The Postman Delivers: Money Mailer Operator Rides Out The Storm

In 1980, Bob Chase was in his early 20s, with a small family and not much money. He was barely able to start his first franchise, a Dry-Chem carpet cleaning operation, from a then-fledgling franchisor. But Chase wasn't the kind of young man to let a few little things like that stop him from building his own business from the ground up.

"At 22 years of age, trying to figure out what to do with my life, newly married, with one child and another on the way," he says, "I had to learn very, very quickly. I learned marketing and personnel management and built a good business."

Armed with an unyielding work ethic and a desire to grow quickly, Chase wound up in the top 1 percent of Chem-Dry's franchisees by running seven crews in the brand's considerable worldwide network. And along the way, a sales representative from Money Mailer dropped by to sell him an ad in one of their mailers. Chase liked the concept at first sight and decided soon after that meeting to buy Money Mailer's first franchise in Phoenix.

By that time, Chase had also learned plenty about building organizations and achieving ambitious goals. "It certainly helped from the perspective of business operations," Chase says about his franchising background in carpet cleaning. "When we ran across Money Mailer we were primed and ready to launch, and it took off quickly."

Chase later sold his Chem-Dry business and went on to acquire a host of Money Mailer franchises covering the Phoenix and Denver metropolitan areas. Today his packets of coupons arrive every month in more than 1.5 million homes, covering 154 zones of 10,000 addresses in each.

Money Mailer works directly with small and medium-sized businesses, says Chase, shipping out monthly stacks of 30 to 50 advertisements distributed on a ZIP Code basis. With that kind of pinpoint delivery system, the local dry cleaner, for example, can hit their target audience in the critical two- and three-mile radius around the store.

"It allows a nice campaign for as little as $300 a month," says Chase. "My company works with 1,300 businesses each month in Phoenix and Denver." It's also the kind of business that appeals to consumers' thrifty side, a strategy that is helping him continue to grow even as the economic downturn plagues his two regional markets.

"The trend is quite good," says Chase. "Couponing became very popular. As times got tighter our product has held on very nicely. Consumers really like what we do. It's an important service. That's why we keep customers and grow. Our typical advertiser has one location, with an owner on the premises. So the Money Mailer product has weathered the storm extremely well."

So has Chase. His Money Mailer franchise operation has swelled into a multimillion-dollar business. At 52, and with the economy showing signs of healing and sales on the way up, he's reached an age where he can forecast a spike in revenue that will help set him up to sell the business in the next 10 years and retire comfortably at a stage in life when he can still enjoy the fruits of his labor.

Before he reaches that point, though, Chase has set himself some very ambitious new sales goals to hit.

QUESTIONS

Name: Bob Chase
Title: President
Company: Money Mailer Response Marketing
No. of units: 30 Money Mailers

PERSONAL

Age: 52
Family: Married, four children
Years in franchising: 30
Years in current position: 21

Key accomplishments:
We've been able to grow our organization to be the largest in the Money Mailer system. We've contributed a lot of marketing concepts to the company. We take pride in ad design and packaging, so that when it's delivered it gets used.

Biggest mistake:
I would say not expanding sooner.

Smartest mistake:
One of the smartest things I did was expanding our mailing schedule from 8 to 12 mail dates a year.

How do you spend a typical day?
I work 10 hours a day, sometimes on Saturday. I'm at my office, meeting with employees, and traveling to the Colorado office twice a month.

Work week:
I spend eight days a month in Colorado. And I'm on the leadership committee for Money Mailer. I have 50 employees over two states and I stay focused on keeping the organization and those guys humming.

Favorite fun activities:
I am a bit of workaholic but I very much enjoy being with my family. I have two grandchildren now and I enjoy being at home on a weekend.

Exercise/workout:
I'm not really into too much exercise. I do enjoy playing tennis.

Favorite tech toys: I am a big Apple fan. I owned a Mac the first year they came out. I have 50 in my company. I own an iPad and iPhone.

What are you reading?
I typically read personal development books. I particularly like Jim Rohn, a personal development guru who passed away this last year. He's my personal hero. I listen to and watch all his stuff.

Do you have a favorite quote/advice?
From Yoda, the Jedi Master: "Do, or do not. There is no try."

Best advice you ever got:
When life gives you lemons, make lemonade. We'll continue to make lemonade around here. That's the nature of the business in this economy. There are many things you go up against that want to punch you back down again. But we're always making lemonade.

Formative influences/events:
My parents. My Dad, Carl Chase, taught me a very good work ethic at a young age. He was instrumental in teaching me how to work.

