Doing your ads and promotions in-house can also energize your salespeople, according to Pat Kelly, chief executive of Physician Sales & Service (PSS), in Jacksonville, Fla. Kelly says his $86-million company has been doing its own advertising and promotion since 1983. "We've interviewed agencies now and then in the past," he says, "but we think we're doing a better job already than what they propose."
PSS, which distributes medical products and supplies to doctors, produces sales-promotion material -- primarily brochures -- on a regular basis. In that effort every one of its 28 branch sales managers and three regional sales managers works with the company's creative team on a rotating basis over the course of a year. Says Kelly: "It not only saves a lot of money, but we get a good 'buy in' from our people. If you develop the sales program, then you feel responsible for making it work."
Last year the company launched a national sales promotion. The program was to last a year, with the best performers winning a trip to Europe. The promotion required the design of brochures, monthly performance statements, and other assorted materials. Kelly had two ad agencies bid on the project. Both bids came in at around $30,000 -- and that didn't include promotional giveaways, which would have cost another $10,000. That was too high.
He convened a team of his three regional managers and two managers from the corporate office to figure out what the campaign should look like and what it would cost if done internally. In one day of brainstorming the concept was agreed upon and laid out. The work was farmed out to a local printer, who did the design work and printing. The total cost, including promotional giveaways, came to $11,000.
Were the considerable savings worth it? The goal of the sales campaign was to have 200 units of a $10,000 piece of medical equipment sold during 1990. Kelly expected that if that goal was reached, 18 people would go on the trip. "We sold 343 units, and we ended up carrying 60 people to Europe," he recalls. "Everyone bought in."
Technological advances -- especially desktop publishing -- have allowed even the smallest companies to bring design and typesetting in-house. That's a particular boon for catalog companies, which now can make last-minute changes that would take days on the outside. It gives companies both control and flexibility. "When you're dependent on harvests," says president Shepherd Ogden of The Cook's Garden, in Londonderry, Vt., "it's nice to be able to make quick switches." Ogden and his wife, Ellen, run a mail-order seed and gardening-supply business, which started with a garden stand in the early 1980s and went full-time, with a homegrown catalog, in 1988.
The Ogdens write all the material for The Cook's Garden catalog (now 80 pages), its laid-back press releases, its direct-mail pieces, and its seed-package inserts.
"I would never farm any of this out," says Shepherd Ogden, who calculates that the savings from just one year's typesetting bill have paid for the desktop-publishing system. The company, with revenues of less than $500,000, uses about $10,000 worth of equipment, including IBM-compatible PCs and laptops. The catalog's black-and-white woodcut illustrations are easily incorporated into the layout, using a $500 scanner.
"Doing the catalog is the part we enjoy," Ogden says. "If I were to hire out anything, it would be packing and shipping."
Recent technology has also allowed the Ogdens to target specific zip codes in their catalog mailings. It is the sort of thing that just a few years ago a small company couldn't afford to do, but inexpensive software packages are now available -- the Ogdens use Zip Data from Melissa Data, which costs about $100.
Some companies have experimented with outsiders over the years but keep finding out they do all aspects of their advertising and promotion better themselves. That's the conclusion of Tom Lisicki, president of Stash Tea, in Tigard, Ore. Stash processes and blends teas, which it then sells through catalogs and in grocery stores, restaurants, cafeterias, and health-food stores. Lisicki has tried an outside catalog-fulfillment house, an outside advertising agency, and an outside catalog-production service.
Going counter to conventional catalog wisdom, Stash has even built its own mailing list. That's too expensive, the experts say. To find out who buys through mail order, you rent lists. Period.
Reaching established catalog consumers, however, is one thing; finding the true enthusiasts of your product is quite another, as Stash Tea knows well.
The company has developed a mailing list of 150,000 hard-core tea drinkers. More than 30,000 are now Stash customers -- that's a 20% return rate. A few years ago, just for fun, the company rented a list of "certified" mail-order buyers. It got the normal response rate: 2%.
In Stash's first 10 years, supermarkets wouldn't give the tea company the time of day. Then it placed a small advertisement for a catalog on the back of its foil tea wrapper, which itself was designed in-house. Thousands of letters began pouring in. (A recent one begins, "Greetings and salutations from China! I am surrounded by tea and yet there is nothing to equal your products.")
"Basically, we developed this list of qualified leads at no cost to us," says Lisicki. "We were getting a 6% to 8% response rate just by sending the catalogs out." But then Stash went one better; three years ago the company began including a personal note with each catalog. An on-line database of the letters and sophisticated querying capabilities made the task fairly easy. The response rate jumped to 20% to 30%.
Armed with a printout of people clamoring for its tea, Stash has pushed its way into 2,000 stores in the past five years. During that time, the company has been profitable: the mail-order business has quadrupled; retail sales have tripled.
The 19-year-old company's do-it-yourself approach has won two Gold Echo awards -- the direct-marketing equivalent of the Oscars.
