This interview is with Brian Kurtz from Boardroom. Brian has been around direct response marketing longer than most people, and his company has been highly successful at it. Some key points of the interview: Hear from one of the leaders of a $100M offline direct marketing company. Learn how Boardroom uses its newsletter to create highly profitable backend products. Discover how Boardroom tests and optimizes its copy to improve performance.
Full Interview Audio and Transcript
Hobbies and Interests: Baseball umpiring; writing and speaking.
Favourite Sports Teams: New York Jets, Rutgers University.
- The Fountainhead by Ayn Rand
- The Alchemist by Paulo Coelho
- Secrets of Successful Direct Mail by Richard V. Benson
Favourite Entrepreneurs: Martin Edelston, Gene Schwartz, Joe Sugarman.
Company Website: http://www.boardroom.com/
Adrian Bye: Brian, tell us a little bit about the guy behind the Bronx accent.
Brian Kurtz: I’ve been at this company for 26 years. It was my second job out of college. I was the film critic for my school paper at Rutgers University in New Jersey and an English major. I had no idea I was going into marketing. I certainly was a personable guy but thought I’d be an editor or a writer or something. I wanted to get a job in a publishing company, and the job that came available happened to be at this little company called Boardroom that published newsletters and books. They don’t take advertising, but they had in-house list management which is the first job that I had here.
It was a fascinating first job, because learning direct marketing from the list side of things is a fantastic education. It is learning from those you’re going to market to, as opposed to being just an idea guy or just someone who sits in brainstorming meetings and figures out what’s a good or bad idea. You learn to figure out where the markets are, what the demand is in those markets, and then find products that people want, as opposed to finding products that impress you. So it was an interesting early part of my career, in the list management business and I really got my feet wet in a way that gives me a very unique perspective.
Adrian Bye: Can you tell us a little bit about how big Boardroom was back then and how big it is now?
Brian Kurtz: The day Reagan was shot was my first day at Boardroom in ‘81. At that time there were probably about 30-35 employees. We might have been doing about 5 million in revenue, maybe 8 million, I don’t know; I don’t really remember the exact number.
The first newsletter, Boardroom Reports, published back in 1971 was about 10 years old when I got here. It was a business newsletter geared to the executive learning to run their business. Marty Edelston, who started the company, had spent ten years previous to starting Boardroom as the business manager of Commentary Magazine. He was frustrated as a reader of business magazines because none of them really told how to run a business. They had feature stories about IBM and what’s happening in AT&T, but Fortune, Forbes, Business Week and the Wall Street Journal didn’t give the information about how to run a business. He was a voracious reader of business books however and that’s where all the ideas were – so he launched Boardroom Reports in ’71 as a kind of digest of all the best business thinking from the best experts & the best books. He did a series of different business books with various people met over the years, some about tax subjects, some about business subjects, none of them that big.
When I got to Boardroom in the early ’80s we had just started our second newsletter called Bottom Line Personal. It was Boardroom Reports for the “personal side of the executive”. And at the same time, we had a big selling a book called the “Book of Business Knowledge.” And that book really was the precursor to what the business became, since “Book of Business Knowledge” was basically Boardroom Reports’ greatest hits. Taking some of the best stuff from the newsletters, putting it into a big, hardbound book and selling it for $30 proved to be a model that was fantastic, because some people didn’t always want to be committed to a subscription newsletter, and but they would buy books.
The work of repurposing editorial is in everybody’s lexicon in the Internet world today, but back in 1980, ’79; Marty understood repurposing was just a way of life. You have this great content and some people want it in a subscription format and some people want it in books. “The Book of Business Knowledge” sold over 100,000 copies through direct mail only, and a model was born with that success. When Bottom Line Personal became our second big newsletter, the same model held true. A book was developed shortly after called the “Book of Inside Information,” comprised of Bottom Line’s greatest hits. That book ended up selling over 3 million copies in direct mail.
Adrian Bye: Was the breakthrough to take content considered best, and then republish that as a book?
Brian Kurtz: That’s correct. And we also had other books at the time, too. We hired an author, for instance, to do a fantastic book on estate planning. But the “greatest hits books” were generally the best sellers. Now we had developed a database, with a file of a few hundred thousand names. We could pick out the raisins in the cake and say, “You know what? These are executives, these are high income individuals. You know, if we could sell 30 or 40,000 copies of an estate planning book, we’ve got ourselves a business there, too.”
