the person to evaluate the health of the business ... kevinh@minethatdata.com). Most of you are looking to rebuild your business or maintain it. Use what you've read this week to rebuild/build your business.

"Cheating" Detective

2026-07-23T20:10:00.000-07:00

In the 2016-2018 timeframe Private Equity folks asked me to evaluate a business that they felt was "cheating".

What does "cheating" mean?

It means the brand was somehow boosting net sales in a manner that wasn't ideal for the future of the business.

When I reviewed ad spend, I didn't see anything unusual.

8,500 lines of code later, my detective work paid off.

13-24 Months Ago = 15% (numbers disguised here) of sales from discounted/promo items.
Past Year = 55% (percentage disguised here) of sales from discounted/promo items.

In other words, Management decided to make it look like the business was surging, when in reality Management was cheating.

At this time, Management had not provided Private Equity with their p&l ... you can't hide from the p&l of course ... discounting leads to lower gross margins, which would have set off alarm bells.

If you are selling your business or rebuilding your business, best not to cheat. Do the hard work.

Playing Merchandising Detective

2026-07-22T20:10:00.000-07:00

In the 2016-2018 timeframe, I was asked to evaluate a business that was simply bumbling along. I was told to figure out how a company with a reasonable annual repurchase rate (35%ish) could struggle to grow, even though customer acquisition efforts were being managed properly.

This is when you have to become a Merchandising Detective.

Very few clients manage merchandise consistently over time.

It's easy to see when the CFO demands higher gross margins. I'll see an immediate price per item purchased increase that is immediately paired with a customer response decrease and/or conversion rate decrease.

It's easy to see when a merchant quits or is fired. The new merchant comes in, has disdain for what the predecessor did while disrespecting what previously worked (see Lands' End 2014-2015ish for examples), leading to a new vision that is "trend right". Sales plummet and it takes 2-5 years to dig out of the mess. Nobody wants to hear that message, but that's frequently the message you deliver when playing merchandising detective.

It's easy to see when the paper / printing folks interact with unsuspecting catalog merchants. Costs increase by 20% or 25%, the unsuspecting catalog merchant cuts pages, the pages that are cut are not supported via digital marketing, and sales decrease ... then the paper / printing folks belittle the merchants for "being stupid". It's a common story post-COVID.

If you are planning on selling your business (catalog brands) or rebuilding your business (many ecommerce brands are in the rebuilding stage right now), you'll need a stable merchandising base. Take two years and build your merchandising foundation. This isn't the time to hire a "maverick" who takes risks. You need the smartest people possible to put together a multi-year plan to put your business on stable ground.

Playing Detective

2026-07-21T20:10:00.000-07:00

This is way back in 2016. The Private Equity firm wanted to buy a catalog brand. Their initial review of the data showed that the brand "bumbled" along for several years ... and then eighteen months ago the business surged. "Tell us the scheme this brand employed" was the mission.

What "scheme" did the brand employ? What is your guess?

Did you make a guess?

It took me all of four minutes running this business through 8,500 lines of code to reveal the reason. They juiced up their customer acquisition efforts for about a year, then let all those new customers pay off handsomely via well-analyzed customer lifetime value metrics while throttling back customer acquisition, thereby making the p&l look utterly robust.

This is the kind of stunt you can pull off when you mismanage your business for a considerable period of time and then the owner wants to buy a yacht at the same time that a smart marketer/analyst figures out the secret to success. When executed properly, Private Equity pays a higher multiple for the business.

Of course, it begs the question ... why wasn't the brand smart enough to do this in the decade prior? If it was smart enough, the business would have sold for 2x - 3x what it sold for.

The best time to properly manage the inflow/outflow of customers was ten years ago.

The second-best time to properly manage the inflow/outflow of customers is tomorrow morning.

A Healthy Business Metric

2026-07-20T20:10:00.000-07:00

If I asked you the following question, would you be able to answer it?

For every twelve-month buyer you earned through the end of 2025, how many marketing dollars will you spend speaking to the customer in 2026?

I'm willing to bet the following:

Fewer than 1 in 2 readers could come up with a credible estimate. And a credible estimate is a good thing ... it will immediately tell you if you have a marketing problem.
Fewer than 1 in 40 readers have actually measured the metric (email me kevinh@minethatdata.com) if you have actually measured the metric ... we'll determine if my estimate is correct.

Why is this metric important?

The metric is a measure of business health.

The best businesses generate "some" volume from marketing, especially via their customer acquisition efforts. These businesses frequently have a 10% ad-to-sales ratio. The brand might spend $5.00 per year marketing to the twelve-month buyer ... with most marketing dollars spent acquiring customers AND the merchandise is so compelling that the customer willingly purchases on her own with minimal prompting (AND the prompting is email / organic social which costs next to nothing).

