Dennis Kelly is the Chief Executive Officer of Postalytics, a fast-growing software company that automates direct mail marketing, measures the results and connects it to CRM/Marketing Automation. Dennis specializes in technology, product development, sales, marketing, finance and HR. In this episode, he will give us a sneak peek into how he’s grown his business and offer us some tips to be successful in the ecommerce industry.
Learn from Dennis how to get more reviews and customers for your business!
[00:01 – 04:31] Opening Segment
- Let’s get to know Dennis Kelly
- How Postalytics turned into a fast-growing company
[04:32 – 14:44] The Best Time Be An Entrepreneur
- Dennis talks about his fears when he decided to pursue entrepreneurship
- Here’s how he overcame all of them
- Why Dennis thinks that entrepreneurs should start young
- Some sacrifices will also be made
- What aspiring entrepreneurs should realize about fears
[14:45 – 24:16] Why Dennis Invested in a Declining Business
- Dennis tells us this story about selling a company
- The importance of digital calendars according to Dennis
- He explains how direct mail was the predecessor of ecommerce
[24:17 – 34:17] Generating Leads From Postalytics
- How entrepreneurs can leverage Postalytics for lead generation
- Want some Amazon refunds? Check out Getida
- Promo code: FTM400
- Here’s a sneak peek on the backend of Postalytics
[34:18 – 47:42] How to Generate More Sales
- How to get customers to bite your upsell and cross-sell offers
- Increase your conversion rates by following these tips from Dennis
- Product launches can also benefit from direct mails and here’s how
- How much should you allocate for direct mail?
[47:43 – 51:41] Closing Segment
- Know more about Dennis in the Fire Round
- Connect with Dennis!
- Links below
- Final words
“As a startup person, I think you always have fears and you have to become comfortable with them. They’re a part of you. They’re not something you can just ignore.” – Dennis Kelly
“You have to have a feeling that you can succeed no matter what as long as you work hard enough.” – Dennis Kelly
Send us a voice message and let us know how we can help you fire the man!
Email us –> firstname.lastname@example.org
Are you looking to grow your sales on Amazon? Chances are if you’re not selling on Amazon’s international marketplaces, you are leaving some serious money on the table. What keeps a lot of people from selling internationally are all the confusing hoops you have to jump through to get started. That is why we worked with Kevin Sanderson from maximizing e Commerce on our international expansion. Kevin and his team take care of the details and guide you through the process of expanding so that you can grow your sales and reach new customers. If you would like to find out if working with Kevin and his team is right for you head over to www.maximizingecommerce.com/fire FIRE, once again, that is www.maximizingecommerce.com/fire.
Dennis Kelly 0:46
And, you know, I’d had some experiences as an athlete, and as a young person, you know, just doing a lot of hard work, where I guess maybe I’d built up enough resilience and confidence to overcome those fears. And then regarding the income, you know, I was talking to my father about it, and he said, Listen, if you’re going to do something like this, do it now. Do it before you have kids, do it before you have a mortgage, you can always go back and get a job in corporate America. The people that were using electronic calendars at that time were, they were on their local PC, right or on their handheld on their palm, they would use the calendar. And so things like Microsoft Outlook, and Lotus Notes and things like that, that were PC based, had their own calendar systems. So, we would do a synchronization between your Outlook calendar and your any day calendar so that, you know your family could log in and see what you’re doing. Right. Or you could send invitations from any day to multiple business people and connect them all because you couldn’t really do that with Outlook or with Palm.
Welcome everyone to the firing the man podcast a show for anyone who wants to be their own boss. If you sit in a cubicle every day and know you were capable of more then join us. This show will help you build a business and grow your passive income streams in just a few short hours per day. And now your hosts, serial entrepreneurs David Schomer and Ken Wilson.
Welcome everyone to the firing the man podcast on today’s episode, we have the pleasure of interviewing Dennis Kelly. Dennis is the CEO of postalytics, a fast growing software company that automates direct mail marketing, measures the results and connects it to CRM, and marketing automation. Dennis specializes in technology, product development, sales, marketing, finance, and HR. Welcome to the show, Dennis.
Dennis Kelly 2:52
Thank you, David, Ken, very nice to meet you both. And I’m excited to speak to your audience.
Yeah, absolutely. So first things first, tell us a little bit about yourself and your path in the E commerce world.
