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Direct Response Marketing

Field Reports - June 2013

1 Jun, 2013 By: Doug McPherson, Thomas Haire Response


Listen Up Español Creates Internal Loyalty With External Charity

By Thomas Haire (thaire@questex.com)
Craig Handley, CEO and Owner, Listen Up EspañolListen Up Español (LUE) is a leading Spanish-language call center focused solely the U.S. Hispanic market, based in Portland, Maine, with more than 800 Spanish-speaking agents also operating out of an office in Hermosillo, Mexico. During the past year, the company has been in the midst of a charitable campaign to build a new school in Nicaragua — and has created a powerful emotional connection with its staffers in the process.

Recently, Response caught up with Craig Handley, CEO and owner of the company, to discuss the idea behind the effort and how it is progressing.

Q: What prompted LUE’s recent charitable drives?

A: At Listen Up Español, we have always been driven with a desire to give back. It’s one of our seven core values. But any successful businessperson — or flight attendant — will tell you that you need to put the oxygen mask on yourself first before helping others. In other words: take care of your own needs before trying to help others.

Another of our seven core values is that “everything is possible.” Four years from now, we hope to have given away over a million dollars to charity. Knowing that everything is possible, we took this challenge to heart and began our charity initiative at the start of 2012.

Q: How did you promote this drive among your employees?

A: To ensure that we follow through with our goals, we participated in a study with Forrester research where we could test the concept of improving performance through charitable giving. We provided monetary incentives to a group of agents and found that increasing cash flow increased performance by almost 20 percent. We then gave the same amount of money to charity and that accounted for an almost 17-percent increase in performance. The results of this study demonstrated that cash had a greater effect on the direct results. We also tracked the indirect results using employee satisfaction surveys and found that indirect variables — like the temperature in the office, the lighting, and the cleanliness of the bathrooms — improved success considerably.

More than 80 percent of our agent population participated in two surveys: one before the charity incentive was applied and one after. The numbers demonstrate the key increases between the first and second surveys:

  • “I feel that I work for a great company”: 9.5-percent increase
  • “I feel this company’s values aligned with my personal values”: 5.3-percent increase
  • “The mission or purpose of my company makes me feel my job is important”: 4.8-percent increase
  • “There is a strong feeling of teamwork and cooperation in this company”: 5.1-percent increase
  • “My fellow employees are committed to doing quality work”: 6.3-percent increase

Q: What happened when you partnered with buildOn, an international nonprofit organization that runs youth service afterschool programs in U.S. high schools, and builds schools in developing countries?

A: We decided to partner with buildOn, and we raised more than $100,000 in 6 months. We are on track to do more than $300,000 in 2013. Like the Forrester project, buildOn’s mission aligned with our core values of “going beyond ourselves” and “growing brain cells.” We set up a fundraising model with the call center where, at the end of each call, the agents were asked to read a script offering a free trial magazine subscription through Synapse with a $1 donation to buildOn. The goal of this effort was to build a school in Nicaragua to serve children and women without access to education. Eight employees and our president, Tony Ricciardi, went to Nicaragua to help build the school.

We benefited from an increase in magazine subscription sales and experienced a positive cultural shift as a result of this partnership. The campaigns with the buildOn script had a 20-percent higher conversion rate, week over week, compared to the campaigns without the buildOn script. We took an employee satisfaction survey to see how team members were impacted by the program. On a scale of one to five (five meaning “Agree Strongly”), 50 percent of our employees marked a five in response to “I enjoy my job most of the time,” and 43 percent marked a five in response to “I feel I work for a great company.”

This was significant feedback, because while not all employees were able to join the team in Nicaragua, they all played an important role in the program’s success. We believe that these results are, in part, because of the role of our culture manager in educating the team on buildOn through trivia games and a fundraising thermometer, as well as a 20-minute documentary produced by an employee of our production department during the trip to Nicaragua that was shown at the company Christmas party.

Q: Can other companies in the space benefit from a similar program?

A: Here’s how you can apply it in your business: if you are marketing a product, consider how you can include charitable givThe members of the LUE team, including Tony Ricciardi, company president (far right), are all smiles in Nicaragua.ing into your campaign. If you are a call center, do exactly as we did. If you’re a fulfillment center, ask the customer if you can apply part of their refund to a charitable organization when issuing credits. They’ve already spent the money; it will be easy for them to say yes.

