Bob Massie has identified an even more intriguing market: his own vendor. Massie is founder and CEO of Marketing Informatics, an $11 million provider of soup-to-nuts direct marketing campaigns, based in Indianapolis. The company builds customer lists, designs direct-mail pieces, and prints and dispatches those pieces for businesses and academic clients.
Last year Massie started toying with a new idea. Marketing Informatics buys data on U.S. households from the credit bureau Experian. To make that data useful for clients it has devised an unusual statistical modeling technique that draws on practices from the social sciences. The technique begins with an analysis of the demographic, psychographic, and financial characteristics shared by the population within geographic clusters. It is the inverse of traditional models, which start with a marketer's parameters and then seek out clusters of people with the stipulated characteristics. "We used Experian's data to solve a unique problem for a customer that led us to this new way of thinking," says Massie. "We're refining it to the point where it can be automated and effectively mass produced."
The customer for whom Marketing Informatics devised the system is a mortgage company, but Massie says the technique works for marketers in any industry. Marketing Informatics has a policy of serving only one client in each vertical market, so it could have safely targeted competitors. Rather than address that diffuse audience, however, Massie hit on the plan of selling the technique to Experian, essentially becoming a supplier to his supplier. Experian could then license the model out again. "We're saying, 'Here's a product we're developing from your raw materials," says Massie. "Why not add it to your own cafeteria?"
Experian is interested; it has provided data on 140 million households for Marketing Informatics to work with. Massie's people will soon be feeding it into the new model. "It would put us in partnership with a data giant," says Massie, "and be a significant piece of residual revenue for us."
Outside Assets: You Complete Me
Intellectual asset management isn't only about what you can do for others. It is also about what others can do for you. Just because you don't own the logo or formula or technology your product needs to soar doesn't mean someone won't let you use theirs--particularly if you're not direct competitors. Licensing-in, as Andrew Sherman calls it, is especially attractive when companies are missing just one or two pieces of a larger puzzle.
Jim Kelly knew he didn't possess all the pieces he needed to target the U.S. Hispanic market in 2004. Yes, the company he worked for had the resources and expertise to create suitable products. But its name, Pulaski Furniture, didn't exactly evoke balmy nights at the hacienda. (The name comes from its location: Pulaski, Virginia.) So Kelly hitched Pulaski's wagon to a star--specifically the star of the Univision (NYSE:UVN) television network's best-known personality, Cristina Saralegui. "She's like the Spanish Oprah," says Kelly, who was Pulaski's executive vice president of product development and marketing at the time. (Last year Pulaski merged with Samuel Lawrence Furniture. Kelly now runs a division of that company and is also an owner.) The resulting product line, Casa Cristina, conflates Saralegui's personal taste in décor with styles popular in Spanish-speaking countries.
Casa Cristina, which now produces a fifth of the revenue at Pulaski, wasn't Pulaski's first successful foray into licensing-in. A year earlier the 300-employee company had created a line of Americana bearing the Antiques Roadshow name. "We liked Antiques Roadshow because it's all about discovery and value," says Kelly, who struck a royalty deal with WGBH, the public television station that owns the show. Drawing on a CD with images of 50,000 items featured on the program, Pulaski designed 250 bedroom and dining room pieces. At its peak a few years ago the Roadshow brand represented about 10 percent of the company's revenue.
Most recently Pulaski enlisted an army of plush toys to help it press more aggressively into the youth market. Last year the company launched a line of Build-a-Bear youth bedroom sets, and sales have exceeded the company's most optimistic expectations. "Selling this to retailers was one of the easiest jobs I've had in my life," says Kelly.
Kelly looks for three attributes when evaluating outside brands. They must be widely trusted. They must resonate with Pulaski's products. And they must help the company sell not just in, to retailers, but also through, to consumers. That last requirement means brands that lend themselves to event marketing. When Pulaski launched its Roadshow line, for example, the program's appraisers showed up at dealerships to offer consultations on jewelry. Personal appearances by Saralegui boosted sales on Casa Cristina by 40 percent for some retailers. Next up: Build-a-Bear (NYSE:BBW) events, at which shoppers will visit Pulaski dealers to assemble stuffed toys for themselves or for charity. "A lot of the time we spend talking to the retailer," says Kelly. "With these brands we can talk to the consumer."
