A Chat with August’s Profile, Chris Harris, director, direct response marketing, Becker Group Direct

Catalog Success: Where’s the company headquartered?
Chris Harris: It’s in Baltimore, Maryland.

CS: What’s your customer demographic?
CH: It’s a B-to-B client, which is primarily indoor malls, interior designers, the hospitality industry and retail chains.

CS: What’s the primary merchandise offered in the catalog?
CH: We sell commercial-grade holiday and theme décor. If you’re decorating an indoor mall or storefront, you’re going to want to buy around Christmas time or Easter or any holiday … you’re going to want to buy our theme décor products.

CS: Do you strictly sell to businesses?
CH: No, we do sell B-to-C. But certainly the customer expectations, or the buying expectations, change dramatically. We deal with a higher volume order when dealing with the business clients. And we’re just, while we could probably handle a much more significant B-to-C client base from a fulfillment standpoint, we’re really not geared towards that. And our product tends to be a little more expensive because it’s commercial grade.

CS: When was the company founded? Did it mail catalogs right away?
CH: The company was founded, I think it’s 1953. It’s a very interesting story. A fellow started the business, Gordon Becker, hence the name Becker Group, and he actually founded it to help put himself through school — make some extra money on the side. And what he was doing was he was dressing up as Santa Claus and being hired by kind of local merchants and retailers around Christmas time. And he’s a very outgoing, personable guy, and he did very well as Santa. And they said, “Gordon, you’re fantastic, do you have some friends? Can we hire more Santas from you?” So he started hiring more Santas. And then next thing you know they were saying, “Gordon, can you start building a little scene around Santa?”
It just so happened that the indoor mall industry was kind of growing up and taking off at the same time. So Gordon was kind of in the right place at the right time. And he was very good at what he did so he built this whole business. Essentially, kind of the whole indoor mall holiday décor industry built up around Gordon Becker.
The indoor malls that you go to where there’s a Santa Claus probably has its lineage going back to Gordon Becker in some way. What happened was the indoor malls would start buying a Santa set and then it would become a winter wonderland, decorating the entire mall, and then they would say the next year, “Gordon, we love your stuff, the problem is when we were storing it we kind of broke some of the ornaments or the lights, or we need more of them.”
That’s where the catalog side started. It started off as kind of a replenishment division or department. It kept growing and growing and then, because there are a limited number of indoor malls, they started saying, “OK, we need to bring someone in who is a direct marketing professional to take us from being a kind of a replenishment division into becoming a direct marketing division.” And that’s when I came in, which was at the end of 2005.

CS: Did Gordon begin the business in Baltimore?
CH: Initially, 50-plus years ago it was just right around Baltimore. Now it’s international. We have outfits in Brazil, believe it or not, we have contacts … you’ll see our work in Europe, in Dubai, at one point we were in Japan. So it’s pretty significant.

CS: Is Gordon still involved with the company?
CH: He’s still as kind of gregarious and wonderful as he always has been. He’s with the company, although the company was sold not too long ago. While he’s still very active, he has a slightly different role than he used to have. I know that he’d probably think of himself as being very active day-to-day, and I think that he is. He’s flying all around. In fact, he’s trying to help, we also have an office in Mexico, he’s really been instrumental in trying to build. And he’s all over the place. The guy has got tremendous amount of energy and he’s really something else.
We’ve been making a transition towards becoming an experiential marketing company. And what that means is, so we’re hired by entertainment firms, by still the indoor mall developers as well as they have bought outdoors and these lifestyle centers, we’re hired by brands to conceptualize, design, build and deliver these phenomenal interactive exhibits. So while we started our roots, we’ve always been an experiential marketing company. While our roots were in the holiday décor space, we’ve continued to branch out. Now we’re helping to launch movies, promote them through these great interactive exhibits. That’s creating an experience for our clients, consumers if you will.

CS: Is the majority of your business done in the fourth quarter?
CH: Certainly our holiday décor business is still very seasonal. But we have so much other business now that it’s pretty consistent. It’s a very robust business.

CS: How many SKUs on average are offered in the catalog?
CH: Probably about 1,000-plus SKUs.

