Acquisition lets both companies add sales channels
By expanding its product line and introducing a 180-page catalog, business forms marketer McBee Systems has doubled its sales growth over the past year.
Prior to June 1998, McBee’s sales were growing 7% a year. But that month, business supplies cataloger New England Business Service (NEBS) acquired the then-$60 million McBee. A year later, in September 1999, McBee launched a print catalog, all the while maintaining its 300-person U.S. field sales team and its 100-person Canadian sales team. Now McBee’s sales are growing twice as fast, reaching an estimated $75 million for ’99.
While $500 million NEBS has helped McBee build its own catalog business, the parent company also plans to use McBee’s sales force to sell products from other NEBS catalogs later this year. (Over the past four years, NEBS has bought four companies – RapidForms, Chiswick, and Standard Forms Ltd. in addition to McBee.)
“The real attraction in acquiring McBee was that it has a full-time sales force,” says George Allman, NEBS’s president of diversified marketing. “Now instead of just approaching customers of our other properties with our catalog and telemarketing, we’re able to get another leg on our direct marketing stool by having McBee salespeople visit certain customers.” Aside from the 20-person field sales staff from packaging products cataloger Chiswick, NEBS has no other field sales presence, even though some of NEBS’s product lines, such as the corporate greeting cards sold in the Main Street Collection catalog, “can be much better sold through a direct face-to-face sale than through catalogs or telemarketing,” Allman says.
As for the creation of the McBee catalog, NEBS added products from its flagship catalog, such as rubber stamps and address labels, to the checks and computer forms that made up most of McBee’s merchandise. “The McBee product line had been rather limited,” Allman says. “It was primarily an annual repeat sales business, with field salespeople placing annual calls either in person or on the phone.”
Minimal customer overlap
All told, the McBee catalog includes 400 NEBS products branded as McBee items, says McBee president/CEO John Paukstis, “so our customers think they’re getting McBee products.” But although there is now a considerable amount of product overlap between McBee and NEBS, the customer overlap is less than 10%, Allman says, since the majority of McBee’s customers are associated with banks.
McBee also installed NEBS’s order-entry system last year. “Now we’re able to enter new orders from our call center and proactively do outbound telemarketing to our customers,” Paukstis says. “Before, we couldn’t enter an order to our system from a new customer. We always had to go through a sales rep.”