Dennis Kelly 3:02
Sure, sure. So I’ve been involved in technology startups here in the Boston area for the last 30 years. I was very, very fortunate to have the opportunity to leave a huge corporation and join a startup. And it’s kind of kept me very engaged ever since. And I’ve been involved in primarily software businesses that support different types of business models. And so one of my startups, though, is actually a retail organization where we began to sell using E commerce platform. And now with postalytics, we actually have a number of E commerce companies that are our customers that use postalytics to help them market and sell to their own clients. And, you know, in some ways, we’ve sort of taken an E commerce approach to attacking a very old and traditional marketing channel. And so postalytics takes direct mail marketing, and really turns it into much more of a digital experience and enables marketers to create an account for free, log on, generate campaigns, put in a credit card, pay for what they use, never have to talk to a human just the same way you would with an E commerce platform. And so lots of familiarity with the market. And like I said, we have a number of clients that have been successful using postalytics.
That’s awesome. So Dennis, you mentioned you’ve kind of been in the startup industry for about three decades. That’s a long time. That’s pretty cool. You know, if we could turn back time, and you’d mentioned you went from corporate to startup, so can you go over a couple of the fears that you had of like, Oh, I’m gonna leave this safe environment and then go and try to grind it out and you know, as an entrepreneur in the startup world, can you share a little bit of those fears and what you did to kind of overcome those?
Dennis Kelly 4:56
Sure, yeah. So as a young guy prior to entering the corporate world, I was always, I guess, entrepreneurial. And, you know, I was always working and had as many odd jobs as I could. I washed cars, I mowed lawns, I cut wood, I, you know, I did a lot of knocking on doors as a kid and just offering to help people do stuff at their house and get paid for it. And so I think it was a little bit instinctual for me, and encouraged by my parents as a kid. And then, you know, when I got out of college, I moved into New York, and worked for a huge company, and really had a great experience. They’re tremendous people, I got great training, you know, they really invested heavily in sales training. And then, it was a six month training program, then put me out in the field, partnered up with a senior rep, mentored me as a young salesperson and, you know, I really learned a tremendous amount, but I felt like I was, you know, I didn’t really have control of my own destiny, and I felt an urge to, you know, get involved in something that was way earlier stage and to, you know, have a much more direct impact on my own success. And so, you know, what was tough, was, as a young salesperson who’s doing well, you know, you can make some pretty good money with commissions. And so, you know, I felt like I was living pretty well. And I joined a startup that was founded by a college friend of mine and his brother, and I took a 50% pay cut, and joined the company, and where the three of us really didn’t know what we were doing. You know, it was all, you know, first time starting a business for all of us. So there were a lot of fears that I had, you know, about whether or not I made the right decision whether I was too young, right and too inexperienced to just go off on my own, that was really one set of concerns, and, you know, those were articulated to me by people that I would talk to about it, you know. Then the other set was really, you know, walking away from a pretty clear path to making good money to a very, very unclear path. And so, you know, I think for the first one, you know, regarding my age, it really boiled down to whether or not I could have enough confidence to just feel that if I just worked hard enough, I’d be able to get through anything. And you know, I’d had some experiences as an athlete, and as a young person, you know, just doing a lot of hard work, where I guess maybe I’d built up enough resilience and confidence to overcome those fears. And then regarding the income, you know, I was talking to my father about it and he said, Listen, if you’re going to do something like this, do it now. Do it before you have kids, do it before you have a mortgage, you can always go back and get a job in corporate America. He said but you know, you might not ever have an opportunity like this to jump in at the very beginning of a company with some people you know, and you trust. And he said, you know, if it doesn’t work, it doesn’t work. It’s not the end of the world. And, you know, he was right. And so, you know, took a haircut for several years from an income standpoint, but, you know, it all ended up paying off,
So looking back on that, I’m sure going into, say, putting in your notice that you’re going to resign and pursue this other opportunity there was some uncertainty. How long did it take for that uncertainty to leave?
Dennis Kelly 9:01
A couple of years.
Or has it ever left? Okay, alright.
Dennis Kelly 9:07
You know, so I left, I worked for Prudential insurance. And we were selling corporate health care plans here in the States, really marketing the, like the first HMOs that were being rolled out across the US by Prudential. And so, you know, I learned a business, I learned health care, how it works in the US, how insurance works in the US, and I jumped into a healthcare software company. But the two businesses had nothing to do with each other. And so I really didn’t feel like I knew what I was doing for a couple of years. And, you know, at the end of the day, you can fake it somewhat. But you know, that feeling that you really don’t know what you’re doing, it gnaws at you and so it took me a while. And then, you know, after a couple of years, it all started to click, we changed the business, you know, got rid of the hardware part of the business, just focused on software and simplified things a little bit. And, you know, it all just started to come together. But as a startup person, I think you always have fears, and you have to become comfortable with them. And you know, they’re a part of you, they’re not something you can just ignore. You have to be able to acknowledge them and say, Hey, this is a part of this life. And sometimes it’s those fears that help drive you, right, and help keep you working late and help keep you, you know, a little bit on edge and not getting too comfortable. So, I think they subside over time, but they’re still always there.