CS: How many times is the catalog mailed per year?
CH: We’re mailing it at a minimum of four times a year, and it’s all based on our target audience’s transactional data — when they have shown a predisposition to actually buy seasonal products. It’s slightly different than the rest of the business because the rest of the business … for major projects you’re buying earlier, because it takes longer to build these huge interactive exhibits. Thus the decision-making process from our consumers, or clients, is later in the season, probably after Labor Day. Though it’s amazing. We have people buying holiday décor all throughout the year. In fact, I have to brag about my sales team, because they’re just fantastic. To be able to get all of their clients on the same page, sort of remind them that they need to buy their stuff early.

CS: You have your own in-house sales reps?
CH: Yes.

CS: What’s the catalog’s circulation?
CH: I have to be guarded, but I will say that it’s extremely significant for our space.

CS: What are the annual sales for Becker Group Direct?
CH: [Not able to provide exact figure.] We are definitely a leader in our space.

CS: What’s the breakdown of sales by channel? Has the online channel been trending upward?
CH: Absolutely. When I was brought in we were really just a catalog or replenishment division or department. One of the reasons why I was brought in, and I emphasize, was the idea of creating an integrated multichannel marketing division, with our major hub being the Web site. So we’ve put a lot of time and effort in developing and designing a pretty robust Web site, which over the past two years has come to fruition and we’re seeing, it’s very misleading because when you start from zero any growth, any figure is going to be significant. What I can say is that we’re probably about, for the first time being really active, anywhere between 15 percent to 30 percent of our total sales coming from online.

CS: Do you have a matchback process in place to determine if those online buyers are being mailed catalogs as well?
CH: We’re working on trying to do that as much as possible, too. I think we’re going to have a good amount of success with that this year. The key is to be able to build this from the ground up the right way. So you’re taking into consideration all these ways to measure which channels are working, which aren’t. And I think we’ve done a pretty good job in doing that so far.

CS: How many employees work for the company?
CH: I think we’re at about 80-plus.

CS: Do you hire seasonal workers?
CH: Yeah. And that’s growing considerably, too.

CS: What was your background before joining the Becker Group in 2005? Were you involved in the catalog industry?
CH: I had been. I’ve had a fairly interesting background, but it’s always been, I think, around direct marketing or direct response marketing. I actually started off coming out of college working in TV up in New York for the USA Network — working on a live TV show and producing with them, having some success, I mean actually some pretty good success. A great show. Not the most high-brow show in the world, but it was definitely very entertaining and we had really good ratings.
I learned a lot about how important it was to be able to identify who your target audience is, and be able to capture their attention and hold it in a time and a place, and a channel, that’s so competitive and where peoples’ attention spans are so limited.
Prior to that I had been working and going to school down in Washington, D.C., where I had come up with a business concept. I actually wrote a business plan and built this company that I founded right after I left USA Network, to be the distributor of the finest men’s and women’s apparel and accessories through the mail and through being online. We had really good success, a phenomenal experience. I’m very proud of myself. I was very young, and I really had a balance of about $50 to my name when I started off. And we built it up to, we were doing over $5 million in sales and we were juggling over 10,000 SKUs. We were doing quite well. I think we were mailing over two million catalogs at the time.
Although I have to admit, it’s a little embarrassing but at the same time it’s very candid, I made some errors on how and where I outsourced my fulfillment for my warehousing and for all my products. This was a big mistake.
I outsourced; we outgrew our fulfillment services for our regional fulfillment services because we were growing so rapidly. We went with a new company that promised us kind of a turnkey solution for inbound telesales, as well as the fulfillment. Frankly, I was a little young. I was in my late 20s and I was so idealistic and excited, very much the catalyst for the business as we were growing and building this thing. Because I was inexperienced I OK’d some moves for us to go with this fulfillment company, because I was the president and CEO. Which is a bad mistake. They weren’t a good match … they weren’t very ethical.
Essentially, once we got our product down there, they wanted to renegotiate the deal. And they kind of held us hostage because we were seasonal in a sense. We were mailing catalogs and everything and going online and they forced us to renegotiate, or were trying to, the contract. And consequently, they weren’t doing their work. So it had a ripple effect. In the end, after kind of battling through this for six months to a year, we decided that unfortunately a lot of goodwill had been hurt with our customers. It impacted our relationships with our vendors negatively and it hurt our cash flow a lot. So to rebuild, and keep in mind I started this with $50 and we were pushing ourselves as hard as possible to expand, it was devastating to us. So frankly, we decided that we had to shut down.
Next to the passing of my father, this was the hardest thing that I’d ever dealt with. And probably the saddest, because I’d gone out as a young man and raised money to build this business. It wasn’t as if I’d raised money from a tremendous number of sophisticated investors. I had a lot of small investors who believed in me as a person. And we were doing so well and everyone was so excited, when we lost it I felt like I had really let them down. Now I’m blessed to say that I’m in touch with, if not all of them, most of them still. And they understood, but we were all kind of disappointed in how we could make a decision in good faith and it just didn’t work out.
From that lesson I recognized and learned that I could put together, from a marketing standpoint, the bells and whistles, putting together deals, the greatest catalog and Web site … we were very advanced for the time. We were young guys starting this business and going online, using digital photography, actually having our vendors pay us to be in the catalog. We had a fantastic business model. But what I learned that was more important than anything else was that you have to have the back end of your business really, really well-thought through. What I mean by that is the operations and fulfillment side. Because you could be getting a million orders, but if you can’t fulfill those orders properly and timely and in an efficient manner, then you’re going to lose your business or your business will never grow. And I’ve seen it time and time again in my career. But nothing hit home like this, with my own experience with my own business.
So as a cataloger or a direct marketer, I’d encourage anybody to really be constantly taking a hard look at the back end of their business — developing a corporate culture where everybody sees themselves as being part of the sales and marketing team. What I mean by that is, literally everybody in your company can be a touchpoint. So the people picking and packing and shipping your products are handling one of the most important steps in the whole selling process. And they’re representing a touchpoint, because that package when it arrives has to not only arrive in a timely fashion, but look good. And make the person, the consumer who purchased this product, spent their hard-earned money, took the time to research and invest in you in a sense, make them feel good that they made a good decision by going with you. And you’ll continue to get them as a consumer and customer, and they’ll spread good word about you, good information about you. I’d really focus on that as a major point in any successful direct marketing enterprise.

