Commentary & Analysis
Market Connections = Market Transformation
By Barbara Pellow What really causes industries to transform is people May 9,
By WhatTheyThink Staff
Published: May 9, 2005
By Barbara Pellow What really causes industries to transform is people May 9, 2005 -- A few years ago, Michael Porter and Jan Rivkin wrote an article in the Harvard Business Review called Industry Transformation. The article pointed out that in times of revolutionary change, many elements of an industry change at the same time. Value propositions that were once successful might no longer sell and skills once vital for success can become commodities. New technologies, changes in customer preferences, habits and lifestyles, shifts in regulatory environments--all of these spark change. But what really causes industries to transform is people: individuals who recognize new opportunities, make the hard choices and put money at risk to set their business on a new path. This past week, I had the opportunity to interview Michael Moran, president of Toronto-based Market Connections. He demonstrated that he was a real "market transformer" in the world of business communications. Market Connections was incorporated in 1992 by its two principals, Michael Moran and Daniel Brown. The company was created to provide a variety of graphic design, document management, print-on-demand, publishing and production services to the U.S. and Canadian direct marketing community. Since 1992, the company has expanded both its product offerings and clientele and now enjoys a stable base of 5,500 to 6,000 customers in diversified market sectors. Market Connections Inc. services customers who require laser and data printing, as well as direct mail production, but they have taken a very different approach. A Different Application Focus to Transform Marketing Growth of the custom publishing sector has regularly outpaced that of other marketing tactics. Market Connections has delved into the world of custom publishing through an application focus on the newsletter market. This is a big and growing business opportunity. According to the Custom Publishing Council, Corporate America produces more than 116,000 unique custom publications annually and spends $30 billion each year doing so. This makes custom publishing, as an industry, similar in size to such media sectors as consumer magazine publishing, radio and network television. The growth of the custom publishing sector has regularly outpaced that of other marketing tactics. Last year 13.2 percent of the average corporate marketing budget was spent on custom publishing, up from 11.1 percent the prior year. The value proposition to our customer base is that the newsletter is a persistency tool. According to Moran, "We focus on the delivery of high value industry specific customized newsletters for the financial services, dentistry and real estate markets." The content is web accessible to financial service agents, real estate brokers and dentists as an educational tool for their client base. The agent can log onto the Internet, select appropriate content for his or her client base, upload names and addresses and request a targeted newsletter. Moran said, " The value proposition to our customer base is that the newsletter is a persistency tool. We get testimonials all the time from our financial services customers. The financial advisor will go to somebody's house and they will see a copy of a newsletter sitting on the coffee table with certain sections highlighted and immediately they realize the value of maintaining that persistency in communication with them." The Market Connections business model is one of "full service to the client." The support provided to its customer base includes: Writing and Editorial Services - Market Connections develops and delivers timely and informative content developed by a team of editorial professionals. The writers and editors are experts in their respective fields, from finance to health services. The editorial staff manages all aspects of the copy, including research, compliance review and other regulatory requirements. Creative and Design Services - The team of in-house designers works with clients to determine their graphic needs. They provide expertise in creating newsletters, custom brochures, post cards and direct mail programs. The creative staff is consistently seeking and implementing innovative ways to deliver high-quality product to the market. Consultation and Program Management – Market Connections takes a consultative approach with clients, determining their needs and expectations to ultimately recommend a suitable strategy to achieve their objectives. Web-Enabled Access, Production, Delivery and Fulfillment – Once the financial advisor, real estate broker or dentist has selected content and uploaded a mailing list via the Web, Market Connections handles the rest, producing full color Newsletters on a Nexpress 2100, and handling mail operations for the customer. "We handle it all from beginning to end. We write the newsletter; we design it; we print it; we mail it; we handle the marketing of it. The average user purchases two to three hundred newsletters from us at a cost of about a dollar per piece," explains Moran. "There is no way they could self-publish; do the research; write the articles; deal with compliance issues in the financial services community; print it and get it out for that price--and get the value of persistent communication with their client base." The Sales Process According to Moran, selling custom newsletters takes a "top down - bottom up" marketing approach. Market Connections makes an initial contact with the corporate headquarters to explain the value of custom published newsletters and the ease of implementation and value for remote agents relative to improved customer contact level via an educational direct mail newsletter. They then present and sell directly to the agents. Moran said, "Our principal method for selling to the financial advisor, dentist or realtor is to demonstrate the product. We do that at trade shows and marketing seminars. We bring a digital photographic studio with us; take photos of the agents; collect their pertinent business information; and then go back to our office and produce 50 copies of the newsletter. We send it to them at no charge, and they have a tactile product in their hands which clearly demonstrates the potential of this customized communications tool. Then our sales people follow-up with them and convince them to become clients." Market Connections realizes the Internet is a key market driver. Like many digital service providers, Market Connections realizes the Internet is a key market driver. "Our Web-to-print capability is the linchpin that ties the entire organization together," says Moran. It allows 2,000 to 3,000 customers to communicate with us on a regular basis, maintaining their mailing lists. They each may have anywhere from 100 to as many as 2,000 names. We execute their micro-marketing program using a macro marketing technique. We collect the names and addresses, produce the variable content in the newsletters, and produce a contiguous mail file leveraging postal sorting discount rates. We send the newsletters anywhere from California to Maine." The Value for Market Connections Market Connections has built a business model that works. They service thousands of customers that buy product from them on an on-going basis. The company has accomplished this with a clear understanding of its customer base and target market and an Internet strategy that has positioned it to serve current customers as well as to build for the future. When you ask Moran about the future for Market Connections, his vision is clear. "Our long term goals are to continue in the same vein that we are now. We are going to look for new vertical market opportunities and expand the ones we are in now. The ultimate objective is to triple our client base within the next five years." The Market Connections success is also attributed to a willingness and ability to harness new technologies, employ new and innovative formats, leverage data and then integrate these components into the digital world of electronic print. Market Connections is truly a "market transformer."