Okay, okay. The reason I asked that question is, you know, both Ken and I, so my background is CPA, Ken is a network engineer, both very stable jobs, have both, you know, inside of the last two years fired the man, and are going out on our own, and I would be lying if I said there wasn’t a little bit of uncertainty there. And I think a lot of our listeners that, you know, that, you know, if they’re thinking about quitting, may have some uncertainty, or post quitting, realizing, hey, this uncertainty doesn’t really go away. And so it’s good to hear those stories and, and hear the things that you did to overcome those fears, so.
Dennis Kelly 11:29
Yeah, yeah. And, you know, I think as you grow over time, and you acknowledge them, and you accept those fears, they’re just part of your day. They’re less dramatic. Right? You guys have probably seen that yourselves. Right. Like, it’s still there, but it’s just not as prominent in your thought process.
Okay. Yeah. Yeah, absolutely. Absolutely. I would agree with that. So that was the first venture was this software company. And then what was next? What came next?
Dennis Kelly 12:00
Yeah, so that that company I worked at for about eight years, and we were able to successfully sell that business to a larger healthcare software company. And I stayed on at that company, and was VP of Sales for a couple of years. And it was a great experience, you know, dealing with a larger sales team, larger company, still not a huge company, but you know, as more of an executive rather than a entry level person. But again, you know, after a couple of years, I was like, Alright, I’ve tasted what it’s like to be on my own. And it became pretty clear that this was not a long term thing for me. And so, right about that time is when the.com world started to blow up. And so, you know, took some time and I started thinking about, you know, what I wanted to do in this whole world, the internet, and I was obsessed with it. It was so interesting in 1997 1998. And, you know, I’m able to trade stocks online and do email and like, all this crazy stuff. And then I met another person who had some similar ideas, and we formed a company to create one of the first online calendar systems. So if you’re familiar at all with Google Calendar, we essentially built what Google calendar looks like, and acts like, back in 1998. And we raised a whole bunch of money, it was called www.anyday.com. And we were partnering up with big internet companies like Yahoo, and Lycos, and, you know, we were the online calendar for some really big internet based properties. And it was a whole dot com thing, you know, raise a ton of money, hire a ton of people were spending it on the huge iron, Oracle databases, and you know, huge Sun Microsystems servers, and, and it was a great run. We had a fabulous run for a couple of years. And, you know, as the.com thing started to fall apart, we were in discussions with some companies to either invest in us kind of strategic investors afford to acquire US. And so as we started to see the.com world starting to fizzle out, we thought, well, we better sell this thing while we can. And so, we ended up selling the business to a company called Palm, which, if you guys are old enough to remember the Palm Pilot, but it was like the first big handheld computer that became kind of part of the popular culture. So, you know, and those handhelds had a calendar on them. And we had the biggest user base of web based calendar users. And so we ended up staying at Palm for a couple of years and building out a whole bunch of different services around that. And, but once again, you know, big publicly traded company, I had a nice role and a good team. But I was commuting a lot from Boston to Silicon Valley, it’s kind of a killer, especially with young family. And again, you know, it just didn’t make sense for me to hang out and spend a lot of time in a big company like that.
Very nice, very nice. I know we’re going a little off script, but I’m loving your stories, it’s hard for me to envision life without a digital calendar. And I know that it’s hard to imagine doing business without calendar invites, or with, you know, writing it down on a piece of paper. And so that is wild, so.
Dennis Kelly 15:59
Yeah, everybody had everbody had paper that we’d carry around in a briefcase, and you handwrite all of your appointments. And, you know, what we thought was, well, hey, let’s just replicate that experience, and put it up on a screen and, but then give people the ability to do the invitation, right? That was such a huge breakthrough that, you know, just put in their email address, and we’ll send them an invitation to their calendar. And then what we did that was pretty cool is that the people that were using electronic calendars at a time were they were on their local PC, right, or on their handheld on the palm, they would use the calendar. And so things like Microsoft Outlook, and Lotus Notes and things like that, that were PC based, had their own calendar systems. So we would do a synchronization between your Outlook calendar and your any day calendar so that, you know, your family could log in and see what you’re doing. Right. Or you could send invitations from any day to multiple business people and connect them all because you couldn’t really do that with outlook or with palm. So, and that’s how we sort of made a way around the local storage of calendar information to the web.
