I NEED HELP. I own a small business with 30 employees. I also own Staples stock. Here is my quandry:
While Staples touts that the lions share of its' profits result from Small to Medium businesses,why do they not advertise to gain more Small to Medium business NEW clients?
Every Sunday I literally bite my lip when I see Staples,OfficeMax and OfficeDepot placing their inserts into Sunday Newspapers and spending all of that money. Hey, I own Staples stock....why do they spend all of this money reaching families in their homes when their majority profit source is small to medium business?
I do believe that occasional Marketing via Newspaper Inserts is good(Back To School etc.)BUT what about direct mailing small to medium businesses to hunt new Clients?
Is Staples involved in Marketing and advertising lunacy to forget marketing to their core that drives "90% of Staples profitability" according to Staples' President.
Staples has ZERO budget allocated to hunting new Small to Medium business clients via direct mail or any other source.
Somebody help me here.
Sorry to rattle on again...But this really bothers me and I am looking for help. Staples does have a 'Direct' marketing division...but it reaches EXISTING Staples clients...which is fine.
I am just looking for the answer to the question,"what does Staples do to advertise and market to potential NEW Clients from what obviously is their strongest profit source: small to medium businesses?"
The answer for all of those,like me,who own stock: NOTHING.
If anyone can tell me otherwise,please let me know here.
Thank you for the website, as a small business owner I never would have found out about the full range of Staples services had you not given me this website.
Factually,not one Newspaper that has arrived in my home(or my Mother's home in Florida) with a Staples insert in it has ever told me about this site...Get my Marketing drift?
However, a direct mailed flyer/circular program designed to reach small and medium businesses at their place of business would be the perfect media to add this website as a promotional tag.
The more I learn of Staples and its' wonderful broad range of services,the more I wonder why I never knew of these before...and the more upset I become at the tens of millions of dollars being spent by Staples to advertise in Newspapers reaching families in their homes.
Some comments that may clarify your points.
*SPLS does approach "the Doctor at a Chiropractic office with 12 employees" on a regular basis. In fact, they purchased a company specialised on that (Medical Arts Press) and are trying to sell office products to its large base of customers.
*From the fact that you did not receive any direct marketing piece from SPLS at your company you are deducing that they don't do that. The SMB unit is strong and growing. How is that being done?
*Regarding mass advertising, I tend to agree. It is probably most useful on special ocassions, and when done regularly (and with two competitors side by side) it probably loses the effect. On the other side, they probably pay very low prices for those ads.
Thank you for your insight. But I become more exasperated by the minute.
Staples purchases Medical Arts Press and then Markets to their Client base which covers a small portion of one SIC code! How does this add up to any circulation and or Marketing expense that remotely compares to the amount of money being spent inserting into Newspapers to reach my retired Mother in Florida?
My deductions are not made from the "fact that I did not receive any direct marketing piece from Staples". My deductions are made based on reality. The reality is that Staples SMB grows because they spend a good deal of direct mail money "farming" their existing Client base of SMB by mailing great Catalogs. But what about all of those millions upon millions of SMB that make up appx. 81% of the potential that are NOT current Staples clients? What does OUR Company do to gain new Clients? "Farming" is great but "Hunting" can be even better.
What would happen if Staples shifted some of their massive Newspaper expenditure to a geographically targeted,saturation direct mail program aimed at "Hunting" new SMB decision makers? I'll tell you what would happen...results,revenue and bottom line would all soar!
Staples also does a fair job of growing SMB Business via the internet and occasional demographic select Magazine ad buys(like Medical Arts Press). But Staples falls far short where it matters most: mass media.
Can anybody tell me why we are so sorely missing the Target?
I can't let one of this poster's other statements go unchallanged.
I question whether direct marketing through newspaper circulars reaches 96% of households. Maybe it reaches 96% of households that subscribe to a newspaper, but the percentage of households that subscribe to a newspaper is well below 96% of all households.
If this hyperbole goes unchecked none of us will know what's really going on.
I am noy getting the attention of any Marketing Folks...I do not know what I expected...maybe just a way to professionally vent a little...This might be my final post:
Here is an analogy. Staples is like a good NFL team,that could easily become a great NFL team.
Each year, Staples decides to focus its' offensive attack on a better than average running game and each year the team finishes above .500. Let's say at 9-7 (nine wins and seven losses).
Year after year, Staples grinds out yardage due to a good stable of running backs and a strong offensive line...and they barely make it into the playoffs only to lose in the first round.
One year, a new offensive coordinator arrives and takes a very close look at his team's focus. He takes a long hard look at their talent and sees that the quarterback all of these years that has been handing the ball off to the running backs is named Joe Montana...And that guy laboring on the bench getting little playing time has the name RICE on the back of his jersey(Jerry Rice). The coach watches these two in Summer camp and realizes what incredible talent they have.
The season starts and the coach decides to mix up his good running game with this exraordinary passing combo! and...Walla! A winning trip to the Superbowl results!
Now we all know that this was now how it happened for the old SanFrancisco 49ers. But here is the analogy specifics:
Staples is a winning team. But we are not a dominant team the way that we know all of our talent(great stores)should result in.
Each year Staples chooses to spend nearly all of its mass media money on newspaper inserting. We elect to stay with our running game. Year over year we succeed.
