A Niche In Time

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In deciding what new divisions to create, Carpel has taken a careful look at Sky Courier's existing business. One thing he noticed was that a growing portion of the business involved specialized deliveries for celebrities, politicians, and executives. Last New Year's Eve, for example, Sky Courier drove a Mexican dinner, prepared in Beverly Hills, across the desert to Wayne Newton's hotel room at Caesars Palace. Then there was a Chicago White Sox baseball player who lost his contact lenses before a game in Oakland, Calif. Sky Courier picked up a new set of lenses at his doctor's office in Crete, Ill., and flew them to Oakland by game time.

So, reasoned Carpel, why not create a business that is tailored to people willing to pay top dollar to get something delivered fast? Such a high-priced butler service -- tentatively dubbed Sky VIP -- is on the drawing board. Carpel plans to attract customers by offering a card inscribed with the prospect's name and a toll-free number that connects with a customer service representative 24 hours a day.

Similarly, Sky Courier is launching a medical delivery division, Sky Med, that will ship human organs and medical supplies. The company plans to send out its first mailing this fall to hospital administrators, doctors, medical-products manufacturers, blood banks, and transplant centers. The division, like VAX, will have its own general manager, sales manager and customer service representatives.

Many of the ideas for new divisions originate with Carpel himself. "Gil is very creative coming up with new flavors," says Glenn Smoak, operations vice-president. Deciding whether a division makes economic sense, however, rests largely with Smoak and Sky Courier's financial vice-president, Neil Moran. They are the ones who ask, "Operationally, are there economies of scale?" and "Should we be in this business at all?"

VAX, for one, fits Sky Courier's existing resources perfectly. To the customer, the subsidiary appears to be a small, independent courier, catering to ad agencies and graphic artists. In fact, the only way that VAX can offer competitive prices is by consolidating its shipments with Sky Courier. The subsidiary also uses Sky Courier's central computer system in Reston and calls on the parent's dispatchers and fleet of drivers whenever necessary. And in New York City, Sky Courier salespeople are now selling VAX's services to many of their corporate customers with in-house graphics departments.

Aside from starting new divisions from scratch, Sky Courier also looks for companies that are already developing or operating related businesses. A case in point is Aeromail Inc. of Westport, Conn., an overseas bulk mailing service, in which Sky Courier became a 50% partner last fall. Aeromail transports its clients' overseas mail to Amsterdam, where the materials are sorted, posted, and forwarded to worldwide destinations. According to James A. Reckert, Aeromail's founder and president, the service allows high-volume mailers -- such as IBM, Chemical Bank, and Texaco -- to slash postal costs and delivery time by up to 50%.

Both companies stood to benefit from the joint venture: Aeromail gave Sky Courier access to a relatively unexploited market and a new customer base, as well as a new product offering that would appeal to many of its existing customers. Sky Courier provided Aeromail with capital and, above all, a marketing arm -- 35 salespeople in 12 U.S. cities -- that it couldn't afford to develop on its own.

Indeed, Sky Courier's sales force continues to represent the company's principal resource in marketing new products and services. It is the single common denominator that ties all the divisions and new ventures together. Recognizing that Carpel and Wolinsky have sunk almost their entire marketing budget into recruiting, training, and compensating the direct sales force -- known in the industry for its aggressiveness.

"We look for people with the killer instinct," says Carpel, who started in the business as a salesman for Air Courier International, a competitor. Fear and greed, he contends, are the best ways to motivate salespeople. "We look for people who say they want to make a million." The company offers heftier commissions -- 5% to 7% -- than most competitors. (Federal Express, for one, pays no commissions.) A salesperson who chalks up $100,000 worth of business a month can join the 100 K Club with special benefits: no reports detailing client calls, an extra percentage point in commissions, and a seat on the Marketing Policy Committee, which reviews new product ideas.

To be sure, Sky Courier uses the stick as well as the carrot. The company issues monthly dollar volume sales reports listing salespeople in order of performance. That way, says Carpel, "those at the bottom will feel as if they're wearing a scarlet letter." In a recent sales contest, the salesperson with the worst results got a black T-shirt printed with the word "Loser."

Not surprisingly, turnover is brisk, but those who survive, says Carpel, outsell the toughest competitors. In selling to major prospects, moreover, they get help. Every division has a sales manager with a track record in that particular business and the tenacity not to take no for an answer. Says Carpel, "If it's a big enough deal, we'll bring along a closer with the regular salesperson -- just to make sure nobody slips out the back door."

Sky Courier will count on that aggressiveness as it continues to look for new markets to enter. One service under investigation, for instance, is low-cost tele-conferencing -- a product not generally found among a courier company's offerings. But Carpel says he and Wolinsky refuse to get trapped by defining their business too narrowly: "We are in the communications business. If we looked at ourselves as air freight shippers, we'd put ourselves in a little box for all eternity."

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