Fast Track Interview

Adrian Bye: For those that don’t know anything about Joe Sugarman, BluBlockers and other things you’ve done, please tell us a little bit about who you are and what you’ve accomplished in direct marketing and business.

Joe Sugarman: I started in the military – actually I started in high school. I was a photographer and also had a column in the newspaper and got bored with it and decided to start my own magazine. That was my first venture into publishing. Then, in college I couldn’t pay for my tuition or expenses at the University of Miami, so I’d write ads for local businesses and was so successful that soon I had an ad agency. Instead of getting paid I got clothes, food or other type gifts and ended up the best-dressed, best-fed guy on campus and that little business worked out pretty nice.

Three and a half years into attaining my electrical engineering degree the Army drafted me. In basic training they gave the company of 2,000 a test and I was the only one that got 100. They pulled me out of the company and said, “Look it, you’re eligible for being in military intelligence.” So I decided to do that and learned how to be a military intelligence operative. They sent me to Germany where they taught me to speak fluent German with practically no accent.

Incidentally, later in life I appeared on German television selling BluBlocker Sunglasses in German, so I did finally make use of that language besides military intelligence. Anyway that was one of the most interesting times in my life for about three years. Then some people wanted me to sell ski lifts in the United States. A friend who was a civil engineer and I went back to the US and formed a ski lift company and I did the advertising and marketing and my partner did the sales and installation. I decided to go into advertising and did a lot of political candidates in the Chicago area, and did fairly well.

Adrian Bye: Direct response plays a big role in the political campaigns. Would you say it that is the best place to look at direct response and is politics the most competitive arena, more than financial stuff?

Joe Sugarman: I think it’s one of the arenas. In political campaigns you want name recognition and to get a few points across and you don’t want it to be too complicated. But it’s not any different than any other form of advertising, other than the fact you try to get across a picture of the individual and their name so that people recognize them and know who they are. Eighty five percent of my candidates won but 50 percent eventually went to jail, but that was Chicago politics and wasn’t my fault.

Adrian Bye: Right.

Joe Sugarman: Anyway, we did that for a while and then one day, a very fateful day; I was looking through Business Week and saw an article about a pocket calculator that had just been developed by a company called Bomar (ph) in Massachusetts. I read that article, cut it out and said, “This would be a great product for one of my clients in the electronics business.” The client said, “Who the hell would pay $240.00 for a thing that added, subtracted, multiplied and divided? I don’t think this product’s worth anything.”

I thought about it and decided, “…this product is good, and I’m going to go for it.” So I contacted the manufacturer and borrowed about $12,000.00 from friends, relatives, people who knew me and supported me. After contacting the company, I came up with a direct mail letter, flyer, envelope and an order form package and sent it out to about 50,000 prospects. The mailing failed, I lost half the money. But, every mailing had a different code on the order form and we saw eight of the lists were not successful but two of them were very successful. And just as an aside, these were the two lists added at the last minute. So you never know.

Adrian Bye: So in this case you weren’t actually testing the copy, you were testing just the lists against your copy?

Joe Sugarman: Well yeah, I had the one message and ten different lists to send that message to. The list sent to the Chairman or Chief Executive officers turned out best. I went back to my investors and said, “Look, stay in, we’re going to do a mailing just to this one list.” Craig Corporation, the company selling the calculator, decided to lower the price to $180.00 and I sent out the mailing and it did fabulously well. Then I took that same copy, redesigned it for a print ad on the back page of the Wall Street Journal that just buried me with orders. We did very well with that calculator, and started getting into electronic products, digital watches, and became very successful in running these products.

Adrian Bye: What volume of calculators were you moving?

Joe Sugarman: Oh, I would say in the thousands, several thousand. They were $180.00 and that amounted to a lot of money and then eventually the prices started to drop.

Adrian Bye: This is 36 years ago, isn’t it?

Joe Sugarman: Yeah. Now, something very interesting took place in 1973. Many times I would get calls on the telephone from people who would say something like, “We’re in desperate need of a pocket calculator” or “I’m going on a trip and don’t have time to wait to send in the order form, could you please send me one? I’ll give you my credit card number, just sign my name.” Well, I accepted these orders over the telephone and nobody ever ripped me off. So, I got a toll-free number, set it up in the basement of my home and ran this ad in the Wall Street Journal’s smallest edition. From that morning until late in the evening we were getting phone call after phone call after phone call. That was the start of the use of the toll-free number. We did this for about a year before everybody caught on, and about that time catalogues took off too, because with toll-free numbers people could very easily order from catalogues; fulfillment centers blossomed as a result. So that one very successful test we did, eventually created not only an industry in direct marketing but also inspired the growth of catalogues, and the growth of many ancillary businesses.

Adrian Bye: So your breakthrough was allowing consumers to place credit card orders without having a signed charge form?

Joe Sugarman: That’s right.

Adrian Bye: Did you get any problems from the credit card companies?

Joe Sugarman: No, no trouble. They realized there was a lot of potential in direct marketing and that if done right, they were going to benefit as well, so they never complained to us.

Adrian Bye: So the risk was on you if customers complained but because they didn’t it was okay?

