Tuesday, March 18, 2008

Direct Marketing Success Story Pt. 4

JDS: How did you first start promoting your company?

Peter: Our early growth was primarily through one client, Hair Club. I realized this was a dangerous position to be in, but the client was demanding, which didn't leave us much time to pursue business development.

Based on the strong growth of Hair Club, the owner decided to sell the company and the new owners thought they could save money by forming an in-house agency, so we lost the business. (The in-house agency was eventually shut down, so I guess it didn't end up saving the company money.) That year we made about $40,000 in profit. I decided to invest all that money in an annual ad campaign in a direct response trade industry journal and I was able to negotiate a favorable rate by pre-paying for the advertising in advance. During that year a new prospect responded to the ad in the trade journal. That client ended up being one of our largest clients and spent a substantial amount of money with us over the next three to four years.

JDS: Was there any big break that really got you off the ground?

Peter: Our big break was the opportunity to take over the Hair Club corporate advertising in 1997, based on our performance for their franchisees. At the time we started working with Hair Club they had stopped advertising, so we started from scratch rebuilding their marketing campaign, starting with radio advertising, then we got them back on national cable TV and finally we helped them develop a successful infomercial campaign. We proved ourselves each step along the way and worked closely with the client helping return the company to profitability.

JDS: What was the toughest time you had in your business, and how did you get through it?

Peter: I would say there were three tough periods. First was the start up phase. During that phase, our head media buyer quit because our key client was too demanding and during that period we had to scramble to cover our overhead. The second tough period was the loss of our biggest account when their company was sold. A third tough period was when one of our largest clients ran into legal problems, which forced us to resign that business. I would say that we were resilient in all those situations and never gave up and continued to work hard for our clients and simultaneously pumped up our business development efforts. As a result, we also were able to replace the business we lost and continued to grow. During these difficult times we also learned an important lesson about diversifying our client base, so that the loss of any one account would not seriously impact our business.

JDS: What do you think was/is the key factor that made YOU successful, when so many others have failed in starting and building a business? Were you just lucky?

Peter: I think it was a combination of factors that contributed to our success, including doing something I really liked, never giving up, providing a quality service, employing talented people and aggressively marketing our DRTV company. Luck played a part in the process, but it can only carry you so far. I believe if you work hard. It puts you in a position to be lucky more often than usual.

JDS: If you had to choose between good luck and good instincts, which would it be?

Peter: I would have to say that good instincts played a bigger role in my success than luck. Different instincts come into play as the company developed, but being able to guide the company through the inevitable ups and downs and having a vision and direction for the company has been crucial to our success.

JDS: When you're making business decisions, are you more likely to go with your head or your gut?

Peter: I try to look at all the facts, solicit input from key members of our management team and then go with my gut in making business decisions.

JDS: When do you do your best thinking?

Peter: I tend to do my best thinking in the morning while working out and on weekends. I'm constantly jotting down notes to myself regarding new ideas or information that I want to pass onto our management team.