Direct Channels Have National Bankers Supply Counting Its Money

Operating in a market specifically designed for handling large sums of money, National Bankers Supply Corp. was faced with one ironic problem: It wasn’t generating enough of its own money. Having acquired the 23-year-old bank supplies catalog company in 1996, President Roy Shields, along with his business partner Steve Perhacs, had their work cut out for them. Consider these hurdles:

* The housefile at the time was well below 1,000 buyers, most were inactive or one-time buyers;

* The catalog hadn’t been reprinted in over six years;

* The philosophy and culture within the company was stale and lacked vision; and

* Not surprising, growth was limited or negligible.
For the first few years, Shields continued to operate at the status quo by mailing to the pre-existing housefile and not searching for prospects — basically, seeing minimal, if any, growth.

Then in 2001, Shields decided it was time to reverse course. He initiated a plan designed to build up the cataloger’s housefile. This signaled a departure from the company’s previous practice of using sales staff to sell its products by phone or visits to clients. He recognized the need to incorporate direct marketing channels to ensure future growth.

“I wanted to bring people to my door,” Shields says, “to get our name and products in front of large masses of people.”
Crucial Upgrade
Upgrading the catalog was essential for future growth, Shields says. The company invested money in such key areas as photography, creative teams and the use of color in its catalog for the first time. The standard mailing quantity was 5,000 catalogs a year when he and Perhacs acquired the company, and it remained at that level throughout the ’90s. Beginning in 2001, National Bankers Supply replaced the dated black-and-white catalog with a color version and began to prospect more aggressively.

“Before that time, the housefile was very limited, and we didn’t do much to grow it,” Shields acknowledges. He sought to expand beyond his traditional clientele (banks), figuring that any business dealing with large amounts of money on a day-to-day basis would have a need for his company’s products. “There are 76,000 restaurants, for example,” he notes.

For starters, National Bankers Supply looked to grow its housefile, seeking out manufacturers, amusement operators, gaming industry operators — any operations that would deal with large sums of cash or coins on a daily basis — and rented their lists.

Also in 2001, company representatives began to attend conventions, putting the company’s name out. “We started a process of seeking a brand,” Shields says. “Now we prospect new markets, such as restaurants, retailers, colleges, churches and municipalities.” On the consumer end, the company also is looking to work with the co-op databases.

Developed in 2002, the company’s Web site, www.banksupplies.com, has been a key factor in the cataloger’s turnaround. When someone visits the site, the company uses Web analytic tools to track those consumers, adding them to its housefile.

Operating in a niche market, knowing who was going to its site was essential, according to Shields. And the strategy has proven effective. Web-based sales have nearly doubled each year from $45,000 in 2002 to nearly $700,000 last year, and approaching $1 million this year.

The site’s popularity has helped to spur other areas of growth as well. The Web site has helped drive the catalog’s success, Shields notes.

“Knowing who goes to your Web site helps you know who to mail to. Web-generated revenue is a window to tell you who’s walking up to your storefront,” he points out. “It allows us the opportunity to locate and test prospects.”

Numbers Keep Rising
This year, National Bankers Supply’s numbers continue to climb:

* Catalog circulation is nearing 750,000;

* A total of nine drops are set for this year;

* The housefile has increased to 22,000; and

* The company plans to have monthly mail drops in hopes of increasing the housefile by 50 percent per year.