CS: What factors have made the Becker Group a success?
CH: Certainly as a company it’s been very customer-centric. And Gordon, the founder, is just a really spectacular person. People, consumers, customers develop a relationship with us and most of the time we get it right. And when we have hiccups, then we work very hard to make sure that it’s right. People remember that. And since it’s such a timely business, or it had been, and still is because of production schedules and everything, to feel that you have a trusting partner in such a significant endeavor is really important. So that’s one of the reasons why we’ve been so successful. And frankly, it comes right from Gordon.
There’s also just the ability to push the creative boundaries and always be feeling fresh and come up with new concepts. And Gordon and the company have managed to do that as well.

CS: Getting back to your personal experience of the company you founded, what was the company name?
CH: It was Graham Harris Trading Company.
As an international business, what I did after the company, I went back to business school. Because one thing also that I learned was that as a cataloger and a direct marketer and a business owner, I had very good instincts and was good at what I did. But there were real holes in my skill sets, primarily because I hadn’t been formally trained. So I had gone through the school of hard knocks, if you will, and had learned a lot, a tremendous amount, through trial and error. But I felt as if I could take a whole another leap forward in my career and my ability to do a great job if I went back to business school.
So I went to an international business school called Thunderbird out in Arizona, and it’s the number one international management program in the country, and probably like top five in the world. So I went back and had an incredible experience, I mean a really incredible experience. The population of the student body at that time, and it probably still is, was 60 percent, 70 percent foreign. It was an intense amount of work to do, but I did it and really excelled and had an incredible experience. In fact, I was able to live and study overseas for a while. Also, while I was at Thunderbird, my colleagues from overseas kind of kept giving me a tough time, joking around with me, saying that we Americans think of ourselves as being very advanced. But in one respect we’re not. And that’s from the most cutting edge or the latest direct marketing or direct response marketing channel — the mobile space.
So I started researching that and what that means is through the text messaging platform on your cell phone, there’s this whole new medium that’s developed. So I started looking for an opportunity to work in mobile marketing coming out of school and was able to hook on with an Austrian-based global applications firm that had designed and built over 500 mobile applications in Europe. They were launching the North American operations for it and I happened to be appealing to them because of not only my direct marketing background but also my business school background. So they hired me to help launch the North American operations. In fact, I was kind of the No. 2 guy, well, I think we were kind of 1 and 1a or whatever, but there was an American who was in Austria who then came back to the U.S. to help launch this.
For about two or three years we had some pretty good success, but we also had some challenges because the mobile space has not, or had not at that point, really we were very cutting edge, almost ahead of our time. It wasn’t until the end of 2002 where the carriers allowed for intercarrier text messaging. So if you were Sprint and I was Verizon or AT&T, we wouldn’t necessarily be able to text message each other. That’s got its flaws. But we were right there at the right time and we were trying to take a European business model and bring it to the U.S. And we did some pretty cool things, like helping to introduce being able to pay for your metered parking on the street through your mobile phone, being able to pay for vending, your sodas or whatever out of vending machines, with your mobile phone, came up with sweepstakes and weather reports and traffic reports. Some of the coolest stuff. Whatever you can dream up, we were able to do because this knowledge is transferable over from Austria. I’m very proud to say we were working on something called mobile coupons, which is really something that will take effect and will have a dramatic impact on the direct marketing space in the future.
But we were living up in the New York area, my wife and I, and while the business was going well, I got an offer with Becker Group down here in Baltimore. My wife’s family is originally from this area, and we have a daughter, and it was just a good match and a good opportunity because they wanted me. Becker Group wanted me to come in and take this kind of replenishment division and take it a whole different level, turn it into a direct marketing division. And the quality of life and cost of living is so much better, in my opinion, in this area than necessarily up in New York. New York is wonderful, but it’s also very expensive. So we wanted to offer our daughter, and if we’re blessed with more children, the best opportunity for a great future. So we took this opportunity and it’s been a great experience and I feel very proud about what we’ve been doing.

