You Make The Decision

You work for an agency that helps a catalog brand determine their circulation plan. The Circulation Director required you to execute a holdout test. You told the Circulation Director she would lose sales by doing this, she told you to execute the test regardless.

The Circulation Director asks you to analyze the results. It's been sixteen weeks since the in-home date of the catalog. Here are the results.

• Total Catalog = $4.00 per book, average, via matchback results. No prospecting.
• Profit Factor = 40%.
• Cost of the Catalog = $0.90.
• Profit per Catalog = $4.00 * 0.40 - $0.90 = $0.70 profit per book.
• Mailed Segment = $4.50.
• Holdout Segment = $2.25.
• Incremental Demand = $4.50 - $2.25 = $2.25.
• Organic Percentage = 50%.
• Total Incremental Catalog = $4.00*0.50 = $2.00.
• Profit Factor = 40%.
• Cost of the Catalog = $0.90.
• Profit per Catalog = $2.00 * 0.40 - $0.90 = ($0.10) per book ... the catalog lost money.

At your agency, you feel pressure from your partners in the paper / printing / postage world to sell the fact that catalogs matter. Look at Nordstrom! Look at Amazon! Your co-workers are skeptical of the results, your industry partners are skeptical as well.

Tell me what you communicate to your client. You can email me your answer if you like (kevinh@minethatdata.com).

You can email me as well and I'll tell you what I'd communicate to everybody.

DID THEY SELL ANYTHING??

You want to talk about Thought Leaders and Lemonheads. Here you go.

41,000,000 views? Is that good?

Who the heck knows?

"We went behind the scenes ..." 

"... strategic thinking"

DID THEY SELL ANYTHING?

The most viral things I've done over the past twenty years ... I've had a million views of stuff I wrote on the blog, I've had hundreds of thousands of views on Twitter and LinkedIn ... do you know how much my business improved because of virality?

$0.

The most boring stuff I've written leads to business.

The most popular stuff I've written is meaningless.

Thought Leaders count clicks and views. Lemonheads marvel at metrics.

Practitioners count profit.

Simple Email Rules

When I model email buyer behavior, there are simple email rules that repeatedly appear.

1. If a customer clicks through an email campaign, the customer has a heightened chance of buying again in the next thirty-ish days.
2. If a customer clicks through two email campaigns per year, the customer is generally more responsive than average for the next year.
3. If a customer purchases after clicking through an email campaign, the customer is strongly signaling to you that the customer 

If you were to personalize email campaigns, just following these three simple rules gives you a ton of flexibility.

An Offer For You

I received a couple of emails from readers last week that were compelling. Both got me thinking about something. Here's a paraphrase of one of the email messages.

• "I saw what 'brand x' does for email marketing, and I'm disappointed in their entire marketing team. You mentioned that your team personalized email marketing messages at Nordstrom ... in 2001. Why isn't anybody executing at that level in 2026?"

Good question!

Let's try a limited test. I'll do something ridiculously inexpensive for you, because you are a loyal blog reader.

• I will score your email file using a headphones-style tier list ... S / A / B / C / D / F ... based on how likely each email subscriber is to buy from you in the near future.
• I will add a "+/-" indicator to tell you if the email subscriber is a good customer for your brand or a lousy customer.
• I will tell you the primary merchandise category and the secondary merchandise category the customer prefers so you can personalize the merchandise assortment for each customer.

You get two options.

1. $4,900 for a one-time run.
2. $7,900 and I'll score your file every month for the next twelve months.

You don't get the analysis I typically perform ... but you get the nuts and bolts necessary to personalize email campaigns to customers. When I've been asked to perform this work for clients, personalized campaigns perform about 20% better than batch-and-blast campaigns. If you are a $50,000,000 business generating $10,000,000 a year from email marketing, you could generate a couple million to the top-line and maybe a half-million to a million of incremental profit. For $4,900 / $7,900.

