There’s a lot of empty space at Money Mailer LLC’s new Garden Grove headquarters. Sections of the direct mail company’s 192,000-square-foot building are vacant, with never-been-used chairs and cubicles scattered under the glow of florescent lights.
Money Mailer is looking to fill those seats.
Since moving Money Mailer’s operations this summer, the company is gearing up for growth.
“There’s a reason why we moved our corporate office to a larger building,” said Chief Operating Officer Steven Gray. “We’re on a growth kick. Soon all of that empty space will be filled.”
The company previously had been in a 130,000-square-foot facility, also in Garden Grove.
Money Mailer, which generates about $125 million in yearly revenue, is eyeing $300 million in sales in five years.
The company plans to beef up its sales force and invest in technologies that will allow it to advertise through e-mail and text messages.
Money Mailer, which is owned by Atlanta-based private equity firm Roark Capital Group, counts about 500 workers.
About 200 of them work at the company’s office and production plant in Garden Grove, where coupons for everything from insurance to pizza are printed, cut and packed into red, white and blue envelopes and mailed to more than 21 million homes in the U.S.
The other 300 work at a production plant in Virginia, and offices in Georgia and Florida.
Money Mailer plans to open more facilities in some cities throughout the U.S. during the next five years, Gray said.
The company already counts about 300 franchises in 33 states. The franchises are independently owned and operated. They sell advertisements to local businesses and mail coupons 10 to 12 times a year to about 50,000 households in their designated territories.
Opening its own group of facilities will help Money Mailer generate more advertising revenue from local, small businesses and large companies, Gray said.
“Franchisees control how many advertisements they sell and how often they mail,” he said. “With our own franchises, we’ll be able to generate more sales and control the frequency of how many coupons we mail and how many households we mail to.”
The company is currently scouting for real estate in metropolitan cities.
It recently opened a company-owned facility in Baltimore, and is looking for workers to staff there, Gray said.
The company’s still working out how many it will open. Gray declined to disclose how much money the company plans to invest in opening facilities.
One investment is certain: new technology. Money Mailer plans to invest millions in technology that will help the company disperse advertisements through e-mails, text messages and other methods, Gray said.
Advertising through the Internet and mobile phones should help the company stay competitive with rivals such as Valpak Direct Marketing Systems Inc., part of Atlanta-based Cox Enterprises Inc., Irvine’s Mini-Mailers Inc. and others, Gray said.
“The industry is moving into mobile phone and Internet marketing. You can target more consumers faster in a cost effective way,” Gray said.
Money Mailer, like others in the $62 billion yearly direct mail business, is trying to drum up profits while juggling the rising cost of postage rates, paper, ink, energy, employment and insurance.
“We’re trying to adapt to market conditions, which means we have to become more creative about the way we do business,” Gray said.
Although the direct mail industry has its share of challenges, sources indicate that the business is growing.
Massachusetts-based research firm Global Insight Inc. estimates that in 2007-08, direct marketing will represent more than 50% of total advertising spending in the U.S.
Factors that are fueling the direct mail business include the Federal Trade Commission’s National Do Not Call Registry act, which bans telemarketers from calling households on a list. The act has pushed many companies to advertise their goods by e-mail and direct mail, Gray said.
Companies are also opting for direct mail marketing because it’s less expensive and easier to track than television and radio advertisements, Gray said.
“Direct mail allows a company to track whether its advertisements are working because it’s measurable,” he said.
A growing number of coupon users could also bolster the business, Gray said.
Roughly 85% of the U.S. population are coupon users, up 10% from 2006, according to the Association Coupon Council.
With a credit crunch affecting the way consumers are spending, coupons could become a popular way to save money.
“Consumers are always looking for ways to save money and it’s happening now more than ever,” Gray said.
Like other businesses, Money Mailer is looking to cut down its own costs by streamlining its operations with more technology, Gray said.
While Orange County is an expensive place to operate a business, Gray said that the region’s abundance of businesses and talent pool has kept it from moving its headquarters out of state.
“Orange County has been good to us,” he said.
