Don’t try to get Mo Frechette on the phone during the ten days before Christmas.
That’s the busiest time of the year for the head of mail order operations at Zingerman’s, an Ann Arbor MI-based importer, producer and retailer of specialty foods. Since its founding as a humble delicatessen in 1982, Zingerman’s has grown from a local restaurant to a regional institution, adding not only the mail-order operation but a bakehouse, a creamery producing its own hand-crafted cheeses and gelatos, a full-fledged restaurant-- even a training center to share its expertise in foodservice, merchandising and management with other companies.
And the mail-order division, which Frechette co-founded in 1992 after graduating from the University of Michigan, has kept pace with that growth, to the tune of about 25% annual revenue increase for the division. In that first year, Zingerman’s mail order arm did about $100,000 in sales; this year, it will top $6 million. About 50% of that sales figure will come through in the 10 days before Christmas. “Since it’s food, everyone wants it there at the last minute before the holidays,” Frechette says.
While Zingerman’s takes orders both over the phone and though its large Web site, catalogs are the real key to those phenomenal sales figures. Zingerman’s mails a book every six to eight weeks throughout the year, to a list that hovers around 35,000 names but expands to 75,000 to 100,000 for the holidays beginning in October. The core catalog is 32 pages of art and text, with an additional 16-page wrap section that highlights different themes, gift baskets, seasonal offerings and promotions.
Organic growth is the method of choice for Zingerman’s: Many of its lines of business came about when current deli employees approached owners Paul Saginaw and Ari Weinzweig with ideas for new operations. That was true of the mail-order business too. “The catalog started as just a department of the deli,” Frechette says. “We were getting some national press, people were asking to be put on a mailing list, and we thought, ‘Well, we’ve got all these names—we ought to sell something this way.’”
Inevitably, the early mail-order years were a learning experience in the art of handling lists. “I didn’t know thing one about direct marketing,” Frechette says of his first efforts. “I didn’t segment the list or source code or anything.” The company was mailing as much as it does today, but without targeting the list, they weren’t turning those mailings into sales at anything like an acceptable rate. “We were just throwing money down the drain mailing to our whole list,” Frechette says.
That changed in 2000 when he broke with Zingerman’s tradition and brought in outside help, a small shop called Catalog Solutions. Under the leadership of Tony Cox, the agency taught Frechette and his colleagues how to do mail order right. Zingerman’s Mail Order now segments its list by both recency and frequency of purchase, drilling down on customers who have bought in the last three months, six months and so on.
In addition, Zingerman’s now does occasional postcard drops through the year, sends out new buyer letters to recent customers, and blasts an e-mail newsletter full of foodie news and insights every few months.
And according to Frechette, every mailing produces a sales bump. “Orders on the phone and Web are both totally driven by our mailings,” he says. “I don’t know what it is, but when people get the book in the mail, they tend to order. It’s not always the same customers. We just found that we need to keep mailing to get people’s attention.”
Mailings have become such an important part of marketing strategy for Zingerman’s that the company now buys all the paper it will need at the beginning of every year. “Starting in the summer, we research paper prices and try to figure out where they’re going—then we buy a forest,” Frechette says.
In the beginning, Zingerman’s was content to get its list from customer sign-up sheets in its deli and other operations, and starting in 1998 from its Web site. But for the past three years, on the advice of Catalog Solutions, the company has also experimented with renting lists from co-op databases such as those offered by Abacus. Frechette treated this acquisition move as an experiment at first, taking about 25,000 names from several providers. When some of those names produced sales on the first mailing, he knew it was the right customer acquisition move. Now Zingerman’s rents about 400,000 names from various co-ops.
Frechette also viewed that success as a vindication of the Zingerman’s catalog, which contains no photography, just lots of copy—much of which he writes-- and cartoonish drawings such as you might find in your local weekly free paper. “Consultants were always telling us that our catalog was fine for reaching current customers, but that when we went out to people who didn’t know us, we’d need pretty food shots,” he says. “But my gut told me no, that what we were doing was smart.” Anyone can make any food look good in a photo. But Zingerman’s is selling food that’s different from the usual grocery-store fare—hand-made Vermont butter, farmhouse Cheshire cheese, sherry vinegar aged 50 years—and consumers need to be educated in the reasons to buy, and in what they’re getting.
“You have to give people a story to tell their guests when they put these things on the table,” Frechette says. “You can’t do that with a picture; you have to do it with copy.”
While about 40% of Zingerman’s mail order business comes in through the Web site, Frechette says there’s one marketing channel the company has no interest in at present: search engine marketing. “We’re already growing well enough that we don’t need to try every little whiz-bang method out there,” he says. “We’ve consciously chosen to stick with what we feel are our strengths and to continue to grow that way as long as we can.”
Besides, he adds, search engine marketing might mean hiring more outside help. “We did that once with the catalog consultant and it worked out great,” Frechette says. “But we’re not the kind of place to hire a fulfillment manager who’s worked for multi-million-dollar companies to come in and show us his or her way to do things. We like to grow that kind of knowledge from the inside.”
