Home is Where the Mag is

Home is Where the Mag is

ENTREPRENEURS by Jean Gruss | Editor/Lee-Collier

Would you read a magazine that has nothing but advertising? A trio of South Africans proved it can work in the U.S.

How did The Home Mag get so big?

The Cape Coral-based free monthly magazine that advertises home-improvement contractors now appears in the mailboxes of 4 million households in Southwest Florida and beyond. To put that in perspective, USA Today's total daily circulation is 2.3 million and Time magazine's weekly circulation is 3.4 million.

Credit the booming success to the drive of a trio of South Africans who set their sights on growing a business in the U.S. A husband-and-wife team, Sean and Debbie Campbell, and friend Ralph Harris, have been partners in The Home Mag since they published the first issue in July 2002 in Lee County.

When you ask them about their success, the first answer you'll get won't have anything to do with magazine advertising, paper quality or circulation. "The reason we can do this is we have the right people in the right seats," says Sean Campbell.

Campbell and Harris are fans of a system called Wealth Dynamics, which uses psychometric testing to determine personality, strengths and other traits that can tell where a prospective employee might fit well in the organization. "It's become almost a corporate culture," Harris says.

Building the team comes before everything. Campbell becomes visibly annoyed when anyone credits him alone with the success of The Home Mag. "It's not my brainchild," he says, waving his hand dismissively.

In fact, the original idea came from Trevor Roberts, who created the genre in South Africa with a publication called Homemakers Fair. "It's a proven thing," Campbell says. "We've taken it to a whole new level."

Campbell and Harris thought a similar publication would do well in the U.S. and they enlisted Roberts to help them get it started. Success was immediate. By the fourth issue it increased its frequency from quarterly to monthly and mailed to 150,000 homes in Lee County.

With their team of about 18 employees, they've focused on their customer: the home-remodeling contractor. You won't find pizza restaurants or oil-change advertisements. And the magazine never exceeds 60 pages so that advertisers don't get lost in the mix. Editors maintain a tight rein on the content, designing the ads so the quality is uniform. The Home Mag recently started providing advertisers with a special toll-free number that readers can use to call them. This allows them to track the results of their advertising.

The company is now franchising its concept and it's now published in 19 locations. Campbell and Harris have identified 180 markets in the U.S. where The Home Mag could be successful. "We want to sell 30 franchises next year," Harris says. Another 30 publications would boost monthly circulation to 8.5 million, or 102 million annually.

Campbell says he's capitalizing on a trend in home improvement in which young professionals in particular demand the latest interior designs. "The younger people are worse than us," marvels the 43-year-old. He says the Miami magazine once advertised a marble driveway that generated calls.

Harris and Campbell decline to reveal revenue figures for the privately held business, but Harris says they'd meet the threshold of the Inc. 5000, which last year was $2.4 million.

To America, via the Caribbean

Campbell and Harris, both born and raised in South Africa, wanted to move to the U.S. to satisfy their entrepreneurial urges. Both decided the Caribbean would be a good gateway to the U.S. Harris became a dive instructor on a yacht and Campbell ran his own 45-foot catamaran charter in the British Virgin Islands.

"The whole goal of going to the Caribbean was to save money," Harris says. They would earn money in U.S. dollars, which they could use to get established in the U.S.

In the Caribbean, they figured they'd eventually meet Americans who would help them get to the U.S. In 2000, Cape Coral homebuilder Don Koogler chartered Campbell's catamaran and the two struck up a friendship. Koogler suggested Campbell visit Cape Coral, urging him to buy residential lots there.

With the residential boom underway, Campbell called his friend Harris and urged him to move to Cape Coral, which he did in June 2002. They enlisted the help of Trevor Roberts, the creator of the similar and very successful magazine in South Africa to help them launch The Home Mag.

