DR Gives Positec a Big Edge1 Nov, 2012 By: Thomas Haire Response
Tom Duncan and his team look back on five years of spectacular success — and look ahead to building more leading power tools and top-notch campaigns.
Direct response marketing was critical to the building of our brands,” says Tom Duncan, president/CEO of Positec Tool Corp., the Charlotte, N.C.-based power tool manufacturer. “It gave us the platform to really drive the awareness and distribution of our brands. DRTV was the catalyst to getting our products on the shelves at almost every home improvement retailer in the country and ensuring that consumers would recognize and buy them.”
Positec was founded by Don Gao in China in 1994 and had great global success before Duncan came aboard in 2005 to start and build a branded business in North America. Duncan’s background with the Robert Bosch Tool Corp. made him a natural fit for Positec’s efforts to expand into the U.S. and Canadian markets. And Duncan’s leadership — as well as the powerful team of 120 employees in the market — has been crucial to the North American business unit’s growth into Positec’s largest.
It’s that team that he’s quick to give credit to, including: CFO Paul Tellefsen; Craig Taylor, vice president of marketing; Rhonda Tate, vice president of direct response; and Lindsay Hendricks, media manager. Response spoke with Duncan, Tate and Hendricks.
Tate helped build Positec North America from the ground up and has been instrumental in all 10 long-form DRTV campaigns that have turned the company and its two brands — WORX and Rockwell — into household names. Hendricks, meanwhile, is a 14-year DR industry media expert with both agency and client-side experience who joined Positec earlier this year and has helped expand its media strategy in a number of ways.
Today, the company is focused on the long-form campaign for its WORX GT 2.0 — “actually the third iteration of our flagship DR product,” Tate says — as it maintains its strategy of DRTV sales success that drives brand and, eventually, retail success.
Learning the Nuts and Bolts of DR
Since its founding in 1994, Positec has expanded to include more than 3,000 employees in 12 countries around the world. Gao’s initial vision of “positive technology” (hence the name Positec) reflects the company’s commitment to cutting-edge innovation and design of power tools, lawn and garden equipment, and accessories — coupled with a desire to have a positive impact on people’s lives and the environment.
When the company looked to expand to North America in the middle of the last decade, Duncan was a natural choice. “My fundamental role from the start has been to build a thriving brand business and a company where people enjoy coming to work every day,” he says.
Duncan’s years with Bosch were a huge driver — both for him and for Positec’s vision of a business in the U.S. and Canada. “I was vice president of sales and brand marketing, and had spent 13 years there,” he says of his time at Bosch. “I learned about the importance of brands. I learned that brands are built on two defining elements: the quality of the product and the service you provide to your customers.”
When Duncan joined Positec, one of his first calls was to Tate, whom he’d worked closely with at Vermont American Tool Co., which was co-owned by Bosch and Emerson Electric. There, she’d worked under him on international accounts, mainly in Latin America (Tate majored in Spanish in college). Their paths had diverged when Duncan moved up the corporate ladder, but as Tate gained more experience by transitioning into customer service and brand marketing, her skillset became a natural fit for what Duncan was looking for in his new role at Positec.
“I initially headed up our logistics department,” Tate says. “But that changed when the WORX GT came along.”
Tate says that innovation was initially introduced to retail partners at Lowe’s, who immediately wanted to launch it under one of their in-house brands. The Positec team knew it had a great product on its hands, however, and didn’t want to private label it. “We had to find a way to get it in their stores under our brand,” Tate contends. “And that was when I was introduced to the world of direct response.”
Tate says the company had so little experience with direct response that when she was tasked by Duncan to look into utilizing the marketing method, her first step was to “Google DRTV.”
“We found our first contacts at a media company in Southern California, who linked us to a company that eventually became our production partner,” Tate says. “It spiraled from there, as we kept getting linked to contacts in fulfillment, telemarketing, merchant accounts and more. It was a real whirlwind!”
After months of preparation, the company tested the first long-form show for the WORX GT on March 3, 2007. “That morning, I remember saying to Tom, ‘Well, next week, either we’ll have a great job — or we won’t,’” she recalls with a laugh. By December 2007, Positec had sold 313,000 units of the product, accounting for $43 million in revenue.
Finding Out How It ‘WORX’
From that initial success, the Positec team gained a true belief in DRTV as a sales outlet and a brand driver. “I always wondered why some DR marketers spend so much money building awareness of their product names and don’t build a brand platform at the same time,” Duncan says. “We always felt like we could do both. We view our DR campaigns as an investment in our brands, as well as a way to drive sales.”