Many profitable ecommerce businesses generate considerable volume from marketing. These businesses frequently have a 20% ad-to-sales ratio. The brand might spend $12.00 per year marketing to twelve-month buyers. They spend a lot of search and paid social, and unfortunately those dollars reach indecisive twelve-month buyers considering shopping from the competition ... the marketing dollars are a tax the brand pays because their merchandise isn't compelling enough. Vendors and Agencies will tell you that the marketing expenditures lead to increased profit. They tell you this for a good reason ... "they" increase their own profit. The higher level of ad-spend most likely leads to more profit dollars for you, sure, but it is at a sub-optimal rate, a tax you pay for not having compelling merchandise.

Then we have those catalog marketers with ad-to-sales ratios between 25% and 30%. They're disconnected from modern ecommerce. The acquire half or more of their customers via traditional lists and co-ops. They send 20 catalogs a year to their twelve-month buyer file. Their email marketing metrics look awful (and worse, an agency convinced the brand to attribute email orders to catalogs). They cut-and-paste catalog creative on Instagram then say that Instagram "doesn't work". Paid Social is considered a "waste". Paid Search orders are attributed to Catalogs. These brands spend $20 per year marketing to their twelve-month buyer file, making it very difficult to achieve a robust business that yields a 10% pre-tax EBITDA.

If you are trying to sell this business ... good luck. Few people want to purchase advertising-dependent businesses. Even fewer want to buy advertising-dependent businesses catering to 72 year old customers via paper.

Are you spending $5.00 per year per twelve month buyer?

Are you spending $12.00 per year per twelve month buyer?

Are you spending $20.00 per year per twelve month buyer?

When A Business Has Long-Term Potential

2026-07-19T20:10:00.000-07:00

There are things that are somewhat easy to fix.

When I see a business that needs 300,000 new/reactivated customers and is only acquiring 200,000, I usually see a marketing problem that can be fixed. The client may not see the problem that way, but it's a tactical issue that can be resolved.

Businesses that have long-term potential have a signature other businesses don't have. Long-term potential businesses acquire customers that generate plentiful downstream profit. I can also tell if the business has smart marketing/analytics employees ... if the business acquires customers who generate plentiful downstream profit, smart employees compensate by acquiring customers at a loss (or as a proxy their customer acquisition efforts have an unnaturally low ROAS).

Business Without Long-Term Potential.

Customer Acquisition ROAS = 4.00.
Profit on Acquisition Transaction = $2.00 per customer.
Year 1 Downstream Profit per Customer = $4.00.
Year 2 Downstream Profit per Customer = $2.00.
Year 3 Downstream Profit per Customer = $1.00.

Business Without Long-Term Potential, Managed for Short-Term Profit by Smart Marketers/Analytics Professionals.

Customer Acquisition ROAS = 8.00.
Profit on Acquisition Transaction = $12.00 per customer.
Year 1 Downstream Profit per Customer = $4.00.
Year 2 Downstream Profit per Customer = $2.00.
Year 3 Downstream Profit per Customer = $1.00.

Business With Long-Term Potential, Well Managed by Marketing/Analytics.

Customer Acquisition ROAS = 2.00.
Profit on Acquisition Transaction = ($10.00) per customer.
Year 1 Downstream Profit per Customer = $15.00.
Year 2 Downstream Profit per Customer = $11.00.
Year 3 Downstream Profit per Customer = $8.00.

The first business is one you don't want to acquire. Management doesn't know what they are doing. Marketing/Analytics don't understand the importance of profit.

The second business is worth considering only because smart people work there. It's the same business! However, the marketing/analytics folks generate enough profit acquiring a customer ... they understand that the customer doesn't have long-term potential ... so they optimize the business to make it profitable today. The buyer is purchasing "smart people" in this instance.

The third business is one that Private Equity or smart professionals want to purchase. ROAS isn't low because it's low ... it's low because marketing/analytics over-invest in new customers, losing money on the acquisition transaction to net out handsomely over three years. The owner of the first business would gladly lose $10.00 to profit $34.00 over three years ... but she can't do that because she sells merchandise that customers don't want often enough to generate future profit.

All of these dynamics are determined by "what" the brand sells. If you sell something that can be purchased year-round and the customer wants to buy it 2-3 times per year, you have the third business. If you sell something the customer only needs once every-three-years, you are managing the first business or the second business.

The first/second business cannot be fixed by the marketing/analytics folks ... it can only be optimized. The first/second business has a merchandising problem - the business is selling merchandise that customers don't want often enough to generate sufficient profit.

If you are wondering ... yes ... consultants see the first/second business every single day. Try telling the Chief Merchandising Officer that he isn't selling merchandise that customers want often enough to generate sufficient profit.

Alarms Go Off In My Head

2026-07-16T20:10:00.000-07:00

Here's a must read if you think AI isn't a bubble that is going to explode and wreak havoc (click here).

This is the quote that caused alarm bells to go off in my head: "This kind of mythology only grows in an environment deliberately deprived of good information."

There it is!

Ecommerce is misled by the mythology of conversion reporting, failing to understand customer relationships because Shopify shows conversion on an item among loyal buyers is 9.4%.