Okay, very nice. And so worked with palm for a little bit and then then what came next?
Dennis Kelly 17:27
Well, while I was working with palm, some of the engineers that had been with me for a while, at any day, and I were, we were running all of palms web properties at the time. And, you know, we noticed that the data center operations were becoming more and more challenging as the network volume started to grow on the internet. And so some of these guys are really smart. And they developed some ideas that could help companies better manage the way that their internet connections would work, and help them stay up and running all the time instead of constantly going down. And so they asked me to help them out. And, you know, this company, we did a quick little company with a couple of engineers, and built out this datacenter product that we call adjoin systems. And it was designed for companies that were growing their internet presence, and to have a little bit of a console to understand their internet traffic better, and to see when it was starting to fall apart. And when a server was about to fall over. You know, it was a real engineering lead project. And, you know, I was a CEO, and, you know, I’d help out with kind of product management. And it was really, it was really about the code. And so we didn’t really raise any money, we just it was a very small effort. And it got quickly snapped up by computer associates, which had a big data center kind of software operations group. So I didn’t have to stay at computer associates, my pattern was pretty well established at that point I wasn’t going to hang around. So I left there after, we did adjoin systems for a year and a half, two years. And that was about it.
Okay. I’m observing a trend here where the universe continues to pull you back into entrepreneurship, which I love and I think a lot of our listeners can really relate to, and I really want to pivot and get talking about e commerce, but how many more times did the universe pull you back into entrepreneurship before you got into postalytics?
Dennis Kelly 19:40
Two other times prior to this.
Dennis Kelly 19:42
So, another software company and then the retail company that I did, and then after I got out, we sold the retail company I wanted to get back into tech and that’s what ended up becoming postalytics.
Okay, okay. So for, let’s start with what is direct mail for some our listeners may not be familiar with what that is. So, let’s start with that.
Dennis Kelly 20:04
Absolutely, yeah. So, direct mail is a marketing effort. And it uses postal mail, like printed physical mail to deliver messages and sales and things like that. So, and it was, it became very, very popular with catalogs originally. Right. So the idea of printing a catalog, sending it out, and then people buying, right. So, direct mail was the original channel of the industry that was the predecessor to e commerce, right? Where, you know, today you go, you go online, and you see a catalog. But in the old days, people would print a catalog, mail it out, and then you’d fill out forms and mail the orders in, and with a check, and that’s how it all worked. And so Montgomery Ward started, really the whole concept. And it became very analytical and very performance oriented, one of the very first performance marketing channels. And so was a huge, huge channel to sell things through the mid 2000s. And right around the financial crisis, as ecommerce and the Internet start exploding, financial crisis happened, people pulled back a little on their direct mail spend, it’s been in a sort of slow decline ever since. So total direct mail volume is down about 30% since 2008. And so you may ask, okay, Dennis, you’re investing in a declining business. What’s happened to your brain? And but the reality is that it’s still a $40 billion spend annually in the United States alone. So it’s a big business. And it’s a business that has been largely neglected by technology. And so what we’ve done is we’ve built a software tool that we call postalytics, that enables marketers to essentially pull together a campaign and send it out with a very similar experience that you would have for an email marketing campaign. So if you ever used a tool like MailChimp, or Constant Contact, or any email marketing tools, you know, you go online, you create a, you put your creative together in an email template, you upload your list, you press send, it gets sent out to email servers, and then there’s tracking about what mail has been delivered, what email has been delivered, who’s responded, this type of thing. We designed postalytics to essentially do the same thing, except when you press send, it doesn’t go to email servers, it goes to printers that are located around the country. And the printers actually take the digital stuff that we do, turn it into a physical printed thing that gets generated, gets put in the mail, and then gets tracked for its journey to the home. And then we have tools that help the marketers understand who responds to that mail, so that they can see, alright, here’s the people I sent to, here’s the people who responded. And then I can synchronize that back into my CRM, like HubSpot or Salesforce. So that direct mail, printed direct mail can work right alongside email, in campaigns that are combining both and so that’s really the idea is, throw technology in a big sector that’s been neglected. And, you know, help people be more productive and have a better experience.
I like it. I think it’s really interesting. So taking a step back, and I’m going to date myself on this a little bit. So this was pre internet, when I remember getting Sears catalogs every year. And so you know, pre internet and it’s like, well, how are you going to know what’s going on? So we would get a Sears catalog, direct mail, and I really never understood what that was. So now fast forwarding to today, I think the concept is this kind of, like you mentioned, it’s declining, but maybe no one’s grabbed a hold of tech yet and kind of integrated it in right with deep integration. So I think it’s really interesting. So Dennis, can you explain like, this is kind of a two part question. So how can direct mail help, let’s say a purely ecommerce business, let’s say your sales channels or your your direct to consumer website, maybe you sell on Amazon, maybe you sell on Walmart. How can that help a business like that? And the second part of the question is, do you send do you have to have a list of previous customers? Or can you do outreach to new customers? Can you grow your customer base or increase your cart value of your existing ones?