CS: What was the name of the mobile company?
CH: It’s called 3united Mobile Solutions.

CS: What do you enjoy most about the catalog/multichannel industry?
CH: I was actually a political science major, I went to George Washington University in D.C. And one of the things that attracted me to political science and to Washington, D.C. was the idea of being able to understand what moved people. We have such an incredible country and we live in such a really fantastic world, so many different types of unique and interesting people, that I kind of wanted to figure out as best I could what made people tick. And political science is one of those disciplines where you’re kind of forced to segment and understand people. What drives them, based on their demographics, based on their psychographics. All these various variables.
To me it was a logical transition into direct marketing or direct response. Because you know, it’s fascinating. And the skill sets are transferable, because, frankly, a good direct marketer can go from selling B-to-B and also do B-to-C, and selling different products, because you’re taking a lot of the same skill sets. Now of course there are different elements to B-to-B and to B-to-C and any products that you’re selling, but there’s something good about that. And it can be very formulaic and it can be a situation where if you get it right, get the formula right, you can enjoy tremendous growth.
You also can enjoy considerable growth because you’re using the laws of probability to your advantage. Once you’re understanding the formula of what your particular business or niche does and does well, by targeting your audience properly, you can put out in the marketplace enough information to get a very positive response back.
What I’m getting at is in typical sales, where you’re a salesman knocking on the door, there’s a limited number of people that you can actually see and meet and greet and develop a relationship with in any particular day. In direct marketing, you can meet thousands in a particular day, tens of thousands, millions if need be. And one of the challenges, and one of the things that I enjoy, is identifying and then developing those kind of relationships, and developing a corporate culture within whatever I’m doing where we actually enjoy interacting and conversing and helping solve the problems of our customers, our clients. It’s very gratifying.

CS: What’s the biggest current challenge facing catalogers?
CH: Well, certainly from a printing standpoint, cost of paper and postage is a big problem.

CS: Have you done anything in particular at Becker Group to offset these rising costs?
CH: Fortunately with the Web site I can drive a lot of business towards my Web site. And then working on all these variable marketing campaigns, so that I’m actually sending to our clients and prospects, through a variety of different channels, personalized messages to go buy from our Web site.
And frankly, I’m concerned about the issue of taxes and the government getting too involved in trying to regulate and tax the direct response industry, from online sales to cataloging.

CS: In particular, what’s transpired in New York and the possibility of more states following New York’s lead?
CH: Oh yeah, I think so. Also, keep in mind that to place that kind of burden on a large business is problematic. But one of the great things about the direct marketing space and catalogers and Web sites is there aren’t as many barriers to entry. You can be a small guy, and when I say a “small” guy, a few people with a limited amount of resources, and build up a business and have some success with it. When you have to start collecting and worrying about all the various taxes and kind of keeping up with all of the various states’ regulations and taxes, you have to hire additional people and personnel. And it becomes almost as problematic and time-consuming to keep up with that kind of information as it does just actually producing these channels, and producing a product to sell. And consequently, it’ll push out and hurt growth from an entrepreneurial standpoint.
That’s a very dangerous thing for any government to do — to put a cap on or punish entrepreneurs. It’s the entrepreneurs who are constantly reinventing our economy and reinventing the way we do business. That’s why you have such a turnover every decade in the Fortune 500. You have the big companies that essentially get so big and they lose touch with their consumers. And you have these little guys come along and build and build and build. All of a sudden they become mid-size businesses and then huge businesses. And they take the place of these old, massive companies.
It helps because they’ve understood how to customize and personalize the relationship with their particular consumers or clients, and deliver a product to the marketplace in a timely, cost-friendly way. By punishing the direct marketing space, where there’s so much entrepreneurship that takes place, so much innovation and out-of-the-box thinking, you can really have a negative impact. But I don’t believe that the folks who are writing this legislation that that’s really much of a concern to them.