The bottom line: charitable giving improves performance, helps generate income, gives back to the world making every day more fulfilling and more fun, creates happiness, and promotes positive karma. It’s what we call “Delivering Awesomeness.”

Eight members of the LUE team traveled to Nicaragua to take part in the actual construction of the school the company was supporting through its partnership with buildOn.

 


Oreck Founder Blames VCs for Company’s Failings

By Doug McPherson

NASHVILLE, Tenn. — Oreck Corp., the vacuums and cleaning products company, filed for Chapter 11 bankruptcy protection in May. However, the company’s founder, David Oreck, is unhappy with the situation and blames venture capitalists for the mess.

Oreck told the Medford (Ore.) Mail Tribune that those who acquired the company had different ideas than he did about running it. “I didn’t believe in doing business with the big-box Wal-Marts of the world,” Oreck said to the newspaper. “I was oriented for the consumer ... and it worked extremely well. They felt their big-box approach was the way to go. They were amazingly ignorant of the methods I used.”

Oreck said he couldn’t understand why investors would buy a successful company and then go in a direction contrary to the one that provided sound financial returns for decades and hundreds of jobs to Americans.

“What they paid for was very successful and liquid,” Oreck said. “Quite frankly, they were mostly concerned with getting their money back out as quickly as possible. My idea was to build something going into the future and succeed me. There are a number of these groups where they buy things and turn it around, make a buck and take a walk. That’s fine, and that’s their business, but that’s not my idea of running a business.”

Oreck has seen his former company enter bankruptcy twice since selling it. Private equity firm GSC Group took Oreck into bankruptcy in 2010. Controlling shareholder Black Diamond Commercial Finance sought court protection for Oreck earlier this month. Both companies had courted big-box retailers to the detriment of their own stores, the founder said.

“Maybe I’m naïve, but if someone pays a good bit for a successful company that has a good track record and is profitable and relatively free of any debt, why would they do things differently? If you thought you had a better plan, why not just go into business for yourself?” Oreck posited.

Oreck has said he thinks bankruptcy is one way to clean the decks of poorly run companies. “Unfortunately, vendors go along doing business with the company and lose money to the extent the company owes them,” he said. “In most cases, people get a pretty good indication of whether they should stop selling to, or issuing credit to, that company.”

Oreck recently published his autobiography called “From Dust to Diamonds.” In it he shares his dislike of venture capitalists. Oreck said the timing of the book’s release is a coincidence.

The Chapter 11 move will allow Oreck to sell the business while continuing day-to-day operations without interruption. Oreck has about 70 employees in the corporate office in Nashville, and it employs 250 workers at its plant in Cookeville, Tenn. The company also has about 325 employees at its 96 company-owned retail stores.

David Oreck founded the company in 1963 selling vacuum cleaners by mail. The company sells its products in hundreds of Oreck Clean Home Centers, through major retailers, and through phone and online direct sales. The company distributes products in the U.S., Canada and parts of Europe.


Little Honored With HSN Legend Award

By Thomas Haire (thaire@questex.com)

ST. PETERSBURG, Fla. — After more than a quarter-century of successful partnership, HSN honored fitness icon, motivational star and beloved life coach Tony Little with its annual Legend Award. The honor was presented during the television network’s Third Annual HSN Partner Recognition Gala in late March at the Vinoy Resort & Golf Club.

“I’ve grown up at HSN. It’s where I learned DRTV and began to understand how the shopping channels work,” Little said in a recent exclusive interview with Response. “I’m involved in every little thing with our products, our videos, our presentation. But I couldn’t have accomplished everything without such great partners and buyers at HSN. I have a tremendous relationship with them.”

The Legend Award is the highest honor an on-air personality can achieve at HSN. For 26 years in partnership with HSN, Little has helped shape the bodies of millions with his ubiquitous exercise gear, such as the renowned Gazelle, and has even helped shape the way in which fitness products are marketed worldwide.

“The Gazelle’s always been my favorite product, from the very start,” Little said. “Every day — in airports, in hotels, in the mall — I’ll see people doing the Gazelle motion! But now, my biggest and best items are the pillows and the shoes. We’ve sold millions, and the key is loving the products. You can sell anything as long as you love it.”

