May Your Customers Love Your Brand As Much ...

... as these customers love REI.

How would you measure if your customers "love" you?

If your customers love you but not enough to cover your rent, does brand "love" matter?

If your customers shop your gas station twice a month and a different gas station twice a month, does brand "love" matter if 24 transactions a year net you a ton of profit?

In a project a few years ago, the Executive went off about the fact that I defined a "Loyal Buyer" as one who has at least one twelve-month purchase and at least five life-to-date orders. "You don't know what Loyal is, and you shouldn't go around telling us how to define it. Our customers love us!!"

A tiny piece of your soul just kind of goes into hiding on those pithy arguments that some people like to have. We shouldn't take the definition of "loyal" too seriously, and we shouldn't strive for our customers to "love" us. Instead, we should take care of customers and we should realize the point where our customers generate self-sustaining profit.

New Project: My Top 12!

A podcaster asked what my most popular projects are? 

Interestingly, a look back at the work I've performed over the past three years showed a series of individual analytics within projects that clients consistently responded positively to. There were close to a dozen individual "pieces" of projects that professionals enjoyed.

Which got me thinking ...

... what if I combined the most popular stuff y'all respond to, and create one project out of all of it?

Let's do that!!

My Top 12:

• My Elite Program Analytics that I run for Elite Program Subscribers 3x/year.
• Life Table Analysis that shows the path your customers follow from a first purchase to loyal status.
• Life Cycle Analysis - illustrating what your first-time buyers purchase vs. what average / loyal customers evolve into from a merch/channel standpoint.
• Class-Of Reporting (most popular), demonstrating potential missteps in your merchandise assortment strategy over time. This analysis consistently provides the most discussion in my video conferences.
• Primary / Secondary Merchandise Categories - I'll explain the categories that run your customer ecosystem. Each brand has 1-2 categories that either attract new customers or become that "gravity" that ties your loyal customers to your business. I cannot score all customers as normal within the scope of this project, but you'll understand what drives your business.
• Price Point Analysis - I will measure the impact that higher prices have on repurchase metrics and/or spend per repurchaser. Very relevant in the post-COVID / Tariff environment we operate in.
• New Customer Quality Analysis Over Time - Many ecommerce businesses went down the Paid Social rat hole and were left with a weakened customer file comprised of unresponsive customers. We'll figure out if that happened to your brand.
• 12 Month Future Spend For New Buyers by Channel/Season/Category - You won't get the scoring equations (that costs $$$) but you will learn which channels, which seasons, and which categories contribute to quality new customers.
• Reactivation Potential - I will describe whether your business should "lean into" customer reactivation as a meaningful growth opportunity. You won't receive the scoring models my clients usually receive, but you'll understand if you have customers willing to be reactivated.
• Five Year Demand Forecast (2nd most popular) - I will show you where your business is headed based on a segmentation of customers and prior repurchase activity.
• Multi-Year Marketing Budget Study - This high level analysis evaluates marketing spend by channel for the past three years, comparing your brand to a typical client. Are you over-spending, under-spending, or have what I'd call an "imbalanced spend" by channel?
• Mystery Analysis - Based on customer behavior, I will add one (1) analysis to the eleven outlined above. If you have merchandise problems, I'll draw into my Categories analysis. If you have loyalty problems, I'll dive into the Life Cycle analysis (etc).

Ok, that's a lot!

How much does this cost?

• Pick Any Two Aspects Of The Project = $5,000.
• Blog Subscribers and Clients:  $12,000 through August 15.
• $19,000 For Everybody Else - $19,500 after August 15.
• $34,000 For A Deep Dive Within Each Of The Analyses.

I mean, for $12,000 you're getting an awful lot, aren't you?

I'll also include a one-page summary that outlines what I learned ... beyond the normal writeup/analysis.

You've got a little over two weeks to act, to get in the analysis queue. Contact me right now (kevinh@minethatdata.com) to reserve your spot. Click here for file layouts.

P.S.:  If you are rebuilding your business, you'll need this analysis to point you in the right direction.

Times Change

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

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

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.

1. Marketing is required to generate sales. Less marketing, less sales.
2. 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

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

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

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

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

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

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

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

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?

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

I looked at the data.

1. Prospecting Response Down Significantly Post-COVID.
2. Ad-Costs Up 25% In The Past Three Years.
3. Huge Circulation Cuts Among Lapsed Buyers and Prospects.
4. 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?

1. Huge Brands.
2. Big Budgets.
3. 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

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"

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

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

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!

America turns 250 in a few hours!

Enjoy the long weekend!