You have until the end of business on February 24 to take me up on this stupid-cheap offer. Fire away! (kevinh@minethatdata.com).

A Shift in Leadership

I've been floored by the change over the past fifteen years.

Early in my career (late 80s), I worked at a hybrid seed company. There were Leaders everywhere.

At Lands' End in the early 1990s, there were Leaders everywhere. Too many Leaders, in fact, causing rampant intellectual and philosophical arguments. You actually wanted to be in a meeting to hear the different points of view.

At Eddie Bauer in the late 1990s, there were fewer Leaders ... this was 90s Seattle, where Leaders and Grifters partnered to make millions in dot.com money, draining average companies of Leadership. I recall a really, really average manager calling me (I was a director at the time) offering me a job as a manager at Amazon, where I'd be a nobody but would earn more money. I wouldn't be writing to you today had I gone in that direction ... I'd either be dead or filthy rich. Being neither means I get to play pickleball.

At Nordstrom in the early-mid 2000s, there was a fabulous blend of Leaders and humble doers ... a kind of blend few companies could emulate. A competitive advantage that Neiman Marcus or Saks or Macy's could never possibly replicate.

And then?

Somewhere around 2010, "it" changed. It is Seth Godin's fault if you ask me. No, he didn't do anything wrong. He wrote so well. He spoke in public, and spoke well. He appeared on blogs, on podcasts. He commented on this very blog. He eschewed typical business models. He charted his own course. He's still writing (click here). He had ideas for how a modern business could relate to customers. His ideas were so simple that nobody, to this day, wants to implement them. Personalized communications? Why do that when you can mass broadcast a discount on Instagram ... the latter takes twelve seconds, the former requires a task force.

That's when "it" changed.

It is hard to come up with a thesis for how to run marketing at a modern business. You discount or you mass broadcast or you do all the hard work Seth Godin wanted you to do.

Virtually nobody in marketing wants to do hard work. Especially when understaffed, underappreciated, and under-paid ... which happens nearly everywhere.

The "it" that changed was the rise of the Thought Leader.

Few marketers could create their own thesis for how to execute marketing in a modern world.

Many marketers could point out missteps from "big brands". How hard is it to put Eddie Bauer on blast mode for bankrupting itself via merchandise strategy and store execution?

The Thought Leader uses seductive language to stop a marketer in his tracks.

• "Saks didn't adapt to a modern reality of retailing. The modern consumer has zero tolerance for uninspiring merchandise assortments in a dingy department store that fails to embrace experiences or engagement. Tomorrow's customer demands an intimate relationship with trusted brands. Those who haven't laid this foundation risk obsolescence. Those who are actively pursuing this foundation will reap the rewards."

That is the kind of acid-reflux inducing advice offered by a modern Thought Leader. If you don't tamp it down with Pepcid you become a Lemonhead.

The Thought Leader did not solve a single problem that Saks possesses. He simply said flowery words that sell books, that result in 79 comments from Lemonheads on LinkedIn, that allow him to pay $20,000 to speak at conferences, that enable him to sign a contract to provide "Management Advice" at a competing brand that will never be implemented. He pays to write for Forbes. He criticizes everybody in an attractive manner. He uses terms he lacks the ability to understand or implement ("AI" comes to mind). He is the opposite of Seth Godin in every possible way.

These very traits are attractive to the Lemonhead. The Lemonhead is understaffed, underappreciated, and under-paid. 

The Lemonhead lacks Leaders within his own company. With nobody to lead him, to guide him, to protect him, he's at the mercy of the Thought Leader. The Thought Leader gladly adds his subscriber counts, clicks, and otherwise empty engagement metrics to his collection. The Thought Leader needs the Lemonhead. 

The Lemonhead needs somebody to respect him, to appreciate him.

Which brings me back to you.

Be a Leader.

Your employees need you. They're counting on you. You might not be able to pay them enough. You might not be able to provide them with the resources they need to be successful. You might not be able to staff your department appropriately. But you can respect your employees and appreciate your employees. Daily.