Dennis Kelly 24:47
Yeah, great question. So what direct mail and specifically postalytics is used for in the E commerce setting is often to augment the email marketing that has already been established. And so, for example, we have a case study on our website, there’s a company who, you know, had been emailing to old customers, and say, hey, you know, you have an order in six months, you know, here’s a special. And they’ve been doing that for several years. And they saw a declining response to that campaign, they call it their win back campaign. And so what they decided to do is to plug postalytics in to their email marketing tool. And so there was a several email sequence that would go out in this win back campaign. And if a customer didn’t open three emails in a row, then the software, the email marketing software would say, hey, let’s send them a big oversized postcard instead. And with a, you know, a great offer. And so there would be a three to four postcard drip sequence that would go out to augment that existing email marketing tool. And so they ended up having huge success because, you know, these people are not accustomed to getting something in the mail from this company. And you know, this, when somebody is not opening your email, that doesn’t mean they don’t want to hear from you. It just means that they don’t want to look at your email, maybe they get, you know, 500 emails a day, like I do, you know, and I can’t look at them all, it’s, you know, physically impossible for me to look at all my emails. So, you know, I mass delete all day long. And so, you know, by switching it up, and using a different physical channel to reach somebody, you can really drive great success out of an existing marketing campaign that you’ve already got. So that’s kind of one type of use case, and what was the second part of the question Ken, sorry?
Yeah, the second part is, you know, can you reach in the existing audience? Or can you do outreach for new clients?
Dennis Kelly 27:15
Yeah, yeah, great question. So about 40% of our clients are using postalytics for lead generation. Right. So going out and finding new people. And so one of the great things about direct mail is this. Addresses, names and addresses are public information, you can go down to your county or your state records. And you can find out the names of people that own homes and who live in apartments, completely public information. And so there are not the restrictions, regarding sending mail to those physical addresses that there are for email marketing. And so you know, it’s not cool to buy email lists, right? And send out emails to people that have never heard of you before. But with direct mail, you can do that and it’s kind of what happens every single day. So you can use direct mail to send a very, very targeted lists. So we’re not a list company, but we can hook people up, we have a lot of friends in that business. And so you can say, hey, you know, I’m trying to sell baby clothing, to, you know, families in this sort of demographic in this geography, who are homeowners with three or more kids, and an income level of this, right, and you can buy mailing lists that are very accurate, and send targeted promotions to them using the mail. And so it’s a great way to both grow your customer base, but also to experiment and learn, you know, what are those segments? And what are the messages that actually are meaningful and are breaking through the noise to your core audiences? Because you can do this without spending a huge amount of money and without getting in trouble with your email service providers or, you know, any of the stuff that you would get if you were to buy email lists that are the equivalent.
Sorry to interrupt the episode. You may have heard Ken and I talking recently about a new tool that we’re using for Amazon refunds. Now I have used other refund tools like this. However, I can tell you in the first seven days, they scrubbed the back end of my Amazon account going back 18 months and found $5,000 of refunds. And the nice thing about this is it’s my money, Amazon made a mistake and they are just auditing my account. The other thing I really like about this tool is there is no monthly fee. They only charge a commission If they are successful in getting you your money, go to www.getida.com GETIDA, and enter promo code FTM for firing the man FTM 400. This is an awesome tool. I can’t say enough good things about it. Now back to the episode.
That’s yeah, that’s pretty, that’s pretty amazing. So before I turn it over to David, one more follow up question on that one. So let’s say you get a list and you’re going for, you know, lead generation you’re sending out, say, 5000 direct mail or 10,000 direct mail, and can you maybe describe the backend of how postalytics like kind of digs into the metrics on those on how do you know who those reached and what actions they took? Can you describe that a little bit?