So we did an estate planning book and we did a tax planning book. We were able to spin off more vertical subjects that were not going to sell as much as “Book of Inside Information” and “Book of Business Knowledge,” but we were certainly going to be able to mail to the same audience. A book business was born out of the horizontal nature of the “Book of Inside Information” and greatest hits from the newsletters, and developing a more vertical book business that made perfect sense.
Adrian Bye: How did you distribute the books?
Brian Kurtz: Almost exclusively through direct mail. We were totally committed to direct mail at the time as the source to be able to get to what we call critical mass. There was no way we’d be able to sell the quantity of books like I just told you, through space advertising. There was no way we were going to do it through TV, because we didn’t have the funds to do that, plus there was no model out there that said that this was going to work for TV.
We created what I would call state-of-the-art direct mail that was interesting, which is probably the other early secret to our success. We didn’t just do formulaic, order card & brochure letters, but created a whole technique. I call it fascinations, but a lot of people call it other things. Our editorial was all about useful information. The newsletters were useful tidbits for either your business life or personal life. We created direct mail copy about those tidbits using fascinations, and then referenced to a page number where you would find the answer to that fascination. To be able to sell the kinds of volumes in direct mail for one-shot books at the time, I won’t say was unprecedented, but the numbers were astounding.
Adrian Bye: You have subscribers on the newsletter and are out there acquiring lists, mailing to them, and using the lists in that way. You then use the same acquired knowledge of those lists to sell the books, is that correct?
Brian Kurtz: Oh yes. Anything we did to sell our newsletters in direct mail, we used a lot of the same techniques to sell books. Different buyers, but selling books through direct mail and newsletters through direct mail; there was certainly a lot of overlap in the techniques that we used, yes.
Adrian Bye: And what kind of size now is Boardroom Reports or Boardroom, Inc.?
Brian Kurtz: Well, it’s really Boardroom, Incorporated. Boardroom Reports doesn’t even exist anymore as a newsletter. As I said, after Bottom Line Personal, Tax Hotline launched. And then after that we launched a health newsletter called Health Confidential which became Bottom Line Health many years later. Fast forward and health became our biggest category. Bottom Line Personal is still our biggest newsletter but overall as a category, the heath category is by far our biggest.
We’ve done upwards of over $100 million in revenues. Some years, between 70 million and 100 million, depending on how much we nail and which products are hot. We’re numbers-oriented, but not in terms of looking to just brag about what our revenues are. We’re a traditional direct marketer and every time we do a promotion it has to pay out and everything is measurable. So there is nothing we do that won’t pay out. If it doesn’t pay out we stop doing it, as opposed to general advertisers who don’t play that same game.
Adrian Bye: What would be some URLs that we can look at?
Brian Kurtz: Bottomlinesecrets.com is our website. There you can subscribe to either of our two e-letters. One is called Daily Health News and the other is called Bottom Line Secrets. Both are free, so anybody can subscribe. Also on that website we have a store with all of our products, information on the company and a variety of customer service things. We’re building an archive now that will either be paid or membership. But, basically our online business has been more focused on e-mail marketing as opposed to website marketing.
Adrian Bye: And how are you driving traffic to build up those lists?
Brian Kurtz: There are a lot of ways to do it. We do try to get as many e-mail addresses as we can from people in direct mail. We have offers on the Internet, we have various affiliate deals where we’ll offer free subscriptions, and pay a bounty for every e-mail address we can get for a new e-mail subscriber. We have a program where existing customers, who we have e-mail addresses for, get the opportunity to subscribe to the free newsletters. Even though they’re an offline customer we try to convert them to online customers.
Adrian Bye: I know that your expertise is in list management and in acquiring new customers. How do you go about looking for a new list? Where do you start? How do you test it? How do you know it works?
Brian Kurtz: The first ten years of my career I would consider myself a list expert, but I’m not as directly involved in the list business as I was, and frankly, the list business has changed a lot in terms of quality names that are available. With postage increases and the cost of direct mail only going up, most mailers who used to have 100,000 new names a month now have 50,000 new names a month. That changes everything, because it’s a volume-driven business from a profit standpoint for the list brokers and managers.
