MeritDirect Event Panel Heading Back to the Future, Part 1
In a session during the July 9-10 MeritDirect Business Mailers Co-op in White Plains, N.Y., four B-to-B catalogers and All About ROI On the Web columnist Terry Jukes candidly discussed how they’re going to retool and ready themselves for an economic recovery, all while enduring the current recession.
Jukes, president of e-commerce software provider Ability Commerce, served as moderator, posing questions. In setting the stage, he noted that direct marketers “have to hold the expenditures they make in online to the same standards they made in mail over the past 25 years."
"Specifically,” he advised, “look at not just order dollar acquired, but also lifetime value and profitability of a customer acquired online vs. lifetime value and profitability of a customer acquired through a catalog. If we’ve done anything wrong in the past five years, we’ve been a little overenamored with the sexiness of technology and moved away from the disciplines and measurements of RFM and lifetime value that we’ve learned so well.”
The panelists included Bob Runke, president of Barco Products Co.; Mike Faith, CEO and president of Headsets.com, and a member of the All About ROI editorial advisory board; Neil Sexton, president/COO of Northern Safety; and Dick Nelson, CEO of MARCO Promotional Products. In the interest of keeping our Web articles short, we’ll break this up into multiple parts. So check back here next week for additional installments of this session's recap.
Jukes: How has your business held up this year?
Runke: We had our best year ever in 2007 — grew 26 percent and planned for the same last year. Then the recession showed up, and we had a really bad year. We recognized signs of what was coming in May (2008). I panicked in June, got together with our majority owner and said, "We have to act now," and he kept his ego out of the scenario. So we downsized, eliminating 25 percent of our staff and redid our supporting infrastructure.
We planned for 2009 intelligently. As a result, our revenue will emulate 2006, and we’ll be more profitable than last year. In June , we were 15 percent ahead of our plan.
Sexton: [Northern Safety CEO] Sal Longo has been screaming “recession” since 2006. We were planning big-picture strategies in January  and shifted to complete crisis management. We feel we made surgical strikes. It started with payroll; then we adjusted our legacy system. We have cost-cutting and margin-improvement teams. Our people really stepped up. We’re being hyperefficient. Efficiency has always been important, but never heard as often and loudly as it is now.
Nelson: This will be the first year we’ll have a revenue decline over the year before for any company I’ve been with. We grew 35 percent in 2007 with the same number of people we employed in 2006. We slowed it down a bit in 2008; then ’08 slowed down on its own. Now we’re down 16 percent over last year.
A large part of our customer base — people who hold meetings — are experiencing fewer people going to conferences, so exhibitors aren’t needing as many badges. We’re also seeing people buy down — buying less expensive badges. So we’ve embarked on a no-stone-unturned campaign to maximize opportunities.
Faith: Early in 2008, our response rate decreased. We mailed less. So our sales are 30 percent to 40 percent off. But we’re profitable because we’re pretty lean. Our main market is office headsets, [the sales of which] are dependent on growth in employment. In times of unemployment, we’re expecting to be in the flat range for perhaps another year or two.
Check back next week for more installments of this all-telling session.