DIRECT MAIL HOLDINGS — Addressing Client Needs

Focusing on customers and providing one-stop service hardly qualify as revolutionary marketing philosophies. They are about as fresh and original as the covers of hit songs performed by American Idol contestants. In both cases, proper execution is what makes the difference between falling flat and ending on a high note.

Building on its base in Mount Pleasant, IA, the top management of Direct Mail Holdings is pursuing that straightforward business proposition. It's positioning the organization as a one-stop shop for direct marketers across the United States and is seeking to exploit the latest digital technology in order to help customers target names better with unique, personalized campaigns that boost response rates.

For good measure, President Randy Seberg adds, "Our vision is to deliver direct mail pieces from image file to mailing within 24 hours."

Group Effort

Six companies currently constitute the organization's holdings. The founding piece is Alaniz LLC, which was started by Salvador Alaniz as a printer of dry-gum return address labels and later expanded into mailing. In 1998, the family sold the business to management and Direct Mail Holdings was born.

The organization has since grown through acquisition, including adding three major components in just the last two years. Its holdings now include Creative Mailing & Marketing in Los Angeles; Creative Print & Mailing in Tulsa, OK; Focus Direct in San Antonio; Mail America Communications in Forest, VA; and International Data Management (IMDI) in Akron, OH. The privately held company's revenues now exceed $100 million annually and it employs more than 950 people.

With the exception of IDMI, each location is equipped to provide mailing and offset printing (both narrow web and sheetfed) services. All five of the production sites also have some form of digital imprinting capabilities for personalization, whether that be continuous or cut-sheet laser devices.

IDMI is a separate and distinct operation that provides complete data management services for direct marketing. Even though it may have customers in common with the production sites, the database firm isn't a captive supplier to them. Those facilities have their own resources for processing a supplied mailing list, but do not get involved in merging lists and managing responses.

Direct Mail Holdings serves as an organizational umbrella for the subsidiaries, but management has no plans to fold them into one brand. "We believe each one of those companies has uniqueness of product, location and market segment, so the individual branding is important," Seberg says.

"A lot of pride has been built up in those names over the years," adds John Rodewald, executive vice president. "We don't see the need to make a change."

Production Plans

On the other hand, management very definitely sees creation of a unified production platform as a key strategic initiative. It initially focused on establishing a geographic network through acquisition.

"We've positioned ourselves to deliver mail a bit more promptly by having multiple production locations. We now have facilities within 12 hours of every bulk mail center in the United States," Seberg points out. "All of the facilities have post offices on-site and are delivering directly to bulk mail or sectional mail centers in the area. That's helping to set us apart."

Once it had multiple production sites in place, management began looking to tie their capabilities together. This includes instilling process standardization across plants, as well as furthering the marriage of offset and digital production within individual facilities. The organization has made a sizable investment commitment—particularly on the digital side—toward achieving its goal.

Seberg says the company looked to industry vendors for help with this initiative and found a good partner in Eastman Kodak Co. Having built up its Graphic Communications Group through acquisition, Kodak has been able to provide its own form of one-stop shopping for Direct Mail Holdings' needs, the company president notes.

"In trying to put our companies together, we were asking questions like, 'how do we integrate all the technology and how do we integrate color across operations?' Kodak brings to the table the technology to connect our facilities together, from implementing color management to integrating front-end systems and laser imagers in order to create operational efficiencies," Seberg says.

Across its various locations, the organization currently operates 11 narrow web offset presses (mostly Sanden UV presses with up to 10 colors), seven sheetfed offset machines, 40 (24 cut sheet and 16 continuous) laser imaging systems, and 10 ink-jet addressing/personalization units. All told, it has approximately 500,000 square feet of production space.

Seberg says that extensive installed base of equipment makes it impractical for the organization to standardize its platform by using the same model machines in each location.

"We are trying to standardize the way we work, though. We can implement the same processes and procedures to get the work done," he contends. "We want to be able to move work around (between plants) to get jobs printed and mailed if necessary. Making that practical is a big challenge."