Catalog marketing is misled by the mythology of the matchback report (and for some bizarre reason an obsession among paper / printing folks on neuroscience).

Email marketers are misled by the mythology of open rates (a tactical metric but not a revenue-generating metric).

Social media marketers are misled by the mythology of engagement (a tactical metric but not a revenue-generating metric).

Search marketers are misled by the tyranny of ROAS (a revenue limiting metric).

Every one of us (myself included) deliberately deprive ourselves of good information in an effort to believe in the shared mythology that motivates us in our daily work but causes us to fail, to perform in a sub-optimal manner. We believe in a false marketing idol of some sort.

We don't have to do that.

Selling Your Business

2026-07-15T20:10:00.000-07:00

When I talked about Private Equity last week (click here), I didn't expect to get the feedback I received ... from some of you about buying/selling businesses.

So, yes, if you are thinking of selling your business or buying a business, I still perform evaluations of ecommerce brands. I'll point out everything positive I see, I will perform an analytical biopsy on that odd looking patch of skin, I'll forecast out where the business is likely to head over the next few years.

If it is a catalog-centric business, there's nobody on Planet Earth who is better positioned to discuss what the future holds for that business than me.

Contact me now (kevinh@minethatdata.com) if you are thinking of buying/selling an ecommerce business.

Yes, You Need To Experiment With Merchandise

2026-07-13T20:10:00.000-07:00

Here's what I frequently see. A client launches new items in 2019 ... a class of items. I then measure the sales of these items by year thereafter.

2019: $25,000,000.
2020: $40,000,000.
2021: $31,000,000.
2022: $23,000,000.
2023: $16,000,000.
2024: $10,000,000.
2025: $7,000,000.

Not only is this what I frequently see, this is just the way things work for the vast majority of clients. It's just how business works.

This is why you have to constantly replenish your assortment with newness ... why you must constantly experiment with new product lines or extensions within your existing product categories. You have no choice.

Put on your lab coat, grab a beaker, and start experimenting.

Two things.

1 - It's ok to have no idea what you're doing. You're experimenting. Try things. Something is going to work. In no way am I saying you should be reckless. Don't discontinue stuff that works great to fund your experiments. Nope. I see it all the time in my work. Be smart about keeping the stuff that works and squeezing every last penny of profit from it.

2 - For the marketers in the audience, it's your job to amplify the experiments performed by your merchants. Support your co-workers. Give their new items exposure in email, on the socials, on your home page.

It's time to start experimenting.

Now What?

2026-07-12T20:10:00.000-07:00

Years ago, an ecommerce client stopped growing.

Of course, I could see it coming. For years I told them that they were growing because they could acquire customers at a reasonable cost. For years I told them that growth would end in a few years.

I'm not sure this client believed my words, my analyses, my forecasts. They were growing.

Months before the forecasts suggested the end of growth was near, their merchandise productivity dipped marginally ... just 5% (+/-). That was it. Growth stopped.

The Executive asked me a question.

"Now what?"

Yeah, now what?

The time to perform your lab experiments is when your business is thriving. That's when you introduce a new product line. That's when you create a new brand out of thin air. That's when you attempt to sell in a marketplace to see what happens. That's when you personalize your email marketing campaigns. That's when you explore AI and Influencers and TikTok, you name it. You experiment. You try things knowing that the majority of what you try will fail ... it's an experiment, it's ok to fail.

But you do that when you have a multi-year cushion before growth stops.

The second best time to begin your lab experiments is tomorrow. Maybe business is awful. So what? If you don't start your experiments tomorrow, how are you ever going to dig out of a challenging situation.

The second half of 2026 requires experimentation. If you want to thrive in 2027-2028, you have to identify tactics that work today so you can capitalize on them tomorrow.

Also - it's ok to fail. You'll need to fail a lot to identify a handful of successes. Don't listen to those who paralyze you with ROAS metrics and dashboards with little red stop signs next to your experiments.

Reminded Of This Grumpy Gem From 2015 And The Forced Transition To Loyal Buyers

2026-07-09T20:10:00.000-07:00

I looked at the data.

Prospecting Response Down Significantly Post-COVID.
Ad-Costs Up 25% In The Past Three Years.
Huge Circulation Cuts Among Lapsed Buyers and Prospects.
Dire New/Reactivated Buyer Counts After The Circulation Cuts.

The response to this problem is obvious (digital marketing). It was obvious in 2005. It was obvious back in 2015. It's obvious today. Doesn't matter. I'll hop on a video conference and it is clear that to the people on the other end of the computer the answer is not obvious.

During a particularly moody time as a Consultant (2015) I wrote this grumpy treatise (click here). As Millennials might say, it was "hella-popular" back in the day.

2015 was an interesting time ... the structural element of old-school cataloging (i.e. dying co-ops) altered the business model. Smart catalogers were well into their move into digital marketing at that time ... structural changes did not mean much to them. For others? Private Equity came calling.