Dennis Kelly 30:48
Yeah, great question. So there’s a couple of different things. We’ve built tracking mechanisms to track both the production and delivery of the mail, as well as the response to the mail. And so from a production and delivery standpoint, I mentioned that we have print partners, and so when we generate a campaign, each piece of mail is being tracked through the printing process, we’ve got a dashboard that says, here’s exactly where each piece of mail is in the printing process. And then it gets handed off to the Postal Service. And there’s a little known tool that the US Postal Service has, it’s starting to be implemented in other places around the world, where there’s a little barcode that gets attached to some pieces of mail. That barcode, we have connected back to the contact that was originally imported into postalytics. So every time that barcode gets scanned by the US Postal Service, it’s giving us information about where that piece of mail is in their delivery process. And so the Postal Service built that for their own internal tracking, but they made it open so that anybody could tap into it. So we’re actually able to track a piece of mail that it moves from the printer to the local depot where the mail enters the mail system to the regional distribution facilities back out to the local depot where it’s going to be distributed to a local post office, and then to local post office. So, we’re able to track the mail all the way through. And along the way, the postal service may say, you know what, this address is no good. It’s, the person’s moved, you know, we don’t have the forwarding address. This was, for whatever reason, the addresses isn’t any good. They kick off an event that they call it a return to sender event, we actually capture that electronically, alert the customer say, hey, you got a bad address. And then we block that address from ever being used again, in their list. So from a delivery tracking, there’s a ton of data that we’re capturing, like along the way and helping the customer deal with all that, then we’ve developed proprietary tools to help the customer understand who responds. So often you’ll find an offer on a piece of mail that’ll say go to this URL, and respond. And so we’ve developed ways to make those URLs unique. So when David gets a URL, it’s different than the URL that Ken gets. And so when you go to the URL, David, I know this is David from this particular piece of mail from this campaign, as opposed to when Ken responds, and then we also wrap that up in QR codes. So if you hit a QR code with your phone, and you go online and you complete an order, I’ll know that it was David, who placed the order and Ken did not.
Okay, yeah, that’s awesome. I like that. I have more questions. But David, I’m gonna kick it over to you for now.
I’ve got a couple eating at me too. I love this conversation. So, say someone’s listening to this and they say, hey, this is something I’d like to look into. You know, with Facebook’s new regulations this year with email, like email addresses are getting more expensive, and conversions are lower. And so I do think this would be an excellent opportunity for people to explore. So say someone comes to you and says my primary product is weightlifting gloves, and I’m interested in doing direct mail. Where do I start? And can you comment on like the marketing calendar that would potentially lead to the most effective conversion really is what you’re chasing?
Dennis Kelly 34:55
Right. Right. So you know, the good news about folks in the E commerce world is that they have names with good addresses. Because they shipped the product to somebody. And so that’s a great start. And that’s where we advise people in the e commerce world to start is, hey, let’s pick off the low hanging fruit. Let’s focus on people you’ve already sold to. And you can worry about cross sell upsell, right, so they place an order for something, and maybe they didn’t take advantage of something that was presented in the shopping cart as an upsell or cross sell. Well, we could use, we can connect to that E commerce system, take that order, take that address, insert the creative, and send out a postcard with maybe another 10% off to try to get them to bite on that extra cross sell opportunity. So that’s one easier hit and other one is I’m having a sale, and I’ve been hitting my email list of existing customers and I’m going to send direct mail to the people that haven’t opened my email, which is probably 70 to 80% of your list is not opening your email. And so you can send direct mail, don’t send to the people that are opening, because direct mail costs more, right? But be smart and focus on the people that are not getting your message that aren’t learning about your sale, or send direct mail to the people that have opted out of your email, right? So a lot of times people opt out of email, because they get too many emails. Right? And again, there’s no can spam law or anything like that to prevent you from sending them a physical solicitation. So, you know, for e commerce people that we talk to when they’re starting up, we say, you know, there’s two ways to look at this. There’s a lead generation kind of acquisition concept. And then there’s, you know, marketing to your existing base using a new channel. And often marketing to the existing base is easier, gets better responses, because people already know about the brand, right, they’re familiar with it, and they’re owned, they’ve already spent the money to get that customer. Right, then use another channel to help get you know, generate more revenue off of that investment you’ve already made.
Okay, and one follow up question and Ken, I’ll kick it back to you. I know we’re both itching with questions here. So I used direct mail about two years ago to find off market real estate deals. And I went pretty deep in learning about it and found that there was little tricks and tactics that were helpful in increasing your conversion rate. For instance, when I put a picture of me and my wife on the postcard, and said I’m a local investor, that really increased conversion. We also selected a font that appeared to be hand written in blue ink, and that increased conversion and you’d split test your campaigns against each other. And so, and I’m sure that the real estate direct mail and E commerce direct mail may be different, but what are some, as people are, if they’ve decided to go down this road and are coming up with a creative, what are some things that they can do to increase the conversion rate?
