The Great Recession has brought pain to many businesses and changed the landscape in some industries. But it has also created some new opportunities.
Sliding revenues put a crimp in marketing plans of many small businesses just at the moment they needed help most. And that disconnect is the launching point for The Marketing Department, a franchised approach to brand development and marketing aimed at the small business sector that has made its Connecticut debut.
Philadelphia-based advertising executives John Cooley and Rich Caserta developed the concept for TMD in 2008. With the national economy turning sour, they recognized that small businesses, start-up firms and entrepreneurs with modest budgets couldn’t afford to staff a marketing department or hire an ad agency.
Cooley’s timing could not have been more perfect. Small businesses were looking to rebrand themselves to attract new customers while start-ups needed customized marketing materials.
Within 18 months of opening the first store, more than 250 small businesses had participated in the company’s complimentary marketing consultations. About 90 percent of them have used TMD for everything from logo designs, brochures and marketing plan writing to website development, said Cooley.
“If there was a time in our country’s history that our concept was needed, it was then,” said Cooley. “Since our inception, we helped transform over 600 small businesses.”
Cooley said his vision for the company is to help bring Madison Avenue to Main Street and “generate the same level of strategic brand thinking and world class creative execution as the best agencies in the world. We
want to be the Ogilvy for small business.”
Now the marketing chain plans to open as many as 500 new centers across the U.S. over the next two years, said Cooley. TMD already operates nine offices in four states: Colorado, Connecticut, Pennsylvania and Texas.
Franchisee Vince Calio opened a TMD center in Shelton last month. He said he is close to securing a handful of local business clients.
Calio, who holds a bachelor’s degree in fine arts from Pratt Institute, has 30 years of experience in planning and directing corporate and brand identity programs for a broad range of companies.
“There is a real need among small business owners and entrepreneurs for experienced and affordable marketing and branding expertise,” said Calio. “TMD specifically tailors its services to assist small businesses. Whether clients need a logo or a website, or a comprehensive marketing plan, we can handle it all.”
Calio learned about TMD when he ran into long-time friend and industry colleague Cooley last year. He was hooked from the get-go.
“We have a full menu of services, and our pricing is completely transparent. Clients know exactly what they are buying and exactly how much it will cost,” said Calio.
The company’s business model is to open local centers in high-profile retail environments or office suites. Similar to the H&R Block concept, Cooley and Caserta came up with the idea of a storefront or office setting from which marketing specialists can assist small business owners.
“Most small businesses and early-stage companies cannot afford to hire a chief marketing officer, staff a marketing department or hire a big ad agency,” said Caserta.
“The Marketing Department is a local office structured to serve as a company’s marketing department,” said Caserta. “Our name is exactly the role we play with customers.”
Caserta added that TMD executives often serve as an outsourced director of marketing working on-site at a client one or two days a week.
The TMD office then becomes the client’s marketing department providing services such as logo development, website design, copywriting, collateral production and all creative execution.
“We offer three levels of involvement ranging from director of marketing to chief marketing officer, depending upon scope of work and needs of the client,” said Caserta.
“Imagine having an experienced marketing professional who will listen to you and develop a strategy and solutions tailored to your needs and budget constraints,” said Caserta. “And then be available to work on-site as the outsourced marketing director. For the small business owner who has been going it alone, this is a fantastic opportunity.”
When a business customer visits a retail center, they are greeted by a message board that lists the prices of the various marketing department service, which include print advertising, direct mail, website development, logo design, business cards, stationery products, brochures and other printed materials.
Each customer receives a free one-hour consultation with a certified marketing executive and can access TMD for its service on an as-needed basis or by way of a retainer, said Calio.
“At a traditional marketing firm, you develop ideas and submit a proposal to the client that details the scope of the work,” said Calio. “The price is usually determined by the number of hours you think it will take to do the job. From there, it can take four to six weeks to turn it around back to the client.”
Small businesses can get a customized logo from TMD for as a little as $500, according to Calio.
“It’s not unusual for a company to pay $15,000 to $45,000 for a logo redesign,” he said. “Small businesses like the ones we work with can’t afford that.”
Mary Schramm, assistant professor of marketing and advertising at Quinnipiac University’s School of Business and Engineering, believes The Marketing Department’s model could be a positive solution for small businesses.
“If the cost is truly lower and clients can access this company easily, this could give small businesses a way to utilize marketing services they couldn’t afford at a full-service firm,” said Schramm.
“Consumers are comfortable with doing business with franchises today, but a company like H&R Block, for example, has been around a long time and has a solid reputation,” said Schramm.
“TMD, like any new company, has to establish a presence and become known,” said Schramm. “The main question I have is how much expertise does this company have?”
Cooley agrees talent is the key to success. He believes that by offering top-notch marketing services through “managing partners” with high caliber of experience and talent, they company can grow to be one of the largest ad agencies in the U.S.
Cooley said Connecticut offers great opportunity because there are many start-up and emerging companies that need quality marketing services at affordable prices. He plans to open a TMD center in every major market in the state — 10 units in 3-5 years.
The ideal investor is a marketing or advertising executive in transition – entrepreneurs who want to own their own business, and industry leaders who are retired or unemployed.
The franchise fee is $19,900 for a retail, Main Street style location. The franchisee pays $29,900 if they set up the business in an office complex. Total cost to open an office including a franchise fee, layout, equipment and furniture ranges from $91,750 to $146,000.
After a 3-5-year ramp up, a mature office’s average revenue is projected at $750,000 to $1 million, acording to Cooley. Mature TMD centers generate one or two sales per day and average $2,500 per transaction. TMD takes a 33 percent revenue split and charges a 4-percent fee based on all revenue for marketing and advertising resources.
TMD can offer its services cheaper and faster than regular advertising and marketing agencies for two reasons, according to Calio. First, TMD has a menu of five or six options for each service a small business customer might request.
That eliminates the costs of starting the creative process from scratch and allows customers more freedom to customize their package, said Calio. The company’s second advantage over traditional marketing agencies is that all of the creative work is done at the company’s centralized creative center, which employs a staff of art directors, graphic designers, web designers, programmers, copywriters and project managers to oversee every request.
TMD promises to provide customers with preliminary design ideas within 48 hours of the initial meeting.
Franchisees can choose between opening a 1,200- to 1,500-square-feet Main Street-style retail center or a suite typically located in a second-floor office complex.
There are currently 28 million small businesses across the country, with new entrepreneurial ventures starting every day. Small business spends an estimated $50 billion on marketing each year.
Cooley said the franchise draws investors between the ages of 32 and 62 who have work experience in the advertising, public relations, sales and marketing industries. Franchisees include retired professionals, married couples working together and corporate execs looking for new opportunities in a related field.