Your employees do not want to become Lemonheads. They need a real Leader to help them navigate five miles of marketing dreck coated in delicious frosting.

No Awareness

Modern prospecting and awareness are intertwined.

I decided to look at a brand called Potpourri. I visited the website, and was promptly interrupted.

Why did I visit the website? I wanted to find links to their social media presence.

There were no links.

As best I can tell, there's not much of a social media presence. Maybe I am missing it.

Honestly, Potpourri is part of a conglomerate, so they can prospect off of sister company lists. That helps ... a lot!! 

Long-term, your organic social presence promotes events ... the events convert prospects into shoppers that become buyers that can be nudged toward loyalty yielding profit.

I mean, it's 2026. The best time to start the organic social stuff was in 2010. The second best time to start is tomorrow. But you have to have something to say. Create an event every three weeks, events that fuel the prospecting part of your universe, that seed the search/ai aspect of your business.

Every Three Weeks

Back to our playbook.

Every three weeks there needs to be an event. Again, not "40% OFF PLUS FREE SHIPPING", that's not an event, that's a bribe that devalues the customer relationship.

Events are important, because they fill your marketing ecosystem ... the kids call this stuff content and engagement ... it's so much more than that. You are giving the customer a reason to pay attention to you, and better you do that with merchandise that leads to content than to do it with content alone.

All this stuff helps you retain customers ... and based on your feedback, you much prefer retaining customers than acquiring customers (though most of you benefit more by acquiring customers than retaining customers).

The Playbook: A Missing Element

Here's our playbook.

You, of course, are a play caller. You make decisions. You have a playbook with all sorts of "plays".

Those of you in old-school cataloging ask a common question.

• "If we didn't have a catalog, we wouldn't have anything to say. How do we close that gap?"

Yeah, there's a missing element for those folks ... an element that (some) ecommerce brands possess.

The missing element?

Events.

You just watched the Super Bowl a few days ago. That, ladies and gentlemen, is an "event". The entire football calendar is built around events.

Events can be sales, but they should be more than sales. Customers don't care about your MARCH SALE - HURRY, 50% OFF PLUS FREE SHIPPING when the customer knows that a month later there will be an APRIL SALE - HURRY, 50% OFF PLUS FREE SHIPPING. Those are events by definition only.

The old-school cataloger essentially had monthly events ... a catalog delivered to a mailbox. Take the catalog away and there is a void.

The void must be filled ... with events.

Here's Olive and Cocoa (click here). That's a business based on events ... they don't have to create events because the entire business model is based on events.

You remember Amazon? Prime Days? Yes, there is a price component to that ... but not all prices are cut, and it isn't a sale with a blanket 30% off everything.

Williams Sonoma has virtual events (click here) to complement in-store events. How hard is it to create virtual events?

The catalog is going to go away (for my catalog-centric readers) - your partners are going to increase costs to unmanageable levels ... it has already happened and will continue to happen. You will replace catalogs with events. You have no choice.

The Playbook

A rudimentary drawing of what you are dealing with.

Print the image.

Review all of the "connectors" in the image ... this isn't perfect information so I'm not looking for an email that says "you don't have display ads in here, so the whole framework collapses" ... this is designed to get you to think, not criticize.

Prospects align with the channels below them.

Shoppers align with the channels below them.

Buyers / Loyalists frequently align with the channels west/southwest of them.

We're trying to push prospects to loyalists, right?

The Play Caller

That's what you are. You are a playcaller. Your job is to call plays to score points (i.e. profit) for your company. It isn't necessarily an easy job.

Readers ask "what do you look to for inspiration?" ... well, it sure isn't marketing literature ... six miles of unimaginable dreck coated in sugary frosting".

One of my daily reads is called "One Play A Day" ... you can subscribe here if you are a football fan. The coach sends one play design per day, showing how a play caller baffles the defense.