Vendor Relationships

On the conventional side, Direct Mail Holdings has turned to Kodak Polychrome Graphics (which Kodak acquired in whole this April) for assistance with issues such as how to fingerprint and control its presses so color proofing is consistent at the five different sites.

"We're touching on all parts of Kodak's Graphic Communications Group in the digital arena," Seberg continues. "We are a company that is fairly aggressive and willing to take a chance to grow. We are trying to use digital technology to expand our market offerings, and Kodak has been a great help because of the breadth of its products."

So far, a Kodak NexPress 2100 digital color press has been installed at Creative Print & Mailing in Tulsa and a like unit is currently being installed at Alaniz in Mount Pleasant. Direct Mail Holdings also has acquired a couple of wide-format Encad Novajet 1000i color ink-jet printers and a Kodak Versamark VJ1000 DE monochrome ink-jet printing system for adding variable data to direct mail pieces.

That's on top of the 20 Kodak Digimaster black-and-white printing systems previously installed by Alaniz. "We do a large volume of personalized mail, so our cut-sheet operation is generating a lot of product," Seberg says. "We've tried other systems and that machine has been the most cost-effective for us."

The industry exec sees additional benefit in Kodak's pending acquisition of Creo. "The combination would provide the potential to create a platform that marries the offset mentality of plates to the flexibility of the digital world in a single workflow, over multiple locations," he says.

Seberg remarks that a big part of the motivation for acquiring the NexPress 2100s and Encad Novajets is to "learn what we can do with them to help our customers. We may roll them out to all of the production sites, and we may not. We don't quite know yet," he says.

Not-for-profit organizations account for a major part of the organization's customer base, but it also does work for commercial enterprises, Rodewald points out. "Our target customer does regular mailings of anywhere from 10,000 to five million pieces," he says. "We generally don't do many mailings of less than 10,000 pieces, or the very large runs in the 10 million-plus range."

Facility Goes Digital

Creative Print & Mailing is an exception, since it does a significantly greater volume of general commercial printing work, Rodewald says. That was one of the reasons it was selected to be the first subsidiary to install a NexPress 2100 color press.

Seberg sees all-digital, four-color printing capabilities enabling the organization to achieve production efficiencies for certain short-run work while also opening up new markets for targeted mailers, particularly on the commercial side. He says the company is still learning how it can effectively employ the technology. Whether or not it makes sense for the organization to start targeting smaller direct mail runs is an example of the types of questions still to be answered.

"We always have to make sure that we thoroughly understand a technology before we try to roll it out to customers," the company president stresses. "What I'd be concerned about is if our organization is ready to serve smaller mailers and the expectations they'd bring. Such customers may not have all the resources and expertise that comes with working through an advertising agency, which is typical for our existing customers."

Going forward, Seberg sees Direct Mail Holdings' role as making sure to maintain optimum mailing standards while exploiting the potential of print (offset and digital) to make every piece as enticing as it can be to improve response rates. "We need to continually make sure that every mail piece is really targeting and getting to that end customer in a way that will make him/her respond to it," he says.

Even though the projects it currently produces typically have lead times ranging from 10 to 25 days, Seberg believes shortening job turnaround still represents a critical opportunity to gain competitive advantage.

"We're striving to take all the unnecessary time out of our production equation to give customers the best possible delivery process," he explains. "If we use time well, we can create a barrier to entry for outside—even offshore—forces competing against us and continue to gain customer and/or market share. That's part of our business strategy of establishing multiple production sites and exploiting the latest technology."

The company execs believe that philosophy should be extended to technologies some see as competitors to print. "Fundraising for the past presidential election demonstrated that e-mail and the Web can be very effective parts of a campaign," Seberg acknowledges. "Again here, we need to find out what will work for our customers. We look to see how we can use new media together with print and embrace the opportunity."

Using direct mail to drive people to Websites has proven to be a very effective application, Rodewald adds. "We are partnering with other service providers (for Websites and hosting) in that arena."

Further evidence that Direct Mail Holdings is committed to doing what it takes to provide one-stop service, and that it's hitting all the right notes with its business strategy. PI