MeritDirect Event Panel Heading Back to the Future, Part 3

Hopefully, you’ve been keeping up with our coverage of a no-holds-barred, all-telling session during MeritDirect’s recent Business Mailers Co-op in White Plains, N.Y., in which four B-to-B mailers discussed how they’re surviving the current economic malaise and their plans for emerging from it once the economy turns around.

In part 1 of this recap last week, we detailed how they’re holding up. In part 2, they discussed how they’re preparing for better times ahead.

Here are further key details from that session, led by moderator Terry Jukes, president of e-commerce software provider Ability Commerce and All About ROI On the Web columnist.

The panelists included Bob Runke, president of Barco Products Co.; Mike Faith, CEO/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.

Q: With retailing being so down this year, what opportunities [as B-to-B catalogers] do you see?

Sexton: We have no plans of getting into any vacated retail stores. But it’s an interesting notion that maybe people who used to get their stuff at point A now could get it from point B. We’re interested in increasing our touches.

Runke: I'd never make a run at a brick-and-mortar facility. We’re looking at how we can maintain margins. The types of products we sell are commercial in nature, but they’re expensive. The retail market doesn’t react well to that.

We have a segment of orders that come in from consumers, but not that much. We have better discussions with our suppliers to find out what their true capabilities are, and specifically aimed at commercial clients. There's some demand for something less than good at a cheaper price point than retail can react to. But we’re going to be a two- or three-channel marketer, with the catalog driving the bus. And outbound telemarketing can work for that.

Nelson: We don’t compete against retail, but we do against field salespeople. The promotional products industry is $15 billion to $16 billion, and I’d guess that 85 percent of that is done through field sales. We feel field salespeople are having a tougher go at it. We’ve always swam upstream against the tide of those traditional field sales, and I understand that the direct marketing side of the business is holding up better.

Faith: Staples, Office Depot and OfficeMax all take a percentage of the headsets market. Reps in stores will actually refer people to us. Some office supplies retailers that reduce the number of store locations and staff on the floor … they help us.

Q: What’s working particularly well for you online?

Sexton: Our thrust email campaigns top our list. We’re trying to meet somewhere in the middle for our website being highly promotional vs. highly informational.

Nelson: We’ve made progress in pure online acquisition and have put a lot of effort into it. Every time we turn around, something new is going on, making the customer experience better. We’ve been very active in blasting emails to customers, having gone from one a week to two a week, and saw no drop-off or any increase in opt-outs.

The larger the order, the more the risk and the more likely someone wants to hear a person on the phone so they know they can get their order by a specific day. We played around with pop-up chat on our site, because even if they chat with us we have a chance to build better value customers.

Q: How do you plan to get through the next 12 months to 18 months?

Sexton: By spending as little money as possible on things that'll still generate revenue. We’ll continue to operate wildly efficiently.

Faith: We’ll wait for the time we think is right, then roll the dice to market.

Nelson: We’ll be as open and candid about business as we can because “we can’t do it without sharing with you.”

Runke: We’ll conserve some cash so we have something going into the recovery. Now is the time to be really nimble on circulation plans. We adjust circ plans monthly.

Q: Do you see any difference in the ordering patterns between your discretionary demand products vs. nondiscretionary demand?

Faith: I’d love to think that headsets are mandatory products. But they’re very discretionary. That’s why in the 2000 recession, we came out early. We think pent-up demand will come.

Sexton: We’re fortunate that our customers need our stuff, but we’re finding they’re buying less of it. If you have fewer people working in your factory, you buy fewer gloves.