A Leap of
Faith
Capitol Communications Inc. decides to work only with distributors
to achieve its goal of becoming a full-service direct mail company. The result: more profits.
BY PREETI
VASISHTHA
More by this author
When Timothy
P. Farrel, CEO of Capitol Communications Inc., a direct
selling manufacturer, told distributors that the company
was considering operating as a trade-only firm, their
reaction was disbelief, followed by two questions: 1)
Are you sure you’re not going to compete with
us? 2) Can we have your customers?
The Columbus, Ohio-based company’s decision wasn’t
simple. Founded in 1965, Capitol Communications started
by offering snap and continuous forms, cut sheets, checks,
envelopes, etc. It diversified its offerings in the
early 1990s, adding direct mail and jumbo roll products,
and most recently, laser personalization. The company
expanded several times and now operates from its 30,000-square-foot
facility.
In the past five years, the company’s direct mail
sales grew from 10 percent to a whopping 60 percent.
The company noticed that almost all of its direct mail
clients were distributors, Farrel says. He and Brian
Wallace, vice president of distributor services, wondered
if the company would be more profitable and achieve
its goal of becoming a full-service direct mail company
if it worked only within the independent channel. Farrel
decided to explore the idea. He sought input from distributors
and chose the top 10 distributors listed in Print Solutions’
June 2004 issue. He visited seven distributors, who
responded “very favorably” to the idea,
Farrel says. “Keep in mind that the folks we were
talking to always perceived us as an enemy,” he
says. “We were given some assurances about the
support we would receive.”
Farrel and Wallace also analyzed market data to study
clients’ buying habits in the industry. “We
concluded in late 2004 that we could penetrate the forms
market much more effectively by selling only to the
trade,” Farrel says. “The reasons were simple:
more volume and better capacity utilization to help
fund our growth.” Farrel and Wallace presented
the idea to the company’s management team, which
also responded favorably.
The company
is in transition. It eliminated its outside sales force
on Jan. 1. One of its sales employees retired. Wallace,
who was vice president of marketing and IT, was promoted
to vice president of distributor services to build relationships
with distributors. Like all the employees, the four
customer service representatives are supportive of the
company’s new direction and excited about the
prospects, Farrel says.
“The primary challenge is what to do with our
current customers that we have been servicing for many
years,” Farrel says. The move is transparent to
them. When customers seek services from Capitol Communications,
“We do not say that we just can’t do it,”
Farrel says. “For them [customers], it’s
business as usual.” At the same time, the company
is building relationships with several distributors
on local and national levels for them to begin working
with Capitol Communications’ clients.
“Our membership with DMIA has proved extremely
valuable in terms of getting the word out,” Farrel
says. “We’re also working with IBSA and
several other national distributors to educate them
on what we do and how we do it.” As word spread,
several distributors also contacted Farrel seeking business
opportunities. There’s no timeframe for the company
to complete its transition, Farrel says. “We want
to make the right decisions and find the right partners.”
Preeti Vasishtha is assistant editor of Print Solutions.
Email her your comments at pvasishtha@PSDA.org.
Company:
Capitol Communications Inc.
Headquarters:
Columbus, Ohio
Founded:
1965
Principals:
Keith Helfer, founder; Jamie Helfer, president; Timothy
P. Farrel, CEO; Joe Helfer, COO
Employees:
48
Business
in Brief: Capitol Communications started by offering
snap and continuous forms, cut sheets, checks, envelopes,
etc. It diversified its offerings in the early 1990s,
adding direct mail and jumbo roll products, and most
recently, laser personalization. It caters to the health
care, financial, insurance, manufacturing and retail
industries.
