Latest / Glovisor Podcast / Ep. 36: Everyone Says Direct Mail Is Dead… Here's Why They're Wrong | Brad Kugler

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Ep. 36: Everyone Says Direct Mail Is Dead… Here's Why They're Wrong | Brad Kugler · Glovisor Podcast

• Joe: Everyone talks about digital marketing, but the real wins come from people who know how to supercharge direct mail with data and technology. Welcome to the Globizer Podcast, where we explore business growth, communication, and personal development through real conversations with people that make an impact. Our guest is the CEO of Direct Mail 2.0, Who's Mailing What, and DM20.ai. Three platforms dedicated to helping marketers and commercial printers achieve better results from Direct Mail. A lifelong entrepreneur and innovator, he combines data. Technology and market intelligence to help businesses make smarter marketing decisions, improve campaign performance, and uncover new growth opportunities in an increasingly competitive marketplace. Globizer welcomes Brad Kugler. Brad Kugler: Joe, thank you so much. It's I'm happy to be here and I couldn't have done a better introduction myself. That pretty much explains it perfectly. So what would you like to know? Where would you like to start? Joe: the first question we have for you is, Brad, what do you do? Brad Kugler: Great question. So I want to be a disruptor for a technology or or a marketing angle that's been around for decades. It's direct mail. part of that comes from my story, but basically what we do is we take direct mail and we make it better. Now to be more succinct, we don't print or mail anything. We take direct mail campaigns and we add 15 different technologies on it to Improve the lift to report real time on its performance and as well as provide modeling and competitive intelligence on your campaign to help you improve it from the get-go. We have three different platforms that do that. and we've been in business since 2017, and we have improved the response rate on over 2 billion pieces of mail and over 80,000 different campaigns. And that's for about eight thousand clients at this point. Joe: what's the difference between the three platforms? Brad Kugler: our original platform is is called Direct Mail 2.0. And what that did, and the easiest way to explain it, Joe, is you've probably got an advertising mail that has a barcode on it or a text back number, and you've been able to scan that that QR code or you text back a certain number and then it engages with you with a form or it it somehow continues that engagement. We are the people behind those type of technologies, but that's not where it ends. That's where it begins. We will track the mail just like packages are tracked. You can track an individual piece of mail when it lands at a person's house. And people will say, well, what's the benefit of that? Well, if you're a marketer, you want to know when that mail's arriving. You want to have your sales team ready. You want to have your store or your brick and mortar ready to receive those people. You want to anticipate that delivery so that you can deliver to that demand. The other things we do is most people may not have heard of this, informed delivery through the post office where you get an email of everything that's going to be in your mailbox that day. Wonderful piece of technology that has click-through rates of 30 or 40%. So if you're doing direct mail and you're not doing this, you're missing out on half of the engagement. Of course, on top of that, we are digitally targeting the recipients of the mail. When I say digitally targeting, we're delivering ads. To the devices and the household of the people receiving the mail. So not only are you getting that one impression in your mailbox, but we try to get every single mail recipient eight to 12 additional impressions. And you know, what's what's step one in marketing? It's repetition of message. So if you're gonna spend good money getting that piece of mail into someone's hands, now we're gonna get you for a few pennies more. Eight to twelve additional impressions. They can be on your television through cable TV advertising. They could be on retargeting, they can be on social media, you name it. We are going to get that same message delivered to that household, to their devices, to reinforce the piece of mail that was invested on heavily to get into their mailbox. We do other things like de-anonymize website traffic. So if somebody goes to your website as a result of the mail, we will know it. We will get an address that will resolve, we will match it back to the mailing list so we can prove true attribution to that mailpiece. So, in essence, what we're doing is we're taking the old school direct mail, and by adding 15 different technologies, we are boosting the engagement rate of that piece of mail by up to 50% for maybe a 10 to 15% increase in cost. So the value prop is real simple. You're gonna spend thousands of dollars on a direct mail campaign. For a few hundred dollars more, are you willing to risk not lifting that engagement rate? Or can you spend a few extra pennies per piece and get a 50% increase in engagement on the mail piece? That is what we do. We show all the results real time. We track the leads that went to the website, people that called, people that responded to emails, people that sent texts. It's all on one dashboard for the marketer to see how effective that campaign is in real