Joe Sugarman: Oh, yeah, and the customers of course didn’t complain, and…eventually you did have a few bad credit cards and you had a little bit of fraud but it was very minor. It expanded our business. We were running ads not just in the Wall Street Journal but in every magazine we could get our hands on and we did exceptionally well.

Then, one day I was driving down the 405 Expressway in Los Angeles. It was a real bright day and the friend taking me to see a new electronic product handed me a pair of sunglasses. I put them on and said, “Wow! Everything seems so sharp and clear and yet so bright.” My friend explained the glasses were from a friend of his who made them for NASA, but the guy was going bankrupt because they were too expensive. Once back in Chicago, I was doing a catalogue for United Airlines and one of the products dropped out. I had to fill it with something, called my friend and said, “Please, please, send me that pair of sunglasses.”

He agreed but warned I would not be able to get them from the manufacturer.” I say, “Well, I’ll get them from the Far East–I’ll get them somewhere I just need a product.” He sends me the product, I wrote an ad in a couple of hours, put it in that catalogue and then arranged to get product shipped from the Far East so that we would have inventory. After the first couple of weeks I couldn’t believe the sunglasses out pulled all the other products completely. I called them BluBlocker and with the capability we had of rolling out nationally in all the magazines said, “I’m going to create my own brand.” And so, I advertised everywhere. I spent a million dollars on print advertising over about a seven-month period and sold 100,000 pairs.

About the same time they began to allow half-hour infomercials and I thought it would be a great opportunity to sell a pair of my sunglasses. This was 1986. I produced the first show and it ran and in one month we sold 100,000 pairs. I ran a total of 13 infomercials for a variety of products but four of them were for BluBlocker Sunglasses over a six-year period. At the end of that period we were shipping about 300,000 pairs a month and did that for several months, so we had a very successful program.

Then we took the product to Walgreens Drug Stores. They had maybe 3,000 stores at the time and were burned by somebody who had presented a knockoff of our BluBlockers to them. They’d bought 30,000 pair of them and were stuck with them and were really very cautious about taking on our product. But they did and within a day and a half they were sold out, they were absolutely blown away. We had to ship by Fed Express; we had to ship all over the country to their warehouses so that they could keep up with the demand. And, something similar happened with QVC.

We’re still at retail and it’s been 15 years and actually 21 years since we started. We’re still with Walgreens and we’re still with QVC and for QVC that’s a real unusual feat, to be on with a single product, a single brand for 15 years

Adrian Bye: Let’s say you’ve got your successful product and its working online, how do you take that to another medium like TV?

Joe Sugarman: Yeah. Okay, well here’s my approach to everything I do actually. I always test in print to get across all the concepts. Now testing on the Internet is pretty well tantamount to testing in print, I mean you are in a sense testing and it is a good way to test. If you’ve tested it on the Internet you should pretty well know if you’ve got a winner and I certainly would try TV.

Adrian Bye: So how do you try TV? Where do you start?

Joe Sugarman: You basically go to the media buying agencies that specialize in buying infomercial time. They’ll tell you, for example, that you should spend about $20,000.00 testing to really get some good numbers to determine whether or not you’ve got a saleable product or a good infomercial. And so you test with $20,000.00 and if it’s successful you don’t go out and spend a million dollars, you take it to the next level, you go and instead of spending 20 you spend maybe 100 if you feel pretty confident.

And the reason for that is you never bet the farm. Too many people – and this is really, really good advice – too many people have gotten such success with $20,000.00 that they blow caution to the wind and they spend a million and then what happens, maybe a 9/11 takes place or some dramatic event and then they lose everything. So it’s always best to ramp up and it’s always best to play with the money that you’ve already earned as opposed to the money that you’re using to possibly pay the mortgage on your house.

Adrian Bye: Would it be correct to say that you do more QVC than infomercials today?

Joe Sugarman: Oh, yeah. I actually stopped doing infomercials, although I’m tempted to get back into that as well, but we do primarily QVC for our television. Occasionally we run spot commercials for certain products to test them but primarily it’s QVC. Walgreens is our drug chain here in the US and practically every city, and we’ve more or less created a franchise for both QVC and Walgreens.

Adrian Bye: All right. Any closing advice you’d like to give to any of the entrepreneurs reading?

Joe Sugarman: Actually a couple of things. One is that you should do what you really enjoy. If you’re really enjoying what you’re doing you’ll be successful. And the second thing is never give up, never give up.

Joe Sugarman: If you’re interested in learning a little bit more about what I’ve talked about there’s a book that I’ve written for Ad Week, called The Ad Week Copywriting Handbook. It’s available on Amazon.com under my name and I think it’s like $14.00, it’s very inexpensive. It is really a good value and Amazon.com is where to get it.

Adrian Bye: And actually I could add that your books on mail order, TV advertising and advertising copywriting are outstanding. I’d judge those books as some of the best books I’ve read.

Joe Sugarman: Thank you. If you’re interested in TV I suggest you get my book, “TV Secrets for Marketing Success” in which I talk about spot commercial, infomercials—all those things you really need to get on TV. It’s also available on Amazon.com as well.

Adrian Bye: Joe, Thank you very much for this fascinating interview.