You just watched the Super Bowl. Did the play caller run the same play over and over and over and over? No! The play caller mixes things up, deceives the defense, runs a play in the first quarter then runs a completely different play out of the same formation in the third quarter.

The play caller adjusts to the strengths of his/her team.

The play caller uses analytics ... sometimes agreeing with analytics, sometimes disagreeing, sometimes simply leveraging gut feel and instinct.

The play caller knows that yards (net sales) are kind of irrelevant ... the play caller knows that points (profit) are highly relevant. The play caller knows that chunk plays (rushes of 12+ yards or passes of 16+ yards) make a big difference ... they are like events in marketing.

The play caller adjusts when his players aren't capable of performing at a high level ... no different than the marketer adjusting when customers don't embrace merchandise. Players in football are comparable to individual items in a merchandise assortment. Everything needs to work in harmony.

In upcoming posts, we're going to talk about retention and acquisition in terms of a play caller. You are no different than an NFL or College play caller. Which means, of course, that you have an important job that requires creativity, imagination, flexibility, and raw skills/knowledge.

P.S.: You can't always trust AI to produce an accurate image ... look at the flaws in this one.

Two Tidbits for Friday

You are going to have to have a handful of key items that you build your customer acquisition strategy around. It's virtually non-negotiable in a world that is transitioning search from Google-centric algorithms to discovery via AI.

We briefly veer off-topic for a moment. Here is a comment from former football coach Mike Martz ... about going for it on 4th down and the relation of the tactic to "analytics" in football.

"When somebody says 'analytics' on TV, I just run to the bathroom to vomit".

Do you think I'd align with a pure analytics view, or would I have empathy for this comment?

I have empathy for this comment.

There's a newsletter I receive from an agency. It's pure analytics wonkery. "For our clients, sales were up 2.49% on an ad expense increase of 4.11% leading to a ROAS of 2.88, proving that Facebook is struggling to deliver new customers."

Anytime you make decisions based on somebody else's success or failure, you are sub-optimizing the very decision you seek to optimize. If somebody told you that diners enjoyed eating meatballs just 41% of the time, would that dissuade you from making meatballs? Or would diners enjoy your meatballs 89% of the time?

Business should be FUN ... and you have the knowledge to make your own decisions independent of data. You know what works for your industry, you know what works for your own customers (often the tactics are different), and you make decisions independent of the industry narrative. That's the best use of analytics.

Small Details

In pickleball, if you score on 47% of your serves instead of 44% of your serves, your probability of winning a game goes from 50% to 64%. Small details matter, they're the difference between being successful or average.

The same thing happens in your business. Especially in email marketing. Back in the stone ages (2001 - 2007) at Nordstrom we personalized the merchandise that each customer observed in an email message. You're not doing this today, and that says something.

Why did we do this?

Email might have accounted for 15% of ecommerce sales, annually, maybe $45,000,000 per year. By personalizing the merchandise the customer observed, the $45,000,000 number became $54,000,000 ... the additional $9,000,000 of ecommerce sales resulted in about $2,600,000 in additional profit. All for the cost of about $150,000 in salary/benefits.

Sounds like a good tradeoff, doesn't it?

It's 2026 ... almost none of you reach out to me and tell me you do anything more clever than an old-fashioned "batch-and-blast" tactic. Easy? Yes. Profitable? Yes! Leaving all sorts of profit laying on the ground, unable to be picked up? Yup. By skipping the small details, you harm the business you work for.

Let's assume you are a $50,000,000 ecommerce brand. Email accounts for 20% of sales (if it doesn't account for at least 20% of sales, you are failing as a retention marketer). Let's assume you aren't doing any merchandise personalization, thereby missing out on a 20% sales opportunity. Let's assume that 40% of gross demand flows-through to profit. What are you missing out on?