time. Joe: Well, before you move on, someone had mentioned this to me in passing and said if you're planning on doing a one time mailer, don't bother. Because it's just not worth it. What from your perspective, what what do you say about that? Brad Kugler: a hundred percent true. And and and it's one of the hardest objections to overcome when trying to convince someone to do direct mail because they hear, I can send you know 100,000 emails for a couple hundred bucks, or I can do a digital campaign and target 30,000 people for you know $25 a day. But then when they hear to get 5,000 pieces of mail into someone's mailbox, and you know what? You need to do it three times at the very minimum. That's 15,000 pieces of mail. That price could be ten thousand dollars. They almost fall out of their chair. Okay. So so there is a price shock. But the way to dismantle that objection, having been in this industry for almost a decade, is the engagement rate of a physical piece of communication goes so much further than an email that most people will never see or delete, or some banner ads or social media ads. I mean, Everybody's scrolled their Instagram or their Facebook or TikTok in the last couple of years. Every other thing in your feed is an ad. It's becoming a level of noise that's hard to get through. So the real proof in the pudding is to do them in conjunction with each other. The same message through multiple channels will get the lift in engagement. And yes, one time is not enough. It is a commitment. that has to be repeated. But y you can almost go to any marketer and they will agree that probably one of the most successful things is direct mail. It's convincing people to spend the money Joe: Sure. All right. I'm dying to hear about the other two platforms. Brad Kugler: So the other two platforms are very interesting. So this was an execution of a direct mail campaign. The other two are in preparation for that execution. The first one is called Who's Mailing What? That question says what it is. If you're going to direct mail, do you want to know what your competitors are mailing to the same people? I would. What is their offer this week? What are they offering the last few months? What does their piece look like? We have a database that's been around for 40 years. I acquired this company about two years ago, and I acquired it because I'm trying to build the most comprehensive database on earth for direct mail, which I have. And I'll I'll get to that in a minute. But it's a piece of competitive intelligence. You can see trends by industries, you can see when people are mailing or not mailing for a particular region or a particular vertical. And this information is immediately actionable because. You've got Fortune 500, Fortune 100 brands in their big banks. If it's a financial offer or a mortgage offer, these guys know what they're doing. So if you can follow their patterns and follow their targets and see what they're mailing, you can improve your offer. You know who to target, you know who they're going after. And I guarantee you, if you're a smaller company, leverage what they're doing to what you're doing, and you should get an increase in success. So it's a subscription-based. access to a database that has a we call it who's mailing what chat built in, just like ChatGPT, and you say, tell me all the financial offers in the Northeast for credit cards in the last 60 days. It will show you all those offers and all the companies offering them and how many times they've offered it. You know, whatever your industry is, whatever your target is, you just ask it in plain language. We we retooled that database to be as Easy to use as a chat GPT. Just ask it what you want to know. It's a great catalog if you want to know what people are doing. That's the second one. The most recent one. Is I took all of the data from the two other platforms, all of the campaigns that we've run, all the databases, and I said, let's build a modeling AI engine. and and I'll I'll give you the backbones of how this was done. People say it's very complicated, which it's not easy. It's it's hard to get AI right. I'm sure everybody's experienced AI hallucination in responses. But we took all the campaigns and all the data, we dumped them into buckets by vertical. nonprofit, financial, real estate, automotive, you know, whatever, home services. And we've taken the creative and we've broken down them digitally. We digitize them. The headline, the call to action, the logo size, what are the images, how much text-to-image ratio, you know, all these things we've digitized this and we've put it into buckets by vertical, okay, as well as by the size of a mailing. And why is that key? You know, a guy who's mailing 100,000 or a million pieces versus a guy who's mailing 5,000 to a small region, they don't come into the same buckets. You know, those are definitely different size campaigns. So we've broken these things down into dozens of little buckets. So how does this help a guy? Let's say I'm a landscaper and I'm getting ready to do my spring cleanup mailing. Well, they upload the piece that they want to send. They upload their targeting, you know, the zip codes they're targeting, when they're mailing, how many they're mailing, are they targeting consumers or businesses, you know, because that makes a difference, and a few more kind of targeting questions. So they upload all this, it goes and churns against the database. So for that