2026 is so darn similar, but for different reasons. Now it is paper / printing / postage that represent the existential threat. Your own business partners are the ones that are converting the marketing channel to one that will only apply to loyal buyers in the future. This time Private Equity isn't nearly as interested in this business model. You can guess why.

Loyal Buyers

An acquaintance told me that his business was supporting the bankrupt/resurrected Saks empire with catalogs. Retail Dive boldly proclaimed that Nordstrom has their biggest Anniversary catalog ever. Amazon mails a catalog.

What are the common threads across that paragraph?

Huge Brands.
Big Budgets.
Loyal Buyers.

Catalog marketing certainly works among Baby Boomers, a well documented fact. If it works at all among younger customers (not documented at all for good reason), it works among the most loyal buyers.

If there is a future in catalog marketing, it is with Loyal Buyers. They will be the only segment of customers who produce enough revenue to overcome the prohibitive costs imposed upon you by the paper / printing / postage folks.

Perform a little thought experiment for me. Pretend your productivity improves by 5% over the next three years. Assume that your ad costs increase by another 25%. Run a p&l on each segment. Which segments "work"? Which segments need to be cut?

Works = Loyal Buyers.
Doesn't Work = Everybody Else.

In 2015 structural problems with response (i.e. co-ops) led to a catalog crisis that Private Equity capitalized on.

In 2026 structural problems with ad costs (paper / printing / postage) are leading to a crisis and Private Equity isn't as interested as in the past. This means catalog marketing will shift to a Loyal Buyer marketing channel to overcome high ad costs. Your job is to have a plan for how you will acquire new customers in this framework.

I realize many readers don't want to hear that message, especially readers in the vendor world. You're in paper, you've been contracting for a decade or more, you need to feed your family. You need to convince your current customer base to spend more for the exact same product they've always purchased. If your current customer base doesn't spend more? Bad for you. If your current customer base spends more? Bad for your current customer base.

This is a different structural problem than the one in 2015 (when co-ops were failing to produce responsive names and clients began to struggle to acquire new customers). The 2015 structural problem could easily be overcome with digital marketing for new customers and catalog marketing (as part of a portfolio - big for some, small for most) for existing customers.

The 2026 structural problem? Much worse. We're not going to beat it.

Dover Saddlery

2026-07-08T20:10:00.000-07:00

There are plenty of articles and obituaries ... this is just one of them ... and here is a video from Reddit.

Do you remember? Dover Saddlery was a publicly traded brand in 2015 with annual sales at or around $100,000,000 (likely 40% or 50% larger today). From there, some believe it became more a financial vehicle and less an equestrian brand within the private equity world.

From 2013 through about 2019, I did A TON of work for Private Equity, evaluating catalog brands. I have not performed one single catalog project for Private Equity post-COVID. There's a reason for that. Following the COVID-bump (mid-2021), this asset class contracted and suffered. A scan of the internet suggests intense anger toward Private Equity. Warranted. There needs to be balance. "Traditional" brands with a catalog heritage simply have not changed fast enough, and when they do (cough cough Orvis) they're beaten to a pulp by an incandescent and struggling former industry. Seriously ... ask a long-term catalog professional to describe feelings toward Orvis ... be ready to receive some serious vibes.

A few weeks ago I reviewed a list of former clients from 2007 - 2025. At least a third are out of business! Gone. My God. I get it ... #capitalism ... but it doesn't have to be this way.

I have so many clients with catalog heritage that have come out the other end. They've taken risks, they've thrown away elements of the past, they've accepted the future. They persist. They realized they sell something customers want/need, and they focused on what they sell, not "how" they sell it.

They have a story to tell, and they do a fabulous job of telling the story.

Private Equity tells a financial story. Big difference from a merchandise/brand story. Load up a brand with debt, fail to tell a compelling enough merchandise/brand story to cover the cost of the debt, and adhere to tradition ... that's trouble. Ask Eddie Bauer.

I can only imagine the competitive advantage some are exploring because of this outcome.

"I Just Don't Believe You"

2026-07-07T20:10:00.000-07:00

That's how an Executive once responded when discussing the results of a mail/holdout test.

The results were really straightforward. Take an average of the twelve-month buyer file, select 50,000 customers randomly, then resample the group of 50,000 into two groups ... one receives the catalog, one does not receive it. In the six weeks the catalog was active, I measured total demand spent by the mailed group, I measured total demand spent by the control group.

$6.00 spent by the mailed group.
$4.00 spent by the control group.
$6.00 - $4.00 = $2.00 of incremental demand.
Organic Percentage = $4.00 / $6.00 = 67%.
Profit = $2.00 * 0.40 - $0.90 = ($0.10).
To The Twelve-Month Buyer File, On Average, The Mailing Was Unprofitable.

It was the last bullet-point that shook the Executive. The very thought that the heart and soul of his customer base was being managed in an unprofitable manner by ... the Executive himself ... the fact that the Executive was actually harming his business ... was unacceptable.

So he told the room ... "I just don't believe you".

The room moved forward, harming the business.

