Risky
Venture Turns Up Gold
by:
Melissa Wells
Time Inc. connection helps spur Spring
Hill firm onto fast-growth track
Chris
Shemwell, president of Spring Hill-based National Information
Corp. and AMERICA'S MediaMarketing Inc., might have enjoyed
a lengthy career as an infantry captain in the U.S. Army.
But when his first daughter was born 12 years ago, Shemwell
and his wife, Roxann, didn't like the extended separations
that came with military life. Their family was their first
priority, so they decided to leave the military and see
how far their entrepreneurial ambitions would carry them.
"We
gave up the security of the military, everything, to venture
into our own business," Shemwell says. "We had no safety
net."
Months
prior to exiting the military, the Shemwells researched
home-based business opportunities and discovered the paucity
of literature to provide leads to these opportunities. "Roxann
ordered a book that was poorly researched," Shemwell says.
"Its information needed to be qualified."
While
still maintaining military obligations at their home base
in Columbus, Ga., the Shemwells researched and published
a book they believed to be of the quality they'd expected
when they had ordered information on home-based businesses.
"We looked at 100 companies before we found one that we'd
accept for our book," says Shemwell.
Then
they advertised Home-Based Income Opportunities in the Atlanta
Journal and other local publications. "The response was
overwhelming," Shemwell says. "Our answering machine was
full the first day. I was impressed at getting so much business
for such a small amount of advertising. We knew we were
onto something."
The
Shemwells left the military and moved into a spare bedroom
at Chris's grandparents' home in Spring Hill in Hernando
County. "We had two to three months to make it or change
our strategy," says Shemwell. "In 1990 it was tough to get
a job and I wasn't marketable in business. I could jump
out of planes and shoot rifles well. We had to work and
work fast."
With
$3,000 from savings and another $3,000 borrowed from his
father and a bank led to the formation of National Information
Corp. "Our first round of advertising had shown us that
our company had potential to be big," says Shemwell, "but
realizing that potential was another thing. We had one rule
during that time. We could do anything we wanted if it didn't
cost money. We had to stretch the time for our company to
make it." They set up a small shop for NIC in a strip retail
center in Spring Hill. "My grandpa found the space and installed
our phone system," Shemwell says. "We hired five employees
to handle phones for the order center. Roxann and I did
administrative work between taking phone orders."
Call
waiting The first round of advertising for NIC generated
only six calls the day before they officially opened for
business. "I sat there waiting for calls, waiting, waiting,"
says Shemwell. "We had no orders and, of course, I was nervous.
The next day our employees showed up and we got more calls.
We learned as we went."
As the
months passed the Shemwells added space to their office.
"We kept adding 600-square-foot units and knocking down
walls," Shemwell says. "We ended up with seven and almost
had the whole strip plaza."
The
sizable amount of dollars invested in print advertising
led to the formation Tiffany's Ad Agency, named after their
first daughter. "It's strictly in-house and takes care of
NIC's advertising needs," says Roxann Shemwell, NIC and
AMERICA'S MediaMarketing chief financial officer. "We spend
$40,000 to $70,000 a month on advertising in publications
in the United States and Canada. We've bought ads in every
publication you can conceive of."
All
of this advertising has led to the sale of a million copies
of their books, priced in the area of $40. But the secret
of their success has been analyzing which advertising is
most effective. "We learned how to track our ads," Shemwell
says. "That was the hardest nut to crack. Most companies
track the number of calls an ad generates, but we track
the number of paid orders from the dollars spent on advertising.
We know the numbers we need to get profitable and are able
to determine what publications pull dollars."
Over
the years NIC has accumulated a "large portfolio that is
producing," says Shemwell. "It took many years and millions
of dollars to find this."
Much
to their surprise, the Shemwells discovered that pet magazines
are among the most successful placements. "We have no idea
why," says Roxann Shemwell.
As the
years have passed they have published additional books.
Titles include How to Succeed in Your Own Home-Based Business
(for men and women, published separately), Government Seized
and Surplus Property Buying Directory, Government Loans
and Assistance Small Business Directory, Government Home
Foreclosures and Affordable Financing, and most recently,
Over 200 Computer Home-Based Employment Opportunities.
A
new idea In 1992 the Shemwells started a sister company,
AMERICA'S MediaMarketing. It's niche is in placing classified
ads for other direct-response advertisers. "We had learned
how to negotiate for blocks of ad space," Shemwell says.
"We decided to use that expertise to help other companies."
