Bob Kestnbaum, fresh out of the Navy, was the new kid at the Bell & Howell marketing department in 1959 when he was given an impossible assignment.
Someone at a cocktail party had persuaded Chuck Percy that the firm could sell $150 movie outfits by mail. The project was dumped on Kestnbaum's boss Max Sroge. And Kestnbaum, a Harvard Business School graduate without a clear idea of what he wanted to do, became a key player in a major syndicated mail order program.
“It was a landmark program because it was the first time any expensive product had been sold in really large quantity by mail,” said Kestnbaum, in an interview in Chicago in March 2001. “Up to then, mail order was a real low-class way of doing business.”
But Kestnbaum, who died last November at age 70 after a 40-year career as a consultant, had a big hand in changing that image. With his wife and partner Kate, and with partners like the late fulfillment guru Stanley Fenvessy, he elevated direct marketing and made hundreds of millions of dollars for clients ranging from Stuart McGuire to American Express.
Take Hewlett-Packard, which visited him in 1971 or so. HP had him sign a non-disclosure agreement, dropped a mock-up of a pocket-size calculator on his desk, and asked: “Can we sell this thing for $300 by mail?”
Kestnbaum thought they could, but first he did some analysis. “They were trying to sell it to scientists and engineers, and we found out that the real users were businesspeople. So we repositioned the calculator and reintroduced it to the business market.”
Then there was American Express, which ended up with a nine-figure merchandise business thanks to Kate and Kestie (as she called him). They pulled an extract of the firm's customer data and analyzed card activity, moving beyond RFM.
“George Cullahan was responsible for codifying [RFM] at Alden's in the 1930s without benefit of a computer or anything,” Kestnbaum said. “But you began to realize there's a fourth thing that's important, and that's what people bought. So I rechristened that ‘FRAC’ — frequency, recency, amount and category.”
There was a problem, though: “Bob Stone did an interview with me for Ad Age, and he got the last consonant wrong, and he called it FRAT. So it's known by some people as FRAT and some people as FRAC.”
Kestnbaum was an avuncular man who delivered analysis and criticism in a non-threatening way. Those of us who were lucky to spend time with him have had our educations permanently interrupted.
