Promotional postcards prove profitable, popular

Kurt Johnson had this promising idea for a new business: a generic website where smaller corporate clients could design their own promotional postcards, then have his company print and mail them at an affordable cost.

The only trouble was, given his background in sales and marketing, Johnson didn't know much about building a website or handling a bulk-mailing business.

Not to worry: For the website, he wrote a business plan that detailed the strategy and features he figured were required, then thumbed through the yellow pages and selected website designers at random. Despite the casual approach, he found a designer who gave him pretty much everything he was looking for.

As for the challenge of managing the business, he had a secret weapon named Phlayne Anderson with a long background in business administration and operations.

In mid-2002, they founded Minneapolis-based PostcardBuilder, a company that has accumulated more than 2,000 clients in virtually every state and has grown to nearly $4 million in annual revenue. And with sales in the first three months of 2008 running well ahead of projections, the partners expect the 2008 gross to significantly exceed their initial estimate of $4.8 million.

Included in the PostcardBuilder numbers since 2005 is revenue generated by a sister company, dubbed Printz, that offers online design and offsite printing and mailing of a broader array of direct mail and other materials -- business cards, posters and brochures.

That operation, which grossed more than $300,000 last year, is run by Johnson's wife, Stephanie Hansen, who is also a partner in the PostcardBuilder/Printz business.

It was a comparatively expensive process, however, which inspired the concept of a single, generic website and a limited choice of postcard sizes to assure small to midsized companies an affordable cost.

Thus, PostcardBuilder offers three sizes, from 4¼ to 5 1/2 inches in height and 5 1/2 to 11 inches in width. Once designed, the client's mailing list is uploaded to the central website, credit-card payment is completed online and printing and mailing is handled at PostcardBuilder headquarters.

The cost: 32 to 98 cents a card, depending on volume, card size and mailing class. A typical order of 800 5 1/2-by-8 1/2-inch cards would cost $600 for standard class mail and $680 for first class. Better yet, the company guarantees a turnaround of two days or less.

The PostcardBuilder website offers free graphics, including several thousand photos from which to choose, plus a dozen typefaces and the ability to move the images on the screen and position the type around them. Or, if clients prefer, they can upload their own photos, sketches and logos to tie the content even more closely to their companies.

Of course, if the clients are neo-Luddites like me (Luddite: Someone who is incompetent when using new technology, according to the online encyclopedia www.whatis.com), they can simply fill out a questionnaire, provide text and graphics and PostcardBuilder will handle the design free of charge.

If needed, the company also has five marketing people working with several vendors of business and residential mailing lists to help clients develop targeted mailing lists.

In short, things are humming along -- although not everything fell into place at once: "It took us two years to figure everything out," Johnson said. But considering that 70 percent of revenue is generated by repeat business, it appears they got something right.

Although the company was profitable in its first full year of operation, it wasn't until the second year that there was enough cash for the owners to pay themselves a salary.

Cash flow also has been an issue in the printing process. It wasn't until late in 2007 that PostcardBuilder stopped outsourcing the printing and began handling the jobs internally with about $450,000 of purchased and leased equipment.

And now, with cash flow improving, the company is planning a back-to-the-future strategy for luring large companies to the client list. The bait: custom-built websites that bigger companies can use to design their own direct mail for printing and mailing at the PostcardBuilder shop.

Dick Youngblood • 612-673-4439 • yblood@startribune.com