One day a bold Marketing Vice President decides to test a concept of de-emphasizing the old way(running game/newspaper inserting) and switch a good amount of money to test its' REAL talent: reaching SMB through mass media(direct mail) and opening up the talents of its passing game.
The result? Well everyone knows how I feel. Please do not get me wrong..I do not believe that we should drop Newspaper inserting altogether...merely have a balanced attack.
Although Staples focus is to generate more revenue through small business channels, it will takes time. For better or worse the small consumer is still a large part of their business, and the reality is that it will still remain a important part in the future. The company can not afford to drop the circulars in the newspapers when Wall St. measures a companies success on such metrics as Comp Sales and Sales Growth. Also losing customer base to ODP or OMX would would not be advised since they could be future "small business customers". It is all a balancing act so you must put your trust in Management until they prove otherwise. And thus far they have been on a tear so far, so sit back and enjoy the ride. Stock is up $1 today!
While I thank you for replying,you actually point directly to the problem. Yes, I agree "it ain't broke"...and neither is the team that limps into the NFL playoffs each year with the same old stodgy "grind it out approach".
The glaring lack of desire to target our key profit making center with mass media scares me and I fear for the future of a Company that elects to fail to mass Market to its core.
Let me remind you: Staples CEO Ron Sargent,"90% of Staples profits result from small to medium businesses." Yet Staples Marketing/Advertising spends ZERO per cent of its mass Marketing dollars(print,direct mail etc.)hunting for NEW SMB Clients!
What happens to Staples if ODP or OMX decides to launch a major direct mail campaign targeting SMB decision makers surrounding OUR stores?
So far neither of our major competitors have been smart enough to use direct mail to target small to medium business decision makers in a saturation manner in SMB-rich corridors.
There is a nationwide co-op direct mail program that covers 100% of the suburbs of America's Top 50 Markets(and many of the smaller Markets as well) which mails small to medium business decision makers. It contains ads and inserts from Fortune 500 Companies that desire to reach SMB decision makers at their place of business...if my guess is accurate,over 80% of its recipients are NOT regular Staples Clients. It is category exclusive for advertisers. It is lower cost than the $42.00 per thousand that we pay in insert fees for Newspapers to reach our secondary profit producer. Today,this program does not have an Office Supply Store chain as its' exclusive category holder...tomorrow it may have Office Depot for all we know.
You speak of Comp sales and Sales growth...just what do you think a program of this nature would do for OfficeMax....or OfficeDepot? These kinds of Marketing moves are critical.
If it ain't broke, our competitor might just come along and put their own fixes in place...this I fear.
Staples Business Depot does in fact market to the small business market. Every small business owner has a residence. Every employee of that small business has a residence. Why would they send one flyer to the business, when they can send one to each of the businesses employees? There is more chance that someone will read the flyer and present the offer to the purchaser of that business.
With new small businesses opening all the time, it would cost the company more to mail directly to the new businesses, and to directly seek out new customers this way, when it is easier, cost effective, and more efficiant to mail it to their homes instead. Also, Staples strives to market in the newspaper that has the most reach in any particular market; therefore the advertisments will go to everyone who subscribes, business and residence.
So, to sum this up, its not a waste of money to advertise in the Sunday Paper, everyone has a home, and thats the best way to reach people.
WOW. How could you be so far off base...it's all about the BUYER in the small business.
Here is an example: in Atlanta,Georgia there is a population of just under 4 Million. Let's say that equates to 1.3 million households(at appx. three people per residence).
Further, lets say that the Atlanta Journal Constitution has a 60% Market Share and their Sunday newspaper reaches appx. 800,000 households(roughly 60% of 1.3 million available). Let's guess and say that there are 100,000 small business owners and decision makers in that same 1.3 million household corridor(one out of every 13 has a purchasing voice in a small to medium business).
Now follow me please...If Staples pays $42.00 per thousand in insert fees and $38.00 per thousand in print fees(a total of $80.00 per thousand) to reach 800,000 homes via the newspaper,they have just spent $64,000(a week) to reach families in their homes. The simple math suggests that less than one in thirteen of the homes has a business decision maker in it!!! Why spend all of this money? And...why send THEM a Back To School insert(or any insert aimed at families on any given week) when they may not have kids and further may want to buy Office Furniture that week!?
Here is what we should do in the above scenario. First we create a retail flyer featuring products and services aimed at the small business decision maker. Next, we spend $32.00 per thousand to insert in a co-op small business direct mailer and the same $42.00 per thousand to print as above(total $74.00 per thousand)AND deliver by co-op mail to the 100,000 Business decision makers. OUR TOTAL COST TO REACH 100% OF ALL ATLANTA BUSINESS SMALL TO MEDIUM DECISION MAKERS: $7,400.!!!!!!!! A far cry from the $64,000. being spent weekly to reach people in their homes via the Newpaper. Also this scenario would deliver a customized,full sized small to medium business piece!
And this ladies and gentlemen is the problem...because THESE are the people that drive our stock prices up and make our profits together soar(90% of our profitability). Yet these are also the people that we have no MASS ADVERTISING PRINT STRATEGY TO REACH.
I am ashamed for our Marketing people.