If you are unwilling to believe the most simple level of scientific inquiry, I'm sorry, you need to reflect inward.

Do you want to hear a story about a room deciding that they finally believed "facts"?

It's 2006 at Nordstrom. When we executed a mail/holdout test, we could measure sales on our proprietary credit card within Nordstrom ... and at other brands. We could see if customers used the Nordstrom card to spend more at Neiman Marcus, or Saks, or Amazon. Was our catalog taking business from Neiman Marcus or Saks? No. It didn't impact those brands, brands we believed we competed with.

Amazon? In 2006?

$10.00 spent at Amazon in the Mailed Group.
$7.00 spent at Amazon in the Control Group.
$3.00 per customer incrementally driven to Amazon.
15,000 credit customers per mail and holdout group.
Results were easily statistically significant.

Want to know something even worse? Within the mail and holdout groups.

$25.00 spent at Nordstrom in the Mailed Group.
$23.00 spent at Nordstrom in the Control Group.
$2.00 per customer incrementally driven to Nordstrom.
15,000 credit customers per mail and holdout group.
Results were easily statistically significant.

Do you see what happened there?

Our brand-centric catalog at Nordstrom, in 2006 (we ended the ecommerce catalog program in mid-2005), DROVE MORE BUSINESS TO AMAZON THAN TO NORDSTROM. Imagine if that was happening to most catalog-centric brands (hint - it probably was)?

In the my early consulting days (2007 - 2012), I'd share this fact with catalog clients. The Executives would just sit there, dumbfounded, thinking about the consequences of driving more business to Amazon than to their own brand. Then they'd move on, pretending they never heard what I shared, because having to face the data was just a bit too much for the recipient of the message to accept.

However, when I shared this fact at Nordstrom in 2006, the data was immediately embraced. Nobody questioned it (though they frequently questioned mail/holdout results). They immediately understood the strategic implications illustrated by the data.

Nordstrom is still here.

Most catalog brands went out of business or were gobbled up by parent companies, thereby losing their identity.

I understand why you don't want to believe mail/holdout results. It's an outcome that requires sober reflection.

I understand why your paper rep doesn't believe the results. They "can't" be allowed to believe them.

I understand why your printer doesn't believe the results. They "can't" be allowed to believe them.

I understand why your boutique agency doesn't believe the results. They "can't" be allowed to believe them.

I understand why so many consultants don't believe the results.

But it doesn't mean the results are wrong.

There's always a group of individuals who chose to not believe data. Modern politics comes to mind. You don't convince people with "more data". You work around them. Because you are reading this, you're willing to accept what your customers are telling you - that's a good thing!

At Bats

2026-07-06T20:10:00.000-07:00

I watched this podcast from Orita about email marketing (and other stuff - click here).

One of the speakers talked about "at bats" ... this isn't entirely what he meant, I'm converting his topic into my world, but he was essentially describing the importance of the customer "doing something".

I've told you about this previously ... I worked with a company where the email marketers were very interested in open rates and total sales. The data suggested something interesting.

Customers who clicked-through two email campaigns per year were the customers who mattered to their email marketing program.
Any customer who clicked-through an email campaign in the past thirty days was likely to shop via any marketing/physical channel.
Clicks were very important (opens, not so much, conversion was good but was random while clicks were reliable). Specific clicks were even more important ... merchandise-centric clicks mattered more than promotional clicks.

A simple segmentation plan was created (something I've created variants of for the past fifteen years - your mileage will vary).

Segment 1 = 2+ Email Click-Throughs Per Year.
Segment 2 = Anybody With An Email Click In The Past 30 Days.
Segment 3 = 1 Email Click In The Past Year, Not In The Past 30 Days.
Segment 4 = All Other Email Subscribers

It shouldn't surprise you that the vast majority of attributed email sales in the future came from customers in Segment 1/2/3.

Also of interest ... getting a customer to click once on positive content (i.e. merchandise) caused the customer to become more likely to click in the future ... compound interest. I bring this up because this aligns with the podcast commentary at the start of this post. It's the concept of getting more "at bats". Email marketing functions on "at bats" as the podcaster said or "compound interest" as I'd say. If you build a program that encourages more clicks, you have more customers in Segment 1/2/3 above. If you have more customers in Segment 1/2/3 above, you will have more sales in the future. If you have more sales in the future, you'll increase customer lifetime value, generating more profit for your business in the future.

And if you have more "bad clicks" (i.e. clicking on sale messages or free shipping), you'll find your email list is biased (in a bad way) when compared to your overall customer file.

A sadness of the modern era is the inability for all of this technology to point out compound interest in a meaningful manner. Many of you overcome this sadness and are able to grow your businesses. Good job!!

Subscriptions / Continuity Programs / Merchandise Categories

2026-07-05T20:10:00.000-07:00

My Pickleball Mathlete subscription (click here) is an interesting way for me to practice being a marketer.