Those pillows — marketed in conjunction with Homedics — and his “Cheeks” line of fitness shoes are just two of Little’s more recent successes. There’s also Body by Bison, a line of buffalo meats that have made Little the No. 2 distributor of bison meat in the U.S., the Guiltless Entrees line of frozen foods, and the Easy Shaper exerciser — among others.

“I never expected to be the top footwear guy on these networks (Little also has a partnership with Canada’s The Shopping Channel),” he said. “It’s my biggest passion now. But we’re also up 44 percent in food. I’ll never forget when we started with bison — everyone said that no one’s going to buy meat. I believed in it, we partnered with the best guys and now we have 20 SKUs. We’ve sold more than 3 million burgers and 3 million hot dogs alone.”

Little also mentioned the “Protein Sensations” and “Carb Conscious” lines of food, in addition to Guiltless Entrees. “We’ve expanded tremendously in food,” he said.

In addition to his success with pillows, Little added that he’s now getting “into beds and mattresses, creating a new lineup and strategy in healthy sleeping.” He’s also promoting a TENS massager unit, as well as the new iJoy mechanical massage chair. Finally, there is also a new version of the Gazelle that is expected to hit the airwaves this summer in partnership with American Telecast, which bought the ownership rights to the product from Fitness Quest.

If you’re worn out just from reading about all the irons Little has in the fire, imagine being in his shoes. But rather than wear down, Little just seems to get stronger with more product expansion. Or, as he put it: “I get them excited to exercise, I feed them after they’re done, put them to sleep at night and, when they get up in the morning, I put their shoes on them!”

The Legend Award, though, did stop the fast-moving Little in his tracks for just a moment. “It was an amazing evening for me, receiving this tremendous award,” he said. “I’ve always loved working with HSN and its viewers. It was especially gratifying to be honored and recognized by Mindy Grossman, HSN’s brilliant CEO and, more importantly, a great friend. Mindy’s one of the most inspiring executives in the world.”

But becoming an HSN Legend doesn’t mean Little is planning on winding down. As head of Positive Lifestyle Intl., he plans on continuing to build and expand on his success. “The strategy is to become a major branding company,” he said. “Look at what Martha Stewart did with her brand, and then look at my numbers. I want to take all of this to that next level.”


Streaming Media Devices Rise, Connected TVs Lag

By Doug McPherson

PORT WASHINGTON, N.Y. — About half of home entertainment devices in the U.S. are connected and being used online, but only 30 percent of connected TVs and 32 percent of Blu-ray players in U.S. homes are actually connected and used for online access, says a new study from NPD Group.

Streaming media players and video game consoles are connected and used the most, while connected TVs and Blu-ray disc players are the least likely to be tied to the web and used for their online features.

NPD, which surveyed more than 4,000 U.S. adults in first-quarter 2013 for the study, predicts that by next year streaming media players such as Apple TV and Roku will surpass the number of Blu-ray players installed and connected to the Internet, although it has not yet released figures in relation to that prediction. The overall number of Blu-ray players will still be higher than those of streaming devices in households.

John Buffone of NPD says streaming media devices are gaining ground in the over-the-top content market because their products are geared more toward online content delivery. He adds that while many Blu-ray players now come equipped with apps like Netflix, it’s a “relatively stagnant array of apps” that users can access, but a Roku device — for example — regularly gets new content.

Not to be outdone, Blu-ray manufacturers are trying to get more Web-savvy. Samsung says it will soon start shipping players powered by software that will offer video support for YouTube, BBC iPlayer and other streaming services. And Amazon is reportedly preparing to launch a new TV set-top box later this year to stream video into users’ living rooms.

Industry observers say Netflix stands to benefit from the rise in video streaming via TV. NPD says 40 percent of TVs connected to the Web, either through the TV itself or another device, are already watching Netflix. YouTube is a distant second, with 17 percent streaming the Google-owned video service, followed by Hulu Plus, at 11 percent.

Buffone says content usage remains dominated by Netflix and YouTube. He adds that Netflix offers access across any home entertainment device rather than selling its own dedicated player. Last week, Netflix reported having 28 million paid U.S. streaming subscribers at the end of March.



About the Author: Doug McPherson


About the Author: Thomas Haire

Thomas Haire

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