• $50,000,000 * 0.20 = $10,000,000 as your email marketing base.
• Personalization = 0.20 * $10,000,000 = $2,000,000 additional gross sales.
• Profit?  $2,000,000 * 0.40 = $800,000.

If your business is wildly profitable, you likely generate 10% EBIT ... $50,000,000 * 0.10 = $5,000,000 profit. Would you like profit to increase by 16% (from $5,000,000 to $5,800,000)?

Hint - your CFO wants you to do this.

If your business has tepid ... just $2,500,000 ... the increase of $800,000 is more than a 30% increase in corporate profit ... from just paying attention to a small detail.

Those small details also translate to your personalized website, which you have ... right?

Lands' End in the early 90s was the only company I ever worked for that cared deeply about small details. I recall our Circulation Director sending her Circulation Managers back to the drawing board if gross margins were projected to increase by 0.2% ... they had to spend a week re-working an entire spring/summer season to account for the fact that we were every-so-marginally more profitable.

Small Details = Big Profit Swings.

Questions About Retaining Customers

If I asked you the following specific questions, would you be able to provide answers?

1. What specific tactics do you employ to quickly convert a customer from a first purchase to a second purchase?
2. What specific tactics do you employ to convert a customer who is 11/12 months after a prior purchase?
3. What specific tactics do you employ for the top 5% of your twelve-month buyer file?
4. What specific tactics do you employ for customers with 13+ months of recency to bring the customers back into the fold?
5. When a customer visits your website but does not put anything in a shopping cart, do you apply any different marketing tactics via email marketing or sms to treat the customer as an (albeit briefly) highly responsive customer?

Give yourself 20 points for each question above that you could answer with at least one specific tactic.

For each question you offered at least one specific tactic, subtract 8 points if the tactic includes a discount/promotion.

For each question you offered at least one specific tactic, subtract 4 points if the tactic is generic and applies to all customers.

Total Possible Score = 100.

To put your efforts into a headphone tier list, here is how it would break down.

• S-Tier = 100 Points.
• A-Tier = 60 - 99 Points.
• B-Tier = 45 - 59 Points.
• C-Tier = 30 - 44 Points.
• D-Tier = 15 - 29 Points.
• F-Tier = 0 - 14 Points.

If you are D-Tier or F-Tier, you likely have a customer retention issue within your marketing department.

You can kind of see where I'm heading with my retention discussions, can't you?

Nobody Expected This

Story time!

I've told this story before, but it is relevant here in 2026. It's 1998 at Eddie Bauer. Our stores were not performing well, our online/catalog business was abysmal. I was just promoted to Director of Circulation/Analytics. Within twenty-four months our Catalog Team of Executives would fix the catalog/online business, recording the most profitable year in the history of the division.

Retail was a different story.

Our bigger stores had something called a "Sport Shop", an homage to the outdoor heritage of the brand (today the casual part of the business, at least 80% of sales back then, is completely gone). If you looked at ordinary store sales reports by category, Sport Shop had a ton of square footage and a minimal amount of net sales. It was unprofitable.

Management decided to kill it. The current generation of LinkedIn experts would chime in with the #datadriven hashtag. Good idea! "The brand has a sales dashboard and the KPIs suggested this category is simply not needed - this is the very essence of letting data guide your decisions."

Six months after the category was killed ... square footage replaced by our late 90s mens/womens casual assortment, a funny thing happened.

• Existing Stores, No Prior Sport Shop.
• Mens Comps:  +2%.
• Womens Comps:  +2%.
• Existing Stores, Prior Sport Shop.
• Mens Comps:  -2%.
• Womens Comps:  -6%.

Tell me what you think happened?

Our Marketing Research team asked customers what happened. Here's what they learned.

• "When you took the Sport Shop away, you took away a shopping experience for my husband and I. He'd tinker in the Sport Shop for a half-hour while I bought clothes. Without the Sport Shop, my husband didn't want to waste a half-hour watching me shop."

Ooof.

