they’ve never taken short cuts on product or customer service in order to turn a dollar. Consequently, they’ve built a loyal following of customers, which has kept them in the black. Their customers are so loyal, in fact, that when the business partners opted to mail a newspaper of product offers–rather than a glossy catalog–this past Christmas season, their customers were even more responsive than they had been to the costlier book.
Experimenting for quality
The McWilliamses decided midway through last summer to shelve their Christmas catalog for the upcoming season, even after doing a lot of planning. They say they were concerned that the company wouldn’t have enough time to thoroughly prepare a book that would yield the biggest bang for the buck. “Before we went through the expense of creating a color catalog,” Dick McWilliams says, “we wanted to make sure it would be efficiently and cost-effectively produced. We decided that we really needed more time.”
In place of the glossy holiday catalog, Harbor Farm mailed a 16-page, two-color, tabloid-size newspaper that featured photos and copy blocks of many of their products. “We felt it would be better if we mailed our customers something that says we’re alive and still have lots of new things to offer,” Dick recollects. The revamped catalog performed well, enabling the McWilliamses to post an approximately $100,000 profit for 1993.
The McWilliamses felt they were in a relatively safe position to experiment with the new format since they carry almost no debt. And being virtually debt-free essentially relieves the couple of profit-or-perish pressures that other entrepreneurs endure from their financial backers, Dick McWilliams says. That allows them greater liberty to do whatever they want, whenever they want.
Enjoying business freedom
This freedom was part of the reason the couple left the faster business pace of metropolitan New York for Little Deer Isle, ME, in 1986 to sell Christmas wreaths through the mail. They started Harbor Farm in the classic entrepreneurial tradition of mail order: The company was conceived through brainstorming at their kitchen table and financed with their savings. They promoted their first wreath with a small ad in national magazines, including The New Yorker, Yankee and some newspapers.
Despite an overwhelming response, the initial venture lost money because of an inefficient fulfillment procedure. New to the mail order game, the inexperienced company had trouble filling the 2,800 orders it received–nearly 1,000 more than they had planned for. So they streamlined their back-end operations, suspended cold prospecting and the following year turned a profit of $5,000 with a direct mail piece sent only to buyers. In succeeding years, they gradually expanded their offerings with a larger variety of wreaths and assorted complementary products such as ornaments, country-style housewares, pewter goods and candles. Profits went from $35,000 in 1988 then rose to $40,000 in 1989, up to $47,000 in 1990 and up to $50,000 in 1991.
The following year, the McWilliamses produced their first catalog–a 32-page, digest-size book with more than 75 products. The premiere edition was mailed to 150,000 customers and prospects in the fall, pulling a 2% response rate. Later in the ’92 holiday season they mailed the more copy-intensive newspaper–which was considerably cheaper to produce–to their most loyal buyers. Surprisingly, the newspaper outperformed the catalog, drawing a 3% response. “The romance of the copywriting for products in the newspaper,” Dick believes, “carried through to sales.”
Given the success of their experiment, they plan to mail another newspaper this spring, then come back with a 300,000-plus catalog mailing in the fall that will go to both their longstanding customers and prospects they generate through list rentals and magazine space ads. But even though the catalog will return next year, they’re keeping their sales projections fairly conservative. They’re planning for 1994 sales of $550,000, just 10% greater than 1993. But Dick hedges about the projection: “The catalog could conceivably do much more than that.”