Direct marketing lessons from someone who built a $100+ million business

Here’s a thought experiment for you:

You’ve got an online business. You’ve got a growing list of email subscribers. Think about what you’d do differently if you had to pay $1.37 per subscriber every time you sent an email.

Would you still send as many? Would you still try random subject line tests? How many times would you double- and triple-check to make sure all the links work?

Email marketing would be a totally different ballgame. Everything you sent out better have a good shot at success or you’d be out of money. Those kind of stakes force you to develop discipline, fast.

Today, I’d like to introduce you to someone who built his career under those conditions.

Brian Kurtz is one of the most respected direct marketing consultants today. As the former list manager and executive vice president of Boardroom Inc./Bottom Line, he was responsible for sending out 1.3 billion pieces of direct mail. And in the process, he built a list of 9 million customers and a $100+ million-dollar business.

Having cut his teeth at a time when you had to pay to get your message heard, his attitude toward marketing is very different than those who grew up on the internet.

I sat down with him for a talk where he shared insights on direct marketing, business building, and product creation.

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Joe: For those who aren’t familiar, what is direct marketing?

Brian: The only form of marketing I’m interested in is direct marketing. Everything you do needs to be measurable. It doesn’t matter whether you’re running something on Facebook or in the newspaper. If you’re paying for it, the return has to be measurable. Anything else is a waste of time and money.

You want to find out how good you really are? You’ll find out really quickly with direct marketing.

The principles of measuring response on marketing goes back decades. I’m working on a book right now, with my friend Craig Simpson. It’s called The Advertising Solution.

We discuss 6 pioneers: Claude Hopkins, Robert Collier, John Caples, David Ogilvy, Gary Halbert, and Gene Schwartz.

These were guys doing Mad Men-style advertising. But at the same time, they were thinking like direct marketers before anyone knew what that was.

They wanted their advertising to be measurable. That’s something all of us can learn.

Joe: With print and direct mail, you had to pay tens of thousands of dollars just to test your message on 50,000 names. Do you find your attitude toward marketing is different than people who grew up online, where everything is “free” and “cheap”?

Brian: I’m not saying that direct mail or print is better. But having grown up in that world, I can say this: When we went out with a message, we had to be so sure that it would work or that it was worth testing.

The discipline we had doing that transferred to how I work online. People don’t have that today.

The internet makes people lazy. Since it’s cheap, marketers make an ebook, write a sales page, and drive traffic to it. And it makes money. That’s okay.

But I’ll maintain that if they spent more time upfront working on the messaging to their list, people would see exponentially better results.

Joe: So they’re leaving money on the table? How do you figure?

Brian: We have a quick rule of thumb that determines the success of a campaign. It’s called the 40/40/20 rule. It says:

  • 40 percent of success is determined by the list – Are you targeting the right people?
  • The next 40 percent is in the offer – Are the price and terms right?
  • The final 20 lies in the creative – How good is the messaging in your sales letter?

The list is paramount. You must find your right customers with the right offer. Otherwise you have no chance at anyone buying.

Most online marketers who are small send one message to their entire list and assume that’s good enough.

But “one size fits all” messaging is a huge mistake.

Segmenting is everything. It’s important to find out who is on your list. And what’s the best offer you can make.

For example, and this is simplistic, let’s say you have a list.

  • 10% are customers who have paid you $1,000 for a product
  • 50% are people who have bought something for $50
  • And 40% haven’t bought anything but they’re engaged and opening emails

Why not have 3 different messages for those 3 groups?

So for the people who spent $1,000, you can set up personal phone calls with them. You can invest more in that customer relationship. Someone who paid that much money is willing to pay $2,000 for a better or more intimate product.

Whereas the $50 group needs a different message to move into a higher-priced product.

Lastly, the engaged segment are people you’re still dating. You need to romance them more. The messaging and offer would be different than the first two groups.

When we had databases of millions of names, we were segmenting like this all the time. Different groups of customers received different messages and offers.

So that takes care of the 40/40 part.

Now, creative only counts for 20 percent of your success. You can look at that and think the creative doesn’t matter. That’s not true.

Not spending enough time on creative and messaging is a huge mistake that a lot of online marketers make today.

It’s almost an afterthought. That’s because you can put almost anything up there and it makes some money. Why get a copywriter when you can do just fine without?

The best online entrepreneurs know their product and audience really well. They’re launching from the heart so they become their own best copywriters. These are the people who do very well on their own.

I’ve worked with some of the greatest copywriters who have ever lived. People like Jim Rutz, Gary Bencivenga, and Gene Schwartz. We’ve paid them small fortunes. When I had world-class copy, that’s when the company exploded. That’s when I was able to get 50% lift in response.

Not shortcutting anything — the list, offer, and creative — is the best path to success. Understand 40/40/20, but talk to segments of your list based on how they’ve behaved in the past.

Joe: What is the advantage of the internet then?

Brian: Just because you have a list doesn’t mean you sell them something every time.

Create a blog or regular email newsletter that has nothing to do with selling anything. Make it all about developing a relationship.

For example, I do a lot of interviews and podcasts. When people join my list, they get a weekly blog post about my lessons in direct marketing.

But once in a while I’ll offer them something. Like when my book comes out, I’ll tell them to go to Amazon and buy it.