Together, they produced the first Home Mag in July 2002. It featured the locally known builder Koogler on the cover, which helped them sell ads in the first issue. That first issue cost Campbell and Harris $40,000 to produce and distribute to 100,000 homes in Lee County. Subsequent issues paid for themselves, relieving the partners from having to go to the bank to get a loan. They started with quarterly issues, but business was so good that they began to mail monthly issues starting in March 2003.

Campbell and Harris learned the business quickly. "It was all a matter of learn as you go," Harris says.

Focus on the customer

The Home Mag doesn't publish an advertising rate sheet to leave with prospective advertisers. "We don't leave anything behind," Harris says. Instead, they explain to advertisers what kind of return they'll get on their investment. For example, a full-page ad in The Home Mag costs about $3,000. That may sound like a lot of money, but take the example of a pool contractor: If he nets $3,000 profit for every pool he builds, then one ad in The Home Mag should pay for itself with just one customer.

That's where the magazine's customer focus becomes clear. Last year it instituted a system that gives every advertiser the option to have calls routed through a toll-free number printed on the ad. Although advertisers often insert a coupon with a code to track their advertising efforts, the toll-free number helps them track the response and improve their sales.

The magazine won't accept advertising from anyone other than home-improvement contractors. The goal, Campbell says, is to inspire people to improve their homes. A pizza coupon or a discounted oil change doesn't fit that mission. What's more, the magazine won't grow to more than 60 pages so that advertisers won't get lost in a sea of competitors.

You won't find any text in The Home Mag. It's all advertising that's photo-driven. "We don't have advertorial because it doesn't inspire," Harris says.

The exception is a crossword puzzle that's in every issue. Designed by the staff of The Home Mag, the puzzle contains words found throughout the issue. Once a person has solved the puzzle, they can mail it in and be eligible to win $100. This has two purposes: it encourages readers to flip through the magazine and read the ads for clues and it serves as a feedback mechanism. At the bottom of each puzzle is a space for reader comments about service from an advertiser. As many as 4,000 readers mail in the completed crossword puzzle each month.

Prospective customers were skeptical at first about whether a magazine without any editorial content except a puzzle could attract new business. But once the phones start to ring with new customers, they're hooked.

"It's worked well and it kind of blew my mind that it was a magazine only with ads," says Bill Daubmann, owner of Mr. ShowerDoor, a shower-door manufacturer and installer in Naples, Fort Myers and Sarasota. Mr. ShowerDoor was on the magazine's November cover for Lee and Collier counties.

"Our ads are response-driven, as opposed to brand building," says Campbell. The magazine focuses almost exclusively on the local entrepreneur. "The Home Depots don't have the creativity," he says.

The current residential real estate downturn is not hurting business. "Hard times are when people sharpen their blades," Campbell says. The Home Mag takes payment up front from advertisers with a credit card, relieving them of chasing down customers who don't pay.

Find good lists

The key to finding customers is to develop good mailing lists. "It seems to be hitting the right zip codes," says Mr. ShowerDoor's Daubmann, who includes a discount in the ad with a code that links it to The Home Mag.

They avoid sending magazines to condo owners because it won't help the outdoor contractors such as pool builders who advertise. Harris says they buy lists and then edit them to find the customers most likely to buy from their customers. "Our job is to get the phones to ring," Harris says.

Targeting the top end of each market requires knowledge of each location. For example, the threshold for disposable income could be $250,000 in Orange County, Cal., or it could be $45,000 in Lee County. "You can't even look at disposable income in some areas; you have to drive," Harris says. In Naples, for example, wealth can't be measured using disposable-income data because the wealthy neighborhoods are full of retirees.

The distribution lists are valuable when it comes to selling franchises. A franchise costs $68,000 for a 150,000-circulation area and a franchisee pays 6% royalty and a 2% advertising fee on sales.

Armed with good lists that generate business for advertisers, publishers can mail other publications. That's a fact that's not lost on Campbell and Harris. "We're going to bring out other magazines," Harris says, declining to elaborate.

Look for them in your mailbox.

REVIEW SUMMARY

Company: The Home Mag

Industry: Publishing

Key: Get the right people in the right seats.