vertical, for that time of year, for that size of mailing, for that geolocation, we've created benchmarks for all these verticals. And it's plotted based on the creative and the targeting. And it has a benchmark that averages them all. The guy uploads his own. It says, based on past history, this is where we predict your campaign will end will register. And we do it with engagement rate. We can't do ROI because a guy selling hundred thousand dollar vehicles or twenty-five dollar pizzas. How do you combine those ROIs? You can't really. So we combine it in the rate of engagement. How many people went to the website? How many people called the number? How many people scanned a QR code? How many people clicked on an email? And we rate that engagement rate and what we expect his will do with what he's submitted. And then we provide a three AI model recommendation. We go out to Chat GPT, to Gemini and Claude, and we feed all this data back to them. And then we say, How can we do better based on all this data? And it gives him recommendations and how he'll do and when he should mail and when he shouldn't and things. And that's what it does. And we charge anywhere from $12 to $99 for that test, depending on the subscription or no subscription. everybody gets a free trial. Come in and try it out for free and see if you like the results. We've had a lot of good, honest feedback. We update the models every 40 days with new campaign data. And it's it's really a piece of frontier technology. Nobody has done this with direct mail campaigns. We are the first and we have the biggest database that we're running these models against. So I'm super excited about this technology. It's kind of cool to be the first guy there and sort of figure it out. And you know, when you're the first guy there, you're also figuring out the market too. Joe: Right. So you mentioned local landscapers, and then you also mentioned national banks. Who Brad Kugler: Yes. Joe: is your ideal client? Brad Kugler: our ideal client is anybody that uses direct mail to advertise. We have tools to improve it. We've branded ourselves the performance stack for direct mail advertising. That is our branding. That is what we're promoting. So if you do direct mail, it behooves you to at least look at our technology stack and see if it can improve your campaign. I know it can, but we've got to prove it first. Joe: I think when you acquire the company, there might have been some people who said Brad is crazy. He's going into a a prehistoric business and he's getting into it, not thinking of all the visions and all the things that you've layered since that takes that to the next level. so how how did you deal with that? How did you have that vision initially when you acquired the company, or is this something that just built as you went along? Brad Kugler: No, no, no. I I it was well known in advance. And I if I may digress to my sort of origin story, okay? I was in the business of selling DVDs and CDs. I mean, there may be some younger guys that are like, What are those? You know? I was in VHS before that. We had a wholesale distribution company that sold telemarketing over the phone to blockbuster franchisees in the late eighties, early nineties. I came right out of college and I this is what I was doing, family business. Went really well for 10 years. Great business. Built it to 25 million. We had 50, 60 employees. We had 100,000 square feet under roof and a warehouse. But we knew, even in the late 90s, that technology was coming that was going to disrupt this, mainly the internet. So we went heavy into e-commerce. Business continued to to go up for years. Probably around 2010, 2012, the writing was on the wall. Netflix, Apple, Amazon were all beginning to sell subscriptions of package media. They were competing with me. The digital streaming was beginning to get tested in certain markets. I was like, uh-oh, this is for real now. I'm gonna get disrupted out of this universe. And I'll be honest with you, I dropped out of college. I never finished my degree. And here I am coming up on 50 years old. I got two kids in college. And I'm like, I I'm gonna be out of a job. This is this is happening. You know, I we were losing revenue at 30% a year. Margins were shrinking by 30% a year. I went from 25 million back to three million in three years. Lay layoffs of 10 or 12 at a time every quarter. It was painful. Real estate that we owned to house all of this inventory that was evaporating into its value. margin calls by banks. It was it was it was the most stressful time of my life. And it was coming fast. And the light at the end of the tunnel was no light at the end of the tunnel. It was the oncoming train. I was able to to maneuver through that complex minefield. you know, we had a a three million dollar line of credit with with Merrill Lynch to fund inventory and they they called it with at 60 days notice. We need this paid off. I I can I can tell you I I aged and didn't sleep well for many months during that time. I was able to secure another SBA loan to sort of take that out, but we were any penny of profit was going to pay down the line. And I said, I I need to figure out what's next. No college education. I started, I I I w literally I went online and I started reading all the MBA books that they were le reading in business administration postgraduate classes. I joined every tech group and I said, here's what I know. Whatever I do next, it's not gonna be