If they buy it, great. If not, they’ll still get a blog post the following week with more stuff that they’ll find valuable.

Ramit has an amazing relationship with his list. That doesn’t happen by magic. That only happens when you care about the relationship.

Your list is a group of people who like you, and you want to preserve that. After you have that relationship, you can ask about new product ideas.

Joe: Speaking of new products, many of our students have one product and they’re doing quite well with it. What’s the next step for people like that?

Brian: Your best customers will tell you what they want. There’s hardly any guesswork. You can use all kinds of surveys to help.

Once I sent an email telling a story about one of my mentors. Then I asked my list, “I’m thinking about doing a course on this thing my mentor taught me. And also these other ones. Tell me what you think.”

You’ll find they’re going to be very happy to email you their thoughts. I got a lot of replies and it gave me some good ideas.

Another thing you can do is something called a concept test. It’s simple, but it’s never produced a failed product for us in 25 years.

A concept test is where you send people potential product ideas along with a short blurb about each.

Then you give them two answer choices:

  1. Would buy
  2. Would not buy

You’ll get a pretty good sense of what to launch next.

This is a simple technique. There are many more advanced ones. My friend, Ryan Levesque, has a book called Ask. In it, he goes over more sophisticated survey funnels. In short, you get people to answer questions about possible products, and then they get funneled into buckets. Then you promote to each bucket separately.

This is similar to what I described before, where you have different messages for different people on your list. Ryan’s ask funnels are based on the same theory.

Now, it is absolutely true that someone answering “would buy/would not buy” versus putting down their credit card are completely different behaviors.

But if you build a good relationship, people will tell the truth because they like you. That’s the key.

You weed out a lot of bad ideas this way.

When you start selling stuff that’s really good and applicable, they’re going to buy a lot. You’re going to feel really good about selling it to them. They’re going to feel good about buying because they trust you.

It’s a great system and the real advantage of marketing in the online world.

Joe: Once you have a few products, how do you promote each one using the 40/40/20 rule that you explained earlier?

Brian: We have an expression in direct marketing: “The control is your enemy.”

The control is the promotion that’s working best. It’s the winner. The day we get one, is the day we try to beat it. You never want to rest on your laurels.

That’s a mistake I see today. You see a ClickBank product and it’s making good money. The promotion is good, but that thing is going to phase out. Then what are you going to do? Write another promotion to beat that? Well, that’s a good first step, but very reactive.

If someone launches a product and isn’t thinking about what the next product they can offer is, they’re never going to have a business that can scale, one that self-manages with a lot of continuity income.

According to Bob Stone, who wrote Successful Direct Marketing Methods, “No direct marketing business can survive without repeat business.”

Which is why I say, “A product is not a business. A promotion is not a business. And selling more to more people is not a business.”

Ask yourself:

  • What’s the upsell?
  • What’s the cross-sell?
  • What’s an off-shoot product?

For example, if you have a fish oil supplement, you’re not just in the fish oil business. People might want vitamin D, or a multivitamin.

What if you have men and women buyers? If they all bought a multivitamin, can you offer a prostate supplement to those men only? Can you offer something to women only?

This is a simple example, but it goes back to the list not being a homogeneous thing.

If you have a list and a product that people bought, you’re off to a great start. You can’t build a list and sell a product without doing a lot of things right first.

But to be a true business, you must have multiple products and promotions. You have to think ahead. This is where having concept testing and a good relationship with your customers will come in handy.

These are tools direct marketers have used for decades, and they can help online entrepreneurs today.

Joe: Thank you, Brian, for taking the time out to talk about direct marketing.

* * *

If you’re interested in more “old school” marketing lessons, check out I love his stories on what it was like to work with certain “characters” over the years. You don’t even need to know who they are — it’s still entertaining, and you’ll learn a ton.

I also like how he talks about things like building copywriting teams, customer service, and sending thank you cards — the little things nobody else talks about that can have a big impact on your business and life.

So definitely check that out. And in the comments, let me know: What was your biggest takeaway from this Q&A? How will you use it in your business going forward?

There Are 4 Comments

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Wow! look at the emphasis on the client-relationship! Breaking your entire list into 3 segments seems like a lot of work, but it has obviously paid huge dividends. Look at Brian’s results!

I’ve also been on Ramit’s list for a while, and in the mean time unsubscribed to TONS of other marketing guru’s emails. Why? it’s totally in the relationship. I write emails – questions, comments, etc. – to Ramit and get replies from him all the time.

Love it!

Great conversation! When every communication you sent cost money — you learned fast how to measure and test, test, test. Having grown up in direct marketing pre-internet, I truly appreciate how much easier it is for someone to realize their dream and create a profitable business. But the disciplines Brian talks about really make a difference – not just in profitability but in the quality of the relationships you develop with your clients. To me, it is this opportunity that so very extraordinary compared to when we dreamed about what a true one-to-one customer relationship could be like.

Arkamitra Roy

I think it’s a brilliant post, peppered with nuggets of oh-so-obvious but why-didn’t-I-think-of-that, information. Thank you so much for this interview. I especially love the idea of sending out different mails to different tier clients, for the best, most effective results.

Further exemplifies why I am such a fan of everything you guys do here at growth lab: the focus is on the customer and on the relationship. I agree that a non focus on this is the reason most people fail!

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