You can subscribe for free, or you can pay me $30 a year. I make sure free subscribers can see "some" of each article I send to subscribers. About 1/7th of my subscribers pay me. I'm sure some of you would see that as a failure. Who could blame you?

Those with real marketing chops go steps further than I do. They're managing Continuity Programs. These are the smart people. They know what one of their customers is likely to prefer "next". They enroll their customers in these programs ... if the customer doesn't like the program, the customer opts out and the brand moves on. Each purchase, each category purchased from, moves the customer into a different stream of content and commerce. Sure, the business model was popular in the 80s/90s (get twelve movies on VHS free, then buy one movie per month for a year). But the business model is completely applicable today.

Stitch Fix leveraged elements of continuity marketing ... they knew what you bought and what you'd likely prefer next. They called it a "subscription" because the Silicon Valley folks like modern terms for old ideas. Make no mistake ... at a simple level, they knew what you bought, they knew your purchase categories aligned with what you were likely to prefer next, then they sent that stuff to you ... that was a 2015 version of a continuity program.

The secret to ecommerce success is to identify like-minded cohorts, anticipate what they'd like "next", then give it to the customer before the customer knows the customer wants it next. Take a look at continuity program brands ... those who sell collectibles, or coins, or stamps, and think carefully about what they're doing and how it relates to you ... especially if your customer base shops infrequently.

Happy Birthday!

2026-07-01T20:10:00.000-07:00

America turns 250 in a few hours!

Enjoy the long weekend!

The World Cup

2026-06-30T20:10:00.000-07:00

It was fun for the first 2+ weeks. People taking over Times Square, Scots drinking Boston dry, somebody from Australia eating at a Waffle House, that kind of thing.

We're in the knockout stage now, and fans are going through the blender.

You are probably being told by somebody with a keyboard that your "brand" must capitalize on World Cup momentum.

Apparently AI thinks it is 37 degrees in Houston at the game The Lemonhead is attending.

All of the reasons the World Cup is special (and it isn't special if you are not a fan of soccer/football) work against your CFO's need to deliver a net sales increase of 5% this month AND when the World Cup is over. What does the CFO ask everybody to do next year to "comp" World Cup success?

You know you have something powerful if you can convince a family to spend $10,000 attending a World Cup match in a foreign country.

You might also have something powerful if a customer is willing to pay $49 for a widget. But it is a different kind of "special", and amazingly, it likely requires harder work to move the widget than to sell tickets to a World Cup game.

Buc-ee's Is Open

2026-06-29T20:10:00.000-07:00

They expected 75,000 attendees the first few days - to get there, you had to drive 6.4 miles out of the way so that traffic was managed appropriately.

Fan Video.

There are a LOT of videos on the socials (click here).

P.S.: One of our intrepid readers told me that "nobody wants to work anymore" in response to store hiring challenges. Buc-ee's has no problem finding workers, and they openly publish what they pay people. Do you openly publish comparable salaries? Are your salaries competitive/better? Do you pay somebody $25/hour to clean your bathrooms?

P.P.S.: One of the new employees told me he has to park a mile away and take a shuttle to work. It funny how Retail Dive and/or other retail-centric trade organizations don't even bother to focus on this retail business model, much less point out how successful you have to be to force your employees to ride a shuttle a mile just to get to work.

Let's Insert a Bit of Reality

2026-06-28T20:10:00.000-07:00

Yeah, I'm a little tired of reading about the neuroscience of print and emotional engagement.

Let's think about the actual / quantifiable ways that many of you have seen your catalog-centric efforts work. My ecommerce readers can take the day off - enjoy!

Average Order Value: If you run a business with an AOV north of $500, you can make catalog marketing work. Try doing that with a $55 AOV. That doesn't work, and it doesn't matter how many Gen-Z recipients have "digital fatigue" as the print folks say. I had a B2B client with a $700 AOV. That AOV covered "ALL" catalog marketing sins. The future of catalog marketing is gigantic AOVs or ...

Highly Loyal Buyers: If you don't have a $700 AOV and want to continue your craft for the next decade, your catalogs will avoid low-response customers/prospects ... the math does not work. If you have a customer with a 70% chance of repurchasing with 6+ purchases per year ... that's a situation that works.

High Frequency Contact Strategy: Every one of my contact strategy optimization projects suggests that the most loyal customers are being UNDER-CONTACTED. If you want to practice your craft, you'll figure out how to contact your most loyal customers WEEKLY. Yes, you'll have to do that. I know you don't want to do that.

Winning Items Only: Enough "sharing our assortment with the customer". That's what you did in 1996. It's 2026. You will only be able to afford to put the absolute best-selling stuff in front of the customer (this applies to email marketing too).