disheading for disruption. I am gonna be the disruptor. Okay. So my mindset changed and I learned a lot. I learned a lot more on the way down than I did on the way up. I had a product everybody wanted in the 90s and early 2000s. And by the 2010s, I had a product nobody wanted. Okay. We tried to get into streaming. We almost had a deal with Hulu to resell streaming content to the education market. It died in the lawyers' offices to everything, the the rights, the legal problem was millions of dollars and the money wouldn't outweigh it. You know, so the market was too small. Anyways, this opportunity presented itself. Hey, we have this technology to keep direct mail alive, you know, and we're doing all these things. And and I immediately started churning. You know, we've got all these technologies we can add to it. So every every quarter we'd add a new technology. There were three when I started. I spun this business off of another business. I was recruited to do this by a a long term friend of mine. Joy Genduza, who runs Postcard Mania, was a print marketing company. And she said, let's spin this technology off into its own business. I said, I like this. Changed the model to recurring revenue model and a subscription model. And started adding different technologies and went from two or three technologies to 15. And then I started looking at the data we're acquiring, and I'm like, there's value here. And then the AI revolution hit, and I said, let me acquire the biggest database of direct mail. That I can because others didn't see the value. I did. And so I've been kind of on this strategy now for two years and it's getting some traction. Direct mail is a difficult market, but I believe I am the only guy positioned to make a play at this with these platforms I have. So That's the story. I am a disruptor rather than a disruptee. I'm ahead of the market curve. I am building everything in AI-based products, and I'm monetizing the data we've gathered over years that is, I mean, down to the household level, I know what people are buying and they're reacting to. This is a valuable database. So that's that's my story, and gets me excited to talk about it. Keeps me coming to the office every day. Joe: Love it. Well, correct me if I'm wrong, but I'm starting to see a shift again towards direct mail because most businesses are realizing that their emails are not getting open. No one's reading them. And direct mail might be the the future, which used to be the past. So I think that if even though someone would have thought that you were going to a prehistorical business, here you are going into the future. Am I right? Brad Kugler: I believe so. I mean, there is there is quantitative data that direct mail is increasing, but it's single digits increasing. So you're still losing some, but the but the the millennials and Gen Z are getting a bit of digital fatigue. That is known. So putting something tactile into their hands, and especially if you're combining it with the digital that they're familiar with. I believe that there's a future. And now you add AI into a component that will help them better target and create better creative that converts. Now you're really talking about a value system when you're combining an old school technology with new technology. And that's what I'm staying on the cutting edge for. I've taken seven, eight years to really immerse myself in this business. I've always been a technophile and I love learning. new technology and will continue to do b as long as I can. I'm coming up on sixty years old, I'll be honest. And most of the people believe that this techno stuff this technology is for the younger people and and I'm determined to prove them wrong. Joe: I'm with you on that one. would you be able to share with us a client success story? Brad Kugler: Yeah, you know, we we've done so many campaigns. We're seeing lifts where people were doing the direct mail campaign, they tried it once or twice and they've added on our product. And they've and I'm talking for them. I think there was a it was an educational and I don't remember the name of the college, but they're you know, colleges make their money on on recruiting new students. And it's it's the case studies are on our website, dm2o.com, and there's dozens of them. But this is a college that added our product and it is still with us today. And they use it every every f summer season or fall or whenever they attract their their new applicants. But they doubled their admissions, or not their admissions, but their applications from this. You know, and they get fifty, seventy-five dollars an application. So if you went from two or three thousand to four or five thousand, that's a that's a huge revenue jump, you know? And so there's There's so many of those. I would I for specifics, I'd have to direct you to to the website. There's d case studies and testimonials. And basically, what we've done also is a lot of the brick and mortar printers, and these I can tell you another one specifically. They were a very small mom and pop letter shop doing about two million dollars. They licensed our platform for resale. This is this is a white labeled product. So It's not always sold under our moniker. And over two years, they increased their revenue from two million to five million dollars. Now I'm not gonna say it's all this product, but this was an add-on. So they were selling their their ink on paper and their their logistics. Now they're