It is important to understand what the right list is for your product and that requires a lot of research. And, looking at the promotion piece that got the name onto the list is probably the single biggest thing that will tell you if it’s a fit for your product and even more important is to look at the control package.
Adrian Bye: Are you suggesting this to be more important than other predictors such as demographics?
Brian Kurtz: When we look at list selection it’s a package deal. I developed a worksheet back when I was doing list selection as more of my full-time job that asks a ton of different questions. If someone recommended a list to me, I would ask all of these questions. So I can say that one thing is more than another, but I will say that the promotion that got the name is as important as any one single thing in many, many cases. But I think the point that I’d like to make is that it’s really a snapshot. See, there are no unique names, there are only unique lists.
Adrian Bye: When you’re making a test, what are the elements that you guys aim to test first, that have the big impact?
Brian Kurtz: That’s a good question. In our early days of doing direct mail, if you read some of the classic direct mail books, they’ll tell you you have a sales letter, you change it from white to blue, or you change the envelope from white to blue, and you can get a 58 percent lift. And I’m not saying that those people were lying, but frankly with the cost of direct mail as it is today I’m not making that test any more. I mean maybe I did at one time.
Adrian Bye: So what are the five or ten things you care about testing now?
Brian Kurtz: Headlines, covers, outer envelopes, price, offer, premiums and more timely copy. Timeliness is a tough thing to test, because when gas prices were going through the roof and you do a cover that talks about gas prices and it stays the control for a year, who knows where gas prices are going to be in a year? On the other hand, a lot of mailers like to do the timeliness stuff and it is certainly worth testing.
The biggest breakthroughs you normally get, too, is working with the best copywriters in the world or in the country. Big breakthroughs come through the hands of a great copywriter, looking at that control, and understanding what they have to do to beat it and coming up with a completely new approach.
Adrian Bye: So you find an A-plus copywriter. Where would we find one of those guys, and then how much would we pay someone like that?
Brian Kurtz: Well, most of them won’t work for new clients too quickly because of what they expect to be paid. Probably one of the best copywriters of all time was Gary Bencivenga and he would charge anywhere from $30, $40, $50,000 upfront. Then he would get a mailing royalty that a lot of those writers get which is upwards of $50 per thousand or 5 cents per piece mailed, That’s on the highest end, but there are writers who are up and coming who might charge less than that and are really good.
Adrian Bye: The front-end, as I understand it, would be your newsletters which people pay a monthly fee to receive. Would it be possible to talk a little bit about some of the back-ends that are behind those newsletters?
Brian Kurtz: At the back-end of the newsletters, the biggest thing is renewals. The beauty of any subscription business is if the editorial is good and fun. My mentor, Dick Benson, had a saying that took us marketers off the hook. “Editors sell renewals, marketers don’t.” In our business, because we don’t have advertising, to move our renewal point one or two points, it’s make or break sometimes, and a lot of that is the editorial product.
Adrian Bye: Anything you want to add in closing?
Brian Kurtz: I think it’s easier to get sloppy on the Internet because everything is so cheap to do, you won’t lose a lot of money. But you’re certainly going to waste a lot of time and clutter up peoples’ inboxes. There’s another theory in direct mail. I don’t know if this is true in online because I haven’t explored it enough. But, it says every time you send something to someone you may reduce the response to something else. It’s a concept in direct mail called contact strategy.
Do we ever get there in direct marketing in a perfect sequence? Absolutely not. If any direct marketer tells you they know how to do that, they’re full of it. But, if you give somebody a great offer at a great price, I don’t care how much you’ve tried to sell them before you can still sell them something else. But I do believe that there are optimal contact strategies that can be employed that can maximize income in the shortest amount of time.
And, there are a lot of models. We do lifetime value models all the time of our customers on our database. I can’t say that they are 100 percent accurate, but I do know that they’re actionable, because we test them against each other. There is a lot of good stuff out there and it’s only going to get better. There’s going to be more data, more technology, and more ability. But people are still people and human behavior is still human behavior.
One of the best books that I would ever recommend is a book written in 1966 that we reprinted called “Breakthrough Advertising” by Gene Schwartz. It’s a book that’s about human behavior, and that hasn’t changed.
Adrian Bye: It is one of my all-time favorite books as well, particularly the chapters on the sophistication of markets. Well, thank you.
Brian Kurtz: All right, great. Thanks, Adrian.