Whatever Works: Where Product is King
John Peterman ran some ads for a cowboy duster and built the $70 million J. Peterman catalog business. Mel and Patricia Zeigler discovered a cache of surplus French army shirts, ran small ads and parlayed them into Banana Republic. Ditto Lillian Vernon with personalized women’s belts and handbags.
For Larry Brown, it was … uh … a toe-straightener for six-toed feet.
Brown, 55, started out as a rookie in the Great Old Days of mail order, and has a repertoire of wild and colorful stories to prove it. He says he never chose the mail order business. The mail order business chose him—by way of his mother.
“A kid from the Bronx” who wondered why anyone would waste time in school when they could be making money, he got his first job at age 11, lifting air conditioners for a distributor near his home. He was paid the lordly sum of 25 cents a day.
After leaving the army in the late 1960s, he says, “I went to the garment center where all Bronx Jews go when they don’t know what else to do.” Eventually he finished school, cleaned up his act, and put on a tie to become an account executive at Burlington Industries on Madison Avenue. Where he slowly began to go mad from boredom.
He told his mother he was thinking of quitting Burlington to “bum around” for a couple of years until he figured out what he really wanted to do. “Not a smart thing to say,” Brown remembers. “In those days you didn’t tell a Jewish mother you wanted to be a bum—unless you spelled it ‘doctor’ or ‘lawyer.’ So after getting ‘the look,’ I agreed to go see my big brother Steve, for some sensible career advice.
“Steve was seven years older, and my exact opposite,” Brown recalls. “He was an idea man who liked to hang out in libraries and bookstores. I was a street kid who liked to hang out at the schoolyard and poolroom.”
But mother was to be obeyed, so Larry went to see Steve at his broken-down warehouse on Long Island. While there, he had a life-changing epiphany.
Steve Brown, along with Victor Schiff—another mail-order alumnus from the old days—had just launched a new company called Cheeselovers International. It was the early ‘70s. The gourmet wave was just breaking in America, and Cheeselovers had caught it, by providing exotic foreign cheese and other food delicacies to a new generation of aspiring sophisticates.
This was long before the dawn of today’s block-long supermarkets, with their elaborate cheese and gourmet departments. Back then most people had never heard of cheeses like Brie and Jarlsberg, let alone tasted them. So Steve Brown set out to titillate their taste buds and inflate their self-esteem by traveling to France, England, Italy, and even South America and Japan in search of marketable product.
However, to build Cheeselovers, Steve had stretched himself dangerously thin. He not only had to come up with the cheeses, he also had to photograph them, write the promotional copy, design the direct mail packages, lay out the cheese catalogs, and even paste up the mechanicals (no computer graphics in those days). Then, as company spokesman “Gerard Paul” (his nom de fromage), he had to don a tall white toque and fly to hotels, motels, convention centers, churches and school auditoriums around the country to publicize the new venture with hundreds of cheese and wine tastings.
No wonder Steve saw little brother Larry’s arrival as a godsend. Eager to sign him up, he took Larry on a guided tour—a proud proprietor showing off the hottest new mail order company in the country. But for Larry, it was one big yawn—until, at the end of the tour, they walked into a room containing 100 post office trays, each filled with 1,000 envelopes, and each being opened by a phalanx of ladies who were busily extracting cash and checks from each. Thousands of envelopes filled with money—what was going on?
This was Thursday, Steve explained. He had run ads the prior Sunday in TV Guide and Parade, and this was the first batch of orders. How much had he spent for the ads? Larry wanted to know. “Actually, they haven’t been paid for yet.”
“Let me get this straight,” Larry said. “This is money from people you haven’t given anything to, right? And you haven’t paid for the ad either, right? And you don’t pay for the product until afterwards?”
Larry scratched his head and wondered why everyone wasn’t doing this. The garment trade was on a six-month shipping cycle, and it took up to 90 days to collect, while Steve had 100,000 cash customers after just four days.
“All cash and checks,” Larry recalls. “And this was long before credit cards. I wanted in.”