Dennis Kelly 38:33
Well, I think you said the magic word. And that is testing. Right? So we advise that our clients approach this channel, and any marketing channel with a testing mindset from the beginning. And it’s interesting, those techniques that you mentioned, we do see a lot of customers in in the E commerce space, they will use those specific things you mentioned, a picture of the owner, his family, handwritten fun in a letter. But often, that’s not to announce a sale. That’s not to, you know, hit you with a powerful visual and a big offer. It’s to thank you, and maybe ask for a review. Right, because, you know, it’s more of an emotional thing that you are driving there, like, hey, I’m a real person, you know, this review will help my family. That’s the image that you are promoting in that type of communication. And so, we recommend that folks test at multiple layers, they test format, postcard versus letter. Then they start testing headlines. They start testing calls to action. They start testing, you know, font size, it’s really an ongoing process, and the best direct mailers the biggest best direct mailers have been doing it for 30 years. They have what they call their control, that they have been running on it through tests for sometimes 10 or 15 years, every single campaign involves some test in order to continue to refine.
Interesting. Yeah, this is a little bit of a tangent, but on the topic of including pictures of your family, I think that’s something that ecommerce sellers should really consider because you hear a lot of people say, you know, I like to support local businesses or family owned businesses. And the number of people that have Amazon Prime accounts that believe that they are purchasing from Amazon is astounding. And you know, I often tell people, yeah, we have like, both Ken and I have family owned businesses, this is what we use to put food on the table. And while you’re using Amazon as a platform to purchase, you are purchasing from a family owned business. And I think including that would be helpful, but like you mentioned, test test test. I always get skeptical of people that do not advocate for that. So yeah, no, I couldn’t agree with that more. All right, Ken, I’ll kick it over to you.
Yeah, sure. So a couple more follow up questions before, I know we’re getting short on time, before we get into the fire round. So Dennis, if you could maybe at a high level, speak to conversion rates, like you mentioned, there was a campaign with QR codes, and let’s say you’re trying to drive traffic to a website for a new product launch? Could you speak to, maybe at a high level, what is the conversion rates of that direct mail campaign? Or industry kind of standard?
Dennis Kelly 41:46
Yeah, sure. So the conversion rates vary quite a bit based on a variety of factors. What I would say generally, is that when you are mailing to known customers, conversion rates are typically double, that of cold leads. And so we see conversion rates, often to existing customers, in the 10, five to 10% range. And, you know, from a lead generation perspective, you know, when they’re cold leads that you’re mailing to, you see one and a half to say three and a half percent. So, you know, it’s significantly higher when you’re mailing to existing leads. Now, we have, we have some campaigns, we have some customers that have hit 18%, right, because they are really drilling in, and sending an offer that is time sensitive, and important to that recipient. And they get very, very high response rates. So you know, really, it’s the audience that you’re talking to, and it’s the offer that you’re making, that will be the primary sort of driver of response rate, in our experience.
Sure. No, absolutely. And yeah, I mean, that’s, you know, kind of similar to email or, you know, it’s pretty relative, I think. The follow up question on and probably what everybody that’s listening to this is thinking is what is the cost of direct mail? And so, you know, not to get super down in the weeds, but just add up, so let’s say I’m launching, David mentioned weightlifting gloves, I think so, we’re launching a new set of weightlifting gloves. And we want to do a lead gen campaign for let’s say, 20,000 really targeted customers. So what would, at a high level, what do you, what is the cost of a campaign like that?
Sure, sure. So, the way that we do pricing is probably different than what you run into when you’re dealing with an agency or a local print provider. So we have, we’re a software company, so we have plans, right, so we have a free plan, and we have subscription plans. And what folks will do is they’ll go to our website, you know, check out some of the case studies, you know, learn a bit about how the software works, watch some of the videos, then they’ll sign up for the free plan. And they’ll set up some creative, they’ll run a little test campaign, maybe send some mail to themselves and you know, some and you can do that. You can send out individual pieces of mail, one at a time. 5 10 15 doesn’t matter. And it can all be personalized and everything else. So you can do that and it’s pretty expensive per piece, like maybe, you know, $1 per piece, right? But then as you start getting volume, we can go get better deals with our print partners. Right? So if you’re going to be sending out 20,000 pieces, then we can drive down that per piece cost, you know, more down into the, you know, 50 cent 60 cent range per piece, and so it becomes far more as you scale up, it becomes a far more, the unit economics work better.
Sure, no, absolutely. Yeah, thanks for sharing. So, David, and Dennis, anything else that we want to cover before we get into the fire round?