The initial success of the WORX GT campaign — “All nine of our shows since have been successful, but none like that first one,” Tate says — led the company to begin to look more closely at how it could control its campaigns. “In mid-2008, we tested a different media company and a different call center for the first time,” Tate adds. “We realized pretty quickly that successful campaigns become even stronger when more partners are added to the mix, giving everyone a chance to uniquely shine.”
Or, as Hendricks says, “Don’t put all your eggs in one basket — you have to manage every aspect of a DR-driven marketing plan like an investment portfolio.”
Still, product quality and customer service are the biggest keys at Positec. “We are a company that believes in our product,” Tate says. “Most of us own the products we sell and make. At the same time, we found out quickly that if we weren’t the first line of defense for customer service, there was a night-and-day difference. That’s why we now take 100 percent of our customer care calls in house.”
Hendricks adds, “We were so successful bringing customer care in house that we also now ship and fulfill our products, outsourcing as little as possible. We have two warehouses of product within five miles of our headquarters.”
Duncan says this is a rarity. “We are somewhat unique in the DR world in that we have our own factory and manufacture our own products,” he contends. “Our business model starts with buying raw material and ends when the package is delivered to the customer’s front door.”
Positec’s focus on each sector of its sales — from direct to online to retail — is also unique in this age of DR-to-retail marketing. “The DR business is seen as a standalone — it must be profitable on its own,” Hendricks says. “The retail sector of our DRTV campaigns is more of a hybrid, utilizing the efficiencies of buying DRTV media to achieve general advertising metrics and brand-retail exposure.”
Duncan adds, “Now that our brands enjoy extensive retail distribution, we take a more holistic approach to driving both direct and retail sales (see sidebar on page 22 for a full list of long-form DRTV-promoted Positec products), but still making sure not to lose the ROI model that we learned from direct response. Being a DR marketer is a distinct advantage over our other branded competitors in that we are able to interact with our customers every day. That source of knowledge and insight is valuable.”
That insight has allowed the company’s latest long-form campaign for the WORX GT 2.0 to get off to a great start. “We have changed the creative — getting some new life and a new look and feel from a new creative partner — and got folks who own the original product and the second version (WORX GT Lithium) to provide incredibly powerful testimonials,” Tate says.
Hendricks contends, “Even with a new iteration of the same product, we’ve seen response increase by more than 15 percent by the season’s end.”
Tate adds, “It’s a testament to the creative, the media strategy and the sustainability of the brand itself.”
Drilling Into the Numbers
“Because we employ DR-style marketing to build our brands, we learned very early to make sure that our creative and our back-end programs and service supported our long-term brand image,” Duncan says. “There are a lot of ways to make money in the short-term but destroy your brand for the long-term.”
Both Tate and Hendricks say the key to that is working with the right DR industry partners. Tate, in particular, says that it took some time for her to learn what made a great partner. “It was a shock to me in 2008, when we first tested new vendors outside of our original partners, that another vendor would beat their results. I’m a loyal person, so it really told me that my job was to look for what’s best for Positec first and foremost and treat our success like my own bank account,” she says.
Duncan adds, “We work side-by-side with many amazing DR partners who are critical to the success of our model. We find that the best partners are not the ones looking to sell more of their services, but rather the ones looking to sell more of our products.”
Today, Positec utilizes both LiveOps and Triton Technologies to handle its sales calls — and the relationship between the two vendors and Positec is a very open one. “We give them each a 50-percent allocation at the start of a campaign, and give them all of the same scripts, operator training and more,” Tate contends. “We then normalize costs based on results, and both companies see exactly how the other is doing. It allows us to hone in on the optimum allocation of our calls week over week over week. We think that competition drives performance for both partners and pushes them to be the best they can be.”
Hendricks has moved Positec’s media relationships in a similar direction since joining the company in February. While the company manages its per-inquiry (PI) work in house, it works closely with partners at Cannella Response Television, Cmedia and Euro RSCG Edge.
Tate says, “Before Lindsay, our media partnerships were mostly monogamous, and though we added an agency before she came aboard, we weren’t splitting campaigns. When Lindsay came on, we changed again, allowing our media partners to compete, one on one on one for the same show and in the same timeframe.”
Hendricks adds, “With the way we buy, it’s not about managing the media, but managing the agencies. They know we’re looking at it all the time and making changes dynamically. Now, when one agency partner comes to us with an excuse about low numbers, we can compare with our other partners and be more privy to what’s going on across the DR space. It’s made our agencies more accountable and our results better.” ■