Morty and Joel
During his visit to Long Island, Larry met Steve’s two partners, Morty Williams and Joel Jacobs. The pair owned a low-end mail order company called Jay Norris—at the time, one of the largest buyers of space advertising in the United States. It was a huge business that was run like a candy store, with the partners holding strategy meetings in a booth at the local diner and jotting down contracts for tens of thousands of dollars on paper napkins. Everything was done with a handshake, and nothing happened in the business without one of the partners knowing about it.
Originally, it was thought Larry should work with Steve, but instead, Williams and Jacobs “kidnapped” Larry to work at Jay Norris, where he spent the next seven years as an apprentice, learning the mail-order business and off-the-page advertising from two legends in the industry.
“Through sheer luck,” Brown says, “I became an expert—not in just one aspect of mail order—but in virtually every aspect. Space, copy, list selection, merchandising, foreign imports, fulfillment, customer service, returns. It was a great training ground. I got 20 years of knowledge in seven years.”
The partners opened a Canadian branch of the company and invited Brown in as a partner. He left Jay Norris and, working out of his home, was responsible for merchandising and copy. He found he liked working at his own pace, and the job enabled him to focus on the areas he enjoyed most.
The First Catalog
The Canadian company was sold after a year, and for a short while, Brown was unemployed. Then one of Jay Norris’ merchandise suppliers, Len Feldman, devised the idea for a healthcare catalog and invited Brown to join him.
From his warehouse and offices near the Brooklyn docks, he was supplying many products in that field and knew the foibles of older people and the ways they deal with pain, skin problems, sore feet—the gamut of ills that plague senior citizens. At the time, only Sears had a healthcare catalog and, in Larry’s words, “By page 3 you were nauseous, what with pictures of a guy with tubes in his nose and somebody else in a wheelchair.”
Several obstacles had to be overcome. Feldman was a major supplier of health-related products to the low-end catalogers of the era—Sunset House, Foster & Gallagher and Spencer Gifts, as well as the giant Hanover House family of catalogs. The partners went to the four catalogers and announced their plan to start a healthcare title with the promise that they’d make available any successful items on a wholesale basis. This was a win-win proposition. Hanover President Harold Schwartz warned the fledgling entrepreneurs that no lists were available, as these were the days before sophisticated list segmentation. The solution was to build lists using space advertising.
Their philosophy was simple: They’d show products that people didn’t know existed and make them want the items. These were not products found in Wal-Mart, Kmart or the local drug store. Rather, the catalog would offer products to accomplish something that was immediately obvious from the headline and the illustration. “If the prospect has to read the copy to find out what a product does,” Brown says, “you’ve lost the sale.”
The people depicted in the catalog would look well—not sick. Those with sore backs would not be bent over in pain, but walking upright and smiling—the result of ordering a product. And the approach would be whimsical and fun to read.
What to name the catalog was a question. Feldman was a chiropractor, so they called it Dr. Leonard’s. Leonard was a common name in the Midwest, and they figured many of their customers would be older folks from that region and would be more comfortable with the name than, say, Dr. Larry.
The Great Toe-straightener
The partners didn’t have a lot of money with which to buy space ads to launch a catalog. Parade magazine was too pricey, so they settled on its lower-end competitor, Family Weekly, a Sunday supplement that ran in several hundred newspapers nationwide. The cost of the ad would be $1,500.
What to advertise was the next question. “I’m not a fan of catalog request ads,” Brown says. “I want orders.” So they tested a toe-straightener for people with hammer toes—roughly 25 percent of the population. Photography wouldn’t work, so a drawing was commissioned. When their employees saw the drawing and the ad Larry had written and designed, they said, “You can’t run that!” The foot depicted in the ad had six toes.
“That’s when Len and I knew we had to run it,” Brown said. “Ads have to capture immediate attention and this one certainly did.”
The ad ran on a Sunday, and by the following Wednesday it had generated $5,000 in cash. Total revenue from the ad was $30,000—a huge success 25 years ago. A version of it still runs in the current Dr. Leonard’s catalog.