CS: Going back to the rising costs associated with mailing a catalog, have any specific steps been taken at Becker Group to try and reduce costs?
CH: We have, but frankly, my printers have been very flexible with me right now. So I’ll invest a little bit more money to continue to maintain the quality that I have. And we’ve got a good enough relationship where they’re [printers] working with me on price, as well. We haven’t had to change too much at the moment.
One of the things we’re doing for savings is we’re trying to do a lot of the letter shop work, meaning our data mining and organization, before ever getting to our printers and to their in-house letter shop. So that’s a way for us to save money.

CS: What do you think you would have done with your career if you hadn’t gotten involved in the catalog/multichannel industry?
CH: It’s kind of one of those questions where if you’re regretting what you’re doing, then you’ve given it a lot of thought. But I haven’t regretted it so I haven’t given it much thought. You know what I wish though, and I think it’s something that we as an industry should pursue, and that is trying to take direct marketing onto college campuses — teaching the disciplines of direct marketing in formal education. Having gotten an MBA and having gotten a good undergrad degree, there really is very little, if any, kind of direct marketing education out there. I speak with a certain amount of knowledge on this topic. You have to kind of learn it on your own. I think we could legitimize our industry even better if there was a bigger push towards creating a curriculum for direct marketing.

CS: Have you had any mentors in the business over the course of your career?
CH: Would it be shocking to you if I said no. Honestly, I literally taught myself everything. And I ask a lot of questions. I’m inquisitive and kind of intellectually restless. I’m always searching for new ways to do things. I’ve learned a lot from various printers over the years, and graphic designers, photographers and from list brokers. But it’s really been taking a little bit here, a little bit there … trying to figure out what that right formula is for what I’m trying to do. It’s really an imperfect process from a career standpoint.
If I’d gone into business school and gone into finance, for example, there would have been a much more clear career track. And I would have been involved with people who say, “OK, to get from here to the next level, or whatever, you should try to accomplish this, this and this.” With direct marketing, there is no real program. And that’s one of the things I like about it. But that’s why I was speaking so passionately about protecting the entrepreneur, because that’s one of the things that makes the United States so unique — we have a culture of entrepreneurship. And we don’t want to kill or hurt that. It’s what gives us such a competitive advantage throughout the world. And the United States, we’re able to reinvent ourselves constantly while the rest of the world has a hard time doing that. That’s why we continue to be as successful as we are.

CS: What factors will be vital to the Becker Group’s success in future years?
CH: There are multiple facets to the Becker Group business and I just happen to be in charge of one of them, which is the direct marketing side. I feel like increasing our online presence is really critical, and continuing to refine and upgrade our fulfillment side. The back end of the business is important.

CS: What hobbies do you have outside of work?
CH: Primarily my focus at this point in my life is my wife and my daughter. I used to be a pretty decent athlete, playing baseball and soccer, but I just don’t have a lot of time to do that anymore. What I’ve been trying to do is getting into running and running some short races as well as half-marathon or two, which is very therapeutic. It’s very good. I’m not very good at it, but it’s a wonderful accomplishment. In fact, I think it’s really a wonderful metaphor for life. For me, there’s some things in life that come easier than others. And there are a lot of things that aren’t necessarily easy. Running a half-marathon, or running a race no matter how long it is, certainly for me, is not something that is a natural thing or a very easy thing. So to pace myself, to figure out how to get from a starting point to the finish point is a challenge. And it’s a wonderful physical challenge, but it’s a mental challenge. I think it’s a great kind of lesson for life and a great lesson in business. I question whether or not I’m going to be running too much longer, but that’s what I’m doing right now. It’s something that I’ve learned and enjoy.