This
led to the next major challenge for the entrepreneurs, who
approached many national magazines about handling a classified
advertising section for the publications. "National titles
are snooty about not having classified ads," says Shemwell.
"We called Prevention magazine for a year before they'd
let us do it." The publishers at Official Detective Series
gave the Shemwells their first break. "They took a chance
with us and gave us a great rate to buy by the column inch,"
Shemwell says. "Whatever space we could sell we could buy.
That was the key. Most of the other magazines wanted us
to guarantee the space we'd take down. That was too risky."
The Parenting Group at New York-based Time Inc. also went
with AMM for several of their publications. "We started
with five column inches in Parenting magazine in 1992 and
now we're at five pages," says Shemwell. "Our advertisers
are paying in the area of $350 for a classified ad versus
$80,000 for a page and are getting the same readership.
We design the ads and e-mail them to Time. They just plop
it in the magazine." Other magazines in that division include
Family Life and Baby Talk.
The
executives at the Parenting Group have found that this strategy
works so well that they've referred the Shemwells to other
divisions of Time Inc. "We had handled the classified section
internally and realized we might be able to give it to AMERICA'S
MediaMarketing to expand that section," says Mary Smyth,
the Parenting Group's direct response advertising director.
"Their relationship with their advertisers is strong and
that allows them to grow the business. Because they've grown
so much they can cover many categories. And they take care
of everything from soup to nuts in that section. They clear
credit with the advertiser to pay for the space and handle
all the ad production. I give them the section and they
run with it. I just sit back and watch the section grow.
It's cool."
It's
so cool, in fact, that Smyth referred AMM to Time's health
magazine division. "They're pleased with the way their section
has grown as well," Smyth says. "AMM covers a lot of ground
and handles problems in a timely manner. I never get a complaint.
All the advertisers I send to them are extremely pleased
with the way things are done. We're very happy with the
results."
Climbing
the rankings The results are showing up on the bottom
lines at NIC and AMM, which show growth of annual revenues
from $200,000 in 1990 to $8.5 million ($2.5 million at NIC,
$6 million at AMM) last year. This growth has landed NIC
a spot on the Inc. 500 list in 1994 and 1995 and AMM in
1999 and 2000. "Most companies only make the Inc. 500 one
time," says Shemwell. "To make the list a company needs
600-percent growth in a five-year period." In 1995 NIC also
appeared on Deloitte & Touche's Technology Fast 500 (No.
368) and Tampa Bay Fast 50 (No. 6) lists. AMM is on this
year's Fast 500 and 50 lists.
The
three companies now employ 110 workers and operate in the
12,000-square-foot Gerald Steever Professional Center, developed
by the Shemwells on County Line Road in Spring Hill. "We
named it after Grandpa," Shemwell says.
One
of the offices is set up for daughters Tiffany, 12, and
Brittany, 9, who is learning the basics of life as a professional
in between home schooling sessions. While Roxann spreads
her day between teaching her youngest daughter and handling
administrative tasks at the companies, Chris has been executing
the next strategy for growth. The most recent endeavor has
been capturing a buying audience in cyberspace. But Shemwell
didn't buy into the strategy of advertising on line.
"NIC
started selling books on its website in 1998," says Shemwell.
"We advertised our website exclusively in print and that
was wildly successful. We weren't interested in online advertising.
Everybody thought we were crazy. But print advertising has
always worked for direct response. After a two- to three-month
ramp-up period, we were getting 10,000 unique visitors per
week."
Now
NIC has 15 websites and as many more in various stages of
development. "All are selling our products," Shemwell says.
"We generate 40,000 unique visitors per week." The breakdown
on revenues has shifted from 80-percent phone sales and
20-percent mail order in 1998 to 50-percent phone sales,
20-percent mail order and 30-percent Internet sales in 2000.
"This
is all based on print advertising only," says Shemwell.
"All the dot-coms that have survived are getting away from
online and going to print advertising. This works because
it brings people to the website who are interested in coming
there. But this was a tough sell because it wasn't the Ôin'
thing."
And
it has led to a companion piece of advertising in the classified
ad sections. "Our MUSTSEE websites section has proven to
be a big hit," Shemwell says. "The magazines love it because
it's all brand new revenue."
While
the Shemwells are enjoying their success, they balance it
with a generous amount of prudence. "There's always a crisis
to overcome," says Roxann.
"Sometimes
I think I'm going to have to get that job at McDonald's
after all," Chris chimes in. "We're just happy to be in
business this year."