The subsequent run on product sent the partners scurrying to Connecticut to beg the manufacturer for more. When the vendor saw the ad, he burst out laughing at the six-toed foot. But he produced more product, and the ad ran everywhere; in Parade where a $5,000 investment brought in eight times that amount in revenue, in free-standing inserts —anywhere that low-end products sold.
It’s a given that if an ad is working, you don’t monkey around with it, so for years the foot had six toes. In a few months, the partners had acquired 200,000 customers and enclosed a Dr. Leonard’s catalog in every shipment of the toe-straighteners. Money started rolling in.
Brown put a humorous slant on his copy, and all the models were 10 years younger than the target audience. “Nobody wants to see a guy with back pain in tears,” Brown says. “They want to see a happy guy with no brace and a smile.”
In short order, the company became very profitable, with a return on investment that exceeded that of many Fortune 500 companies, and profits of 13 to 14 percent.
The partners were four guys who loved one another, loved doing their own thing and had no interest in going public. But eventually, one of them retired. And Brown, who had had it with the healthcare business, asked himself: “What can I say new about commodes that I haven’t said before? Or how can you be funny about people with hammer toes?”
In short, after 15 years of working under harrowing deadlines and pressures, Brown was burned out. Dr. Leonard’s was sold to a venture capital group, and after investing his money in a software company, Brown spent two years learning golf and traveling with his family.
Brown soon lost interest in passive investments, and grew bored. His partners invited him to rejoin their company—and run one of its top money-making divisions: Professional Products, a company that sold merchandise to other catalogers at wholesale prices.
Brown certainly missed the camaraderie, the work and, last but certainly not least, the money. In fact, it dawned on Brown that the only money he ever made in his life was on 20th Street in Brooklyn with Feldman and Bob Notine (who runs the manufacturing divisions), and John Vayianos, vice president of sales for Professional Footcare.
Starting with the toe-straightener, the partners acquired and designed/manufactured some footcare products. The leader in the field was—and is—Dr. Scholl’s.
“The retail footcare business never really grew,” Brown says. “There’s no romance in footcare. It’s one of those necessary things.”
It’s the philosophy of Brown and his partners to find a niche—a line of useful, different products needed by everyone and that can be marketed with panache and flair. Could the partners go into the footcare business? They decided they could, if they developed a series of products that didn’t compete directly with Dr. Scholl’s—adjuncts that were more clever and had secondary usage. This included products such as orthotics, arch/heel supports, a Gel Donut heel pad, bottom-of-the-foot cushions and specialty insoles.
“I think we brought new life and pizazz to a tired segment,” says Brown. As a result, the ProFoot product line currently is second in revenue to Dr. Scholl’s and is sold by mass merchants, drug chains and pharmacies worldwide.
The Joy of Discovery
Brown loves dealing with products—the joy of discovering an unusual, useful item at a trade show, contracting for it with the vendor and going back to Brooklyn to create the catalog presentation.
Four years after the sale of Dr. Leonard’s, the partners discovered they missed the catalog business— with Brown missing it most of all. They knew what they were doing, and with their philosophy of low overhead and good margins, understood how to make a profit. At a hardware show in Chicago, they saw numerous exhibits of pesticides, cleaning products and outdoor merchandise. They decided this was a niche in which they could sell products that everyone needs—pest control, and problem solvers for homes and gardens.
Finding items that were different and that could be presented with humor and style was easy. Brown considers himself slightly off center—someone who looks at a cup of coffee and sees a Grecian urn. What’s more, few catalogs were in competition for this market. For example, New Pig specializes in the business-to-business arena.
The partners had no doubt that such a catalog would fill a need, but, as with the startup of Dr. Leonard’s, the problem was what to call the book. An associate, Margaret Hickey, piped in and said, “All these products work. Why not call it ‘Whatever Works.’”
As Brown suggests, the title of the catalog helps them concentrate on coming up with core products. Among their best sellers: Spider Fighter, Deer Repellent, Squirrel Pouches and Bird Barriers. Other items that aren’t easily found at retail: mole chasers, silverfish and slug eliminators, animal traps, a plastic mat with spikes that keeps pets off the furniture, gutter and leaf cleaners, termite killers, and a bat house that encourages a bat colony to live nearby and kill up to 48,000 insects a day.