Targeting: Gen-Z DOES NOT CARE about your 56 page Summer Sale catalog. At all. Millennials don't care. Gen-X mostly does not care. Catalog marketing is a Baby Boomer discipline. I'll catch heck on LinkedIn for saying this (#hedoesntunderstand #digitalfatigue #neuroscience). Just look at your response data by age cohort. Seriously. Go do it. Don't look at a survey of 277 likely ecommerce shoppers ... look at your own data by age cohort. You'll need to mail your very best customers, you'll need to filter out most customers < age 60 unless they purchase only in the in-home week when you send catalogs, you'll need to focus on customers who call your contact center. You'll need to filter out customers who buy items that reduce the likelihood of a future purchase. You'll need high AOV customers or high response customers. You don't need AI (other ecommerce brands are going to need it). You need common sense.

Nostalgia and Fox News: That's what you are competing against, and you are likely better at nostalgia when it comes to resonating with Baby Boomers. You are not competing against Amazon. You are not competing against Macy's. You are not competing against Buc-ee's. You are competing against Fox News, and your version of nostalgia has to be better than their version of it. Your ability to garner attention in short bursts needs to be better than their ability to garner attention six hours per day.

Incrementality: So many of you choose to ignore the results of your mail/holdout tests. "I JUST DON'T BELIEVE IT!!" Of course you don't believe it. If you believed it, you'd have to do something drastically different, and you don't want to do that, do you? Believe your incrementality tests. Please! Not believing your mail/holdout test results is comparable to not believing that our planet is an oblate spheroid ... you're just ignoring evidence for ... well, for preservation of your profession I suppose.

Cost Increases: To overcome the immense damage caused by your paper friends, your printer, and the USPS (they all want you to transfer money from your profit line to their net sales line, for varying reasons), you are not going to be able to be a sloppy marketer. I've been amazed that the paper folks have come after you, criticizing your marketing efforts as not being sufficient to drive response. Your efforts are sufficient, their cost increases break trust. I've analyzed many of your businesses in my Elite Program - your comp segment performance is up 50% in the past decade for some and probably averaging a 20% increase across all catalogers analyzed. You aren't the problem. You'll always be able to figure out how to be more productive. But you'll act accordingly as the paper / printing / postage folks continue to disrespect your loyalty.

Orvis: Those who email me seem to have contempt for Orvis, as if they betrayed the trust of the entire marketing community in New England. Readers, have you looked around? Do you have comparable contempt for Lillian Vernon? Do you have contempt for Universal Screen Arts going bankrupt a few years ago ... because they no longer mail catalogs either?!! How about the Newport News catalog? It's gone, they aren't mailing either. As best I can tell, a whopping 80% of catalog printed pages have been removed from the mail since 2001. This isn't the fault of Orvis. They're doing what they have to do to not become the Newport News catalog. Your mileage will vary, no need to be resentful. Maybe your business applies to the positives above ... if so, keep doing what you're doing. But you aren't obligated to keep doing what you are doing. Wells Fargo didn't keep selling gold dust via express shipping, they changed as times changed.

You are a smart professional, and you know what you need to do to maximize the productivity of your business. Go make good things happen!

AI Already Knows What You Should Do

2026-06-25T20:10:00.000-07:00

I gave one of the AI applications a quick task. I gave it annual results for a segment of customers. I shared catalog costs, profit factors, average catalogs mailed to the segment for the year. I told the application the organic percentage.

In my contact strategy algorithm, I determined that the segment received twelve mailings on average, and should have received nine to achieve optimal profitability.

Within five seconds, the AI application created its own curve of diminishing returns, then authored a solution of 8.7 catalogs to achieve optimal profitability.

Several things.

This is probably bad for my business. Wrong. More on that in a moment.
If you are able to speak properly to AI and provide data in a manner that AI can deal with, AI should be able to guide your entire investment strategy as a marketer. No need for a third party to tell you that ROAS was 3.443 in June, worse than the 3.184 measure in May.
This is really good for YOU. You get to experiment without having to write 3,000 lines of computer code yourself or have somebody else write 3,000 lines of code for you.
If you ask questions the right way, you should be able to see what the future holds for your business.

Here's why this isn't bad for business - the minute you do things better than last year, your optimization solution needs to be recalibrated. Let an algorithm do that - analysis of categories and customer interaction with merchandise categories is where your success comes from.

AI probably won't be good for quite awhile at knowing how you should assort stuff to customers (others will disagree with me) ... but it already knows what you should do to optimize what you're currently doing.

Reasons "Brands" Don't Trust What Others Say

2026-06-24T20:10:00.000-07:00

Thirty years ago at Eddie Bauer, I'd receive a Monday call from a sales person responsible for weather software. Not a call every few months. A call every Monday.

"Hi Kevin, it's Tom from Weather Solutions. How's your family doing? Listen, I don't know if you noticed, but there is a cold front coming down from Ontario that is going to change everything. Temperatures will be fifteen degrees below normal in New England this weekend. Are your stores ready?"

I'd explain that we were an outerwear brand. I'd explain that our stores were always ready for a cold front. He was undaunted. "Kevin, imagine the sales gains you'd experience if you followed the advice of our software like leading brands do, and you put your outerwear at the front of the store? Customers would notice. Sales would surge. All because of our software. That's the opportunity you are missing out on."