I’ve got one more. So if someone wants to dip their toe into the water for direct mail marketing, I would imagine that there’s a certain threshold of their marketing budget that they should set aside to see if this works for their customers. And what I found when I was doing direct mail for real estate was, every sequential campaign got better, because my list got more refined. And I’d weed out the addresses that didn’t have responses. And so actually, Ken, you and I are getting ready to do some fiscal year 2022 planning. So, if Ken and I want to dip our toe into the water, what portion of our marketing budget should we allocate to give this a good, honest effort to see if it’s a good fit?
Dennis Kelly 46:12
Yeah, yeah. So I would recommend that folks think about spending about 10% of the marketing budget on direct mail and give it a year. As you said, if you approach it with a testing mindset, and if you are touching your list multiple times from different angles, you’re using different methods, you’re going to learn, and you’re going to start seeing results. And so there’s been a lot of studies that show that people are often touched around seven times before they make a decision. And, and so if you’re not reaching them with your email, if you’re not reaching them with your digital, you’ve got to find a way to get in touch with them. And so, you know, allocating 10% of your marketing budget to send them something physical, that they have to pick up in touch, and look at, regardless what they do, if they throw it away, they throw it away. But, you know, unlike that email, that digital ad, you know, they actually have to look at it and make a decision as to what to do. Right. So, you know, you’ve got your ecommerce provider, you’ve got good addresses, you’ve got good names, right? You’ve got sales history, you can put something together that can target these people that have fallen quiet through your other campaigns, think about 10% of your budget to go do that.
Nice. I like that. And I like that strategy on segmenting into the unopened. And so really, you’re getting maximum penetration. If 30% of your list is opening, the other 70 gets a direct mail and you get more on that. So, I really like that. Yeah, I’m sure David and I, we have tons of questions. We’re going to be talking about this after the show for sure. But and, you know, be respectful of your time we’re coming up on time so, are you ready for the fire round, Dennis?
Dennis Kelly 48:07
Yeah, let’s do it.
All right. What is your favorite book?
Dennis Kelly 48:10
A soldier of the Great War, by Mark Helprin.
What are your hobbies? What are your hobbies outside of being an entrepreneur?
Dennis Kelly 48:21
I love golf, skiing, basketball, any kind of sports where I can be running and jumping and you know, being outdoors I’m really happy.
Awesome. Very cool. What is one thing that you do not miss about working for the man?
Dennis Kelly 48:36
I do not miss sitting on calls and meetings where people drone on for long, long periods of time. And everyone has to sit there quietly and pretend that they’re paying attention.
Nice. Same. What do you think sets apart successful entrepreneurs from those who give up, fail or never get started?
Dennis Kelly 49:01
You have to have a feeling that you can succeed no matter what. As long as you work hard enough. You have to believe that, if you believe it, then it’ll happen.
Nice. Love that. Love that. Alright, David, you want to close out the show?
Yeah, Dennis, how can people get a hold of you?
Dennis Kelly 49:23
Sure. Well, first, you know, go to www.postalytics.com, our website, got tons of stuff there. And you can hit me up on LinkedIn, it’s Dennis John Kelly, LinkedIn. And those are the two primary ways that folks get in touch with the company or get in touch with me. And you know, love to hear from anybody. Sign up for the free account. Try the software out and we’d love to talk with any of your clients, any of your audience.
Awesome. And to the audience, we’ll be posting links to all of that in the show notes. Dennis want to thank you for being a guest on the firing the man podcast and look forward to staying in touch.
Dennis Kelly 49:58
David and Ken, it was a blast. I’ve really enjoyed talking to you guys and we look forward to staying in touch too.
Thank you everyone for tuning in to today’s firing the man podcast. If you liked this episode, head on over to www.firingtheman.com and check out our resource library for exclusive firing the man discounts on popular e commerce subscription services, that is www.firingtheman.com\resource. You can also find a comprehensive library of over 50 books that Ken and I have read in the last few years that have made a meaningful impact on our business, for that head on over to www.firingtheman.com/library. Lastly, check us out on social media at firing the man, and on YouTube at firing the man for exclusive content. This is David Schomer
and Ken Wilson. We’re out.
Before you go, fun fact for all you Amazon sellers out there when you start selling an international marketplaces, all of your reviews come with you. At the beginning of this year Ken and I sat down and talked of ways that we could double our businesses in size and landed on international expansion as our number one initiative this year. We partnered up with Kevin Sanderson from maximizing e commerce and he has made the process an absolute breeze walking us step by step through the process. If you want to grow your revenue and reach new customers head on over to www.maximizingecommerce.com/fire and connect with Kevin Sanderson today. Now back to the show.
Transcribed by https://otter.ai