Turns out the Sport Shop was wildly profitable but was measured incorrectly. We needed to measure the "spillover value" the category had. It attracted a browser (measured as $0) and it attracted a shopper (measured as $100 but attributed to Women's Casual).

Does this happen in your business?

Oh my Lord, does it ever happen!!

It happens every day on Instagram. That's where your browsers are ... no, not website browsers, actual browsers, people with no intention of shopping. It happens on YouTube when somebody is watching the video of one of your buyers traveling to Hawaii to meet with widget suppliers. It happens when somebody subscribes to the Substack of your Chief Merchandising Officer. I mean, all sorts of people have interesting Substacks that you wouldn't expect.

What is the category or marketing activity that bring in "browsers" who ultimately generate sales ... one way or another ... in a category that maybe doesn't deserve credit for the order?

BONUS STORY:  You probably read this little ditty yesterday. Ten years ago I fielded a phone call from an Agency Leader. At the time I was consulting with a large retail brand that mailed catalogs. The end of the conversation went like this.

• Agency Leader:  Management told me you told them to stop mailing catalogs to store buyers because holdout tests proved that catalogs had minimal value.
• Kevin:  Correct.
• Agency Leader:  God you are so stupid. Everybody knows that catalogs drive customers into stores.
• Kevin:  Mail / Holdout tests proved they didn't drive customers into stores.
• Agency Leader:  Well, I am calling to tell you that we are now the agency of record, and we are reinstating catalogs to store customers on day one.
• Kevin:  Ok.
• Agency Leader:  I am also communicating that the brand no longer is in need of your services. Is that clear?
• Kevin:  Yes.
• Agency Leader:  You know better. Goodbye.

The retail brand ultimately went bankrupt. Guess all those catalogs were, at minimum, unhelpful.

I distinctly remember the "God you are so stupid" comment. The arrogance and attitude of this individual ... the suggestion that all you had to do was override science (mail / holdout tests) with faith in paper. If the results of the test proved catalogs should be mailed, I'd have recommended more catalogs. Instead this brand drained cash reserves sending mindless / useless paper to force a customer who didn't want to go to the store to go to the store, siphoning off cash for the Agency, for Paper Reps, for Printers, and for the USPS in the process. 

Always do what is right for your client.

Paper, Printing, Postage: Eating Your Business One Bite At A Time

Here's the story that repeats, not one talked about by the experts on LinkedIn. The table on the left shows the optimal strategy for a customer segment three years ago ... the middle table shows it today ... the table on the right shows the optimal strategy three years from now if the expense structure continues to add challenges to the p&l.

Three years ago the optimal strategy for this customer was 9 mailings per year, generating $28.46 demand and $6.51 profit.

Today, the increases in paper / printing / postage require you to mail the customer 6 times per year, generating $23.24 demand and $5.06 profit. Demand is down 18%, profit is down 22% ... all because of the added expenses passed on to your business. You'll continue to mail 9 times per year, generating $28.46 demand and $4.71 profit ... less profitable but the majority of catalogers that remain just don't want to change.

If costs continue to increase similarly, you're down to mailing the customer 4 times per year, generating $18.97 demand and $4.14 profit. Most remaining catalogers don't want to change, so they'll mail 9 times per year, generating $28.46 demand and just $2.91 profit.

Either way, paper / printing / postage are eating your business one bite at a time. You get to decide if you want to optimize profit.

• Non-Optimized Profit (the route most of you will take because you don't want to change).
• $6.51 three years ago.
• $4.71 today.
• $2.91 in three years.
• Optimized Profit (my smart clients have been doing this for YEARS).
• $6.51 three years ago.
• $5.06 today.
• $4.14 in three years.

Again - show me where the paper, printing, and postage gurus are sharing this dynamic with you? They're not. They're running this aspect of your business into the ground. Until you stand up to them (i.e. shift your dollars out of print and into other marketing tactics until they provide you with cost relief), they'll continue slowly (then all at once) ending this discipline for you.