adding a marketing action to it too. So we we basically sell this at a wholesale cost and they market up to their customers. Some of the customers do it as a differentiator and they pass it on for free. Some of them, it's a it's a big profit center for them, you know. so there's dozens of stories of printers who have sort of revitalized their direct mail business by reselling this platform, which is, you know, out of the box, ready to roll. Joe: Thank you for explaining the pricing process. But can you get us on the same page? How does the white labeling model work, Brad Kugler: Absolutely. So let's say you've got a printing company in St. Louis. They do direct mail for clients. They may be brought this client through a marketing agency or they may have them directly. So they will license our platform. It integrates with their print management system or they can enter the information to the dashboard. So they pay us a licensing fee or a right to come to the party. They get the data, they get the entire platform. They then resell it. So, example, if we sell it for $2,500 a year for the license, and then maybe we sell it for six or seven or eight cents per mail piece. Okay. So they pay their $2,500 license fee and they're doing a mailing for someone for 5,000 pieces. We charge them $450. Usually they'll mark it up double. $800, $900. So now if that person's mailing every week or every month, it's a recurring revenue stream for them. So they're getting $1,000 per client with a $500 a month markup for 10 clients. The money adds up pretty quick. It allows that printer to compete with a digital agency because we'll deliver the digital products, the tracking products, the monitoring products, and they retain a customer. And not lose that revenue to an agency. Joe: Because it it allows these businesses to grow into another market and as you said, to preserve that relationship with the client and without having to hire more people, go through the whole learning process and in essence send everything to you. Brad Kugler: And one better, because you know, part of that licensing fee, what that does is it buys you. We're not essentially on your staff as a full-time salesperson, but if they have somebody interested, one of our marketing and sales consultants will pitch that product as if they are their sales engineer. So they get the person on a webinar, our our expert sales team who can do. This the digispe, as you may say, and explain the platform and the benefits. Whereas remember, these guys are legacy guys, they're selling ink on paper. Being able to sell a 15-feature digital campaign, that may be a learning curve for them. We will pitch it for them. So they get them on the phone. One of my team members will pitch it with complete confidence and certainty so they're not fumbling around with it. And that's done as part of the licensing. Joe: If listeners remember only one thing from today's conversation, what do you hope that message is? Brad Kugler: Well, I I'm gonna speak personally rather than try to plug my business. Everyone goes through ups and downs in their entrepreneurial career. Everyone faces barriers. And really, when you're faced with a barrier, you want to keep thinking. You know, it very often when things look bleak, you tend to run away or or pull back. And I was faced with that moment. I could have been like everybody else that was in the D V D industry and now they're they're either working at a Starbucks or they're working somewhere else. I wanted to stay on pr entrepreneurial. I took what I learned from that business and applied it to things to do in my next entrepreneurial iteration. And it's really about persistence, okay, and driving that ball forward. Even if it's only one inch a day, move that ball down the field towards that goalpost. You don't have to hit a home run or to run for a touchdown every time you touch the ball. Just keep moving that ball down the field. Small increments at a time equal big changes over a longer period of time. And that's kind of what I've learned for that. And I like to share that story and hopefully inspire others when things are tough. Joe: Very inspirational. Brett, where can our audience connect with you? Learn more about your work and continue this conversation. Brad Kugler: I think the easiest place is just go to dm20.com. All right. You can you can Google my name, find me on LinkedIn. Above all, I I think a person is only as valuable as he can help others. You know, it's great that I've had some entrepreneurial success and I've had some trials and tribulations. But in in my heart, helping other entrepreneurs or or or talking tech speak and helping give them ideas and motivation. At this point in my career, that's more my passion. And trust me, I I am not one who has made a bundle of money where I can just sit home. I still have to go to work every day and pay my mortgage like everybody else. But I've evolved to a point where I like to share what I've learned. Joe: Thank you so much for joining us today and and sharing your insights and your personal story. It's so inspirational. Brad Kugler: Thank you, Joe, for having me and happy to come back and share more or answer any questions to anybody in the audience. Joe: Thank you. Thanks everyone for listening. If this episode inspired you, share it with someone who needs it. And don't forget to follow the Globizer podcast where we continue these conversations to make an impact. Till the next time.