Because nobody likes to look at four pages of bottles and two pages of spray cans—and because Brown loves color and design—he added decorative items to pretty up the book. Among the hot-selling decorative SKUs: fake, lightweight boulders for the garden; original Miami pink flamingos; an owl statue with movable head to keep birds away; and fake lawn edging that looks like hand-laid flagstone and shale.
When asked why he didn’t allocate more space to the bestsellers rather than giving them about the same square-inch amount as everything else, Brown says: “A good item can’t be hidden. And you can’t make a bad item better. If you give a marginal item a new look with new copy and design, response can be improved by 10 percent, but you can’t take a stiff and turn it into a gem.”
When asked about catalog design, Brown offers the following wisdom:
The cover is not a pretty face or a mood thing. I make it readable and show products in a colorful and humorous way with the page numbers so the reader can get around the book. Sometimes for my own ego I put myself on the cover, but only when I can make myself look silly. I don’t take myself too seriously. On page two, I always have some bestsellers, a photo of me, as well as a personal letter. It’s important that someone who writes a check should know who is getting the check ... .
In terms of finding names, the launch of Whatever Works was far more difficult than Dr. Leonard’s. “Healthcare appeals to everybody across the board,” Brown says. “Whatever Works was designed to go to a slightly upscale homeowner or renter who would buy the product and then have to do something with it, for example, set a trap, spray bushes or put edging on the lawn.”
Although renting cold names is horrendously expensive for a catalog, Brown created space ads for specific products (e.g., Spider Fighter and Squirrel Pouches). He believes that anyone who ordered those products would be a candidate for his catalog.
It took a while for other catalogers to realize that Whatever Works was not a threat, and that it would be in their interest to agree to list rentals and exchanges. As a result, Brown now has exchange arrangements with many other catalogers in the same marketplace. If an item proves itself successful in Whatever Works, Brown wholesales it to other catalogers.
One unique aspect of the Whatever Works catalog is its seasonality. Since this is not a gift book, he doesn’t mail from October through early January. As a result, he wasn’t badly scarred by the Sept. 11 tragedy (which, by the way, he watched live from his vantage point on the Brooklyn waterfront). Although entirely aimed at the suburban and rural market, many of his catalogs go to addresses on Madison Avenue, North Michigan Avenue and Sunset Boulevard; a fair portion of his customers have second homes with yards.
In terms of response, Whatever Works gets half its orders by phone and another 10 percent via the Internet. The warehouse is remarkably small and efficient, with all orders printed in pick sequence, enabling the company to get 5,000 to 6,000 orders out in a day.
The partners preside over five businesses comprised of a group of brick buildings cluttered with merchandise, raw materials and a fascinating collection of Rube Goldberg machines that manufacture and package product for their various businesses (e.g., holiday decorations for Las Vegas hotels and department stores, footcare products for the retail trade and a slew of proprietary items that are wholesaled to other catalogers).
What’s more, if a client asks for a product, the company often can design and manufacture it and have 22,000 pieces out the door in two weeks. “We’re TOADs: We can Turn On A Dime,” explains Brown.
What shines through is the fun these people have coming up with new ideas, making profits and playing off one another. They really love what they do, and they love one another. And the joy is not confined to the partners. About half of the 100 employees have been with them for more than 20 years. Indeed, Whatever Works and its associated companies truly are one big happy family. Denny Hatch, contributing editor, consultant and freelance copywriter, is the author of the books “Method Marketing” and “2,239 Tested Secrets for Direct Marketing Success.” He can be reached at www.methodmarketing.com or firstname.lastname@example.org.
WHATEVER WORKS LIST
Total buyers: 138,744
Last 6-month buyers: 26,601
Credit-card buyers: 66,442
Average unit of sale: $67
List Manager: Venture Direct. Contact, Tracey Bausano (212) 655-5196, and Sharlene Palmgren (212) 655-5175