We'd have the same inane discussion in May. "Kevin, it's going to be fifteen degrees above normal in Ohio this weekend. Imagine how sales would surge if you had this level of intelligence and put swimwear at the front of the store ... all because of our software."

For this guy, every problem was a problem that would be solved by moving products to the "front of the store".

After awhile, I'd see his number on caller id and take the call just because I wanted to hear this week's sales pitch.

And awhile later, I stopped taking his inane calls.

He probably thought ... "another dumb brand with employees who just can't see the future."

You're probably dealing with somebody who wants to solve your "AI Problem" for you. You know you'll solve problems with AI in the future. But you won't hire this guy. Nope. Because you don't trust this guy, in the same way I didn't trust the weather pundit from 1996.

Or, you're dealing with somebody who wants you to focus on neuroscience that generates emotional engagement.

I used to deal with a Forrester Research sales professional who spent months figuring out the weak link in our salesperson defense program (it was a Credit Vice President). I'd attend a 10:00am meeting, walk in the room, and there was the guy, smiling at me with a look that said "you can't beat me". Well, I can beat you ... as a consultant I never once recommended Forrester Research because I couldn't let my clients run into this guy. Short term gains, long-term pains.

Sometimes "brands" simply don't trust what you are saying ... the employees aren't stupid, the employees simply have been burned so many times by vendor reps who make life miserable for their victims that they simply shut down and stop trusting anything.

We've all worked with vendor partners who are brilliant, kind, and have our best interests at heart. If you find an individual like this, hold on to him/her like grim death.

Email Marketing Article From 1996

2026-06-23T20:10:00.000-07:00

Here it is ... click to see who the author was/is.

Old-school articles were different, weren't they? Here's an image of the bottom of page one of a twelve-page missive from Don Libey in 2005.

On page three, he discussed the political polarization (caused by economic disruption) that began with Ross Perot and would dominate our discussions in 2026. He missed the jet fighter fluid that would be poured on the topic by Fox News, for nobody is perfect. He argued that people studied individual trees when they needed not just to study the forest but the regional and global issues that influenced the forest. A good analogy for 2005. Imagine if he'd seen the forest fires coming and tried to explain why they would happen? He'd have been mocked (more than he already was for trying to tell you about the future).

Back to the email marketing article.

I've worked with more than three hundred "brands" in my twenty years of consulting. Here's a quiz question for you. How many of those brands did a good job with email marketing, the kind of job that Seth Godin would be proud of?

2 clients.
17 clients.
29 clients.
50 clients.

The answer is (1) ... two clients.

Two!!

The first client had a young female employee who presented her findings to the Executive Team, showing all the profit she generated for her company. As she left the Executive Conference Room, one of the Executives whispered to me "God, what a nerd".

It's easy to lose faith when you hear those comments.

I was once asked to speak at a conference - the conference asked me to attend a dinner for Executives attending the conference. One of the CEOs, sitting across the table, said "Why should we listen to you, you are just a nerd? Meanwhile, we run businesses!" The table chuckled. Yeah, ha ha. Funny. I later created a term to define this person. "Lemonhead".

Two years after Seth Godin wrote the article at the start of this post, Management at Eddie Bauer asked him to speak to Leadership. The most used phrase I heard from co-workers after he described his premise of "Permission Marketing" was "we're not going to do that". Of course, Eddie Bauer went bankrupt multiple times since then, but that's a topic for another day. Any vision of the future that goes beyond standardized, routinized, templatized work is one not likely to be embraced.

There are reasons that nearly every single company scrubs the humanity out of public-facing work.

Garden variety Managers and Analysts don't want to do the additional work because they won't be recognized for the brilliance required to do it and they won't be compensated for their efforts.

Directors and Vice Presidents don't want to do the additional work because if the additional work "doesn't work" they won't be believed/respected the next time they want to implement something important to them.

C-Level Executives and Owners don't want to do the additional work because it doesn't align with their "vision" for the future.

So nobody does the work.

Which means the competitive advantage of "doing the work" has never been greater ... even for a discipline like email marketing that is three decades old.

Subscribe To Our Channel On YouTube

2026-06-22T20:10:00.000-07:00

Here's the image from Skagit Speedway on Friday night on FloRacing (if you didn't understand a word of what I just said, no worries, that's our modern world, where things only matter within the 10,000 people who care).

"Subscribe to our YouTube Channel". If you do that, you can watch every race on Saturday night for free instead of paying to go an hour north of Seattle / an hour south of Vancouver to pay $20 to watch the races.

That's what a small dirt track that features sprint cars north of Seattle wants you to do.

One of you recently told me that "video is not who we are" when queried on the topic.

Really?

Does what Midland Paper thinks more closely align with who you are?

I mean, read that ... my goodness. "Emotional Engagement". Notice there are two things not mentioned in the word salad ... sales increases ... and profit. #telling

There are frustrating days. Today is one of those days. Come on people, a dirt racing track in Northwest Washington should not be a better marketer than you are!