How do you balance life and work?
You have to focus on what's most important in life, like family, and I think also personal spirituality and trying to give back along the way. That keeps me pretty well centered.

MANAGEMENT

Business philosophy:
I'm very hands-on. I have an open-door policy for all of our team members. I believe that if you take care of your customers and your employees, you'll get everything you want.

Are you in the franchising, real estate, or customer service business? Why?
Customer service, because we're selling an intangible, showing customers how to market and grow their businesses. We're taking care of customers, giving them the correct advice and then retaining them.

What gets you out of bed in the morning?
I am very fortunate that I have a really great group of people I work with and a really great group of customers. I like seeing our customers succeed as I have succeeded. I love the small-business person in America. Serving those people and helping them grow their business, that's really my motivation. I can't think of anything else I'd like to do. It's fun, creative, helpful, and it works. The Money Mailer envelope that we deliver is a really incredible product and the consumers love it. It's fun to figure out what you're going to do today to grow your business.

What's your passion in business?
Customer service, excellence, and each person in our organization being the best they can be in the marketplace.

Management method or style:
A hands-on, open-door, team approach.

Greatest challenge:
The greatest challenge has been the tight economy. Everybody in the advertising industry took their lumps. Nothing is like what it was in 2006, for newspapers or direct mail. It taught us to run a little leaner organization and drove some competition out of business. We emerged as one that has survived and right about now it's starting to pay dividends.

How close are you to operations?
I stay very close. I come to my office in Phoenix every day, with eight days a month in Colorado.

Have you changed your marketing strategy in response to the economy? How?
I think it's pretty much the same. The envelope we mail out to 1.5 million homes every month is our marketing right there, branded on the envelope. Most of my marketing is done by my product. How is social media affecting your business operations? Social media has not really affected my business. Keep in mind that we are in the direct mail business and deliver our brand to most homes in a DMA. That alone is a very valuable form of marketing, the fact of having your name delivered into the homes, in print, every month. I have not seen social media helping or hurting my business.

How do others describe you?
Certainly driven, focused, demanding excellence, and creative.

How do you hire and fire?
We get a lot of people from referrals from existing staff. And we do a little recruiting activity that assists us from time to time. We've been grabbing a lot of people from the newspapers and Yellow Pages. It's nice to have people come to you and say, "I'm tired of selling against you. I'd like to join your team."

How do you train and retain?
We have training staff. We do extensive training in the field and in the office. It's very focused and specific for our industry.

How do you deal with problem employees?
Our business, outside sales, is challenging. We go out and hunt every day. And sometimes we all get to a point where we admit that it's not for that person. If you don't enjoy it, we can usually part on good terms.

BOTTOM LINE

Annual revenue:
About $13 million

2011 goals:
To achieve a 10 to 15 percent growth over the previous year. We have enjoyed a more profitable year than we've experienced in the last couple of years, and we plan to expand in the Money Mailer into a couple of other markets. Four years ago we were $8.5 million in revenue, and I've set my sights on $20 million in the next four years.

Growth meter: How do you measure your growth?
I look at customer count. We're not generating as much revenue per customer, so that means you're retaining good business if you're keeping the customer count growing.

Vision meter: Where do you want to be in 5 years? 10 years?
Retired after about 10 years.

How has the most recent economic cycle affected you, your employees, your customers?
Our customers are everybody in the strip center down from where you live. It's been a very challenging time, and good business owners have gone out of business. They were not able to sustain their business in an economic downturn no matter what they did.

Are you experiencing economic growth/recovery in your market?
Yes, we are seeing some growth.

What did you change or do differently in this economy that you plan to continue doing?
We've renegotiated leases, tightened up and grown much more efficient. I think that will really play to our advantage in the next 12 to 24 months.

How do you forecast for your business in this economy?
You can do it. I expect we'll see a 10 to 15 percent growth rate ahead.

Where do you find capital for expansion?
Mostly I'm self-funded. I haven't arranged financing since back in 2006, when you could still get a loan.

Is capital getting easier to access? Why/why not?
No, it's not.

What kind of exit strategy do you have in place?
Maybe we could do a private equity deal.

What are you doing to take care of your employees?
We pay a generous commission. We have bonuses and prizes, like TVs or iPods.

How are you handling rising employee costs (payroll, healthcare, etc.)?
We do shop things out regularly. We do the best we can. We still cover 75 percent of the cost of health care coverage, and we'll do that for as long as we can. Of course, if a certain health plan goes into effect, I don't know how long that will be. But we're very efficient.

How do you reward/recognize top-performing employees?
There are national sales contests and usually we have the top one, two, or three employees in the company. We've had the top salesperson in the company for the last 18 years, and that's been a couple of different people.