It’s happened to all of us. Dinner is on the table. The whole family is present. Then the phone rings. A saccharin-voiced caller asks for you. And though you can’t place the voice, you immediately recognize the pitch.
Ed Schultz of Bloomingdale sympathizes.
“There are some real privacy issues involved with telemarketing. Direct mail, however, is not obtrusive,” insists Schultz.
And Schultz speaks from experience as founder and owner of ISA Direct Inc., a $10-million-a-year direct mail company, headquartered in Lombard. Each day, ISA Direct mails more than a million pieces of what the public calls junk mail. Whether it’s sweepstakes notices, auto maintenance reminders or actual bills, ISA Direct does it. And that capability has landed Schultz clients like Publisher’s Clearing House, Amoco Motor Club, Chrysler Corporation and J.C. Penney.
Though ISA Direct’s clients seem pleased, the public, ultimate recipients of ISA Direct’s mass mailings, doesn’t always share the sentiment. Schultz is sensitive to that.
“I belong to the Direct Marketing Association (DMA). They provide lists of people who wish to be deleted from direct mailings. This not only helps the consumer, it keeps my costs down,” he explained.
Since the 1970s, the DMA-compiled lists have been avaiilable to direct marketing firms for a fee. Consumers can be placed on the list at no charge.
“We have become a staple in the direct-marketing industry,” explained spokesman Chet G. Dalzell, from DMA’s New York City offices.
For Schultz, the day begins at ISA Direct’s corporate and computer headquarters in Lombard. The lobby, bathed in light, decorated in soothing pinks and beiges, reflects Schultz’s attention to detail. The large bronze eagle mounted behind the reception desk symbolizes the company’s philosophy. As Schultz sees it, the crafting of the eagle from clay to final bronze is symbolic of the company’s humble rise to success. The eagle also symbolizes a strong America, something that’s important to Schultz.
“Only in America could I form a little tiny company like this that services such giants,” he stressed.
It all began in 1981 when Schultz started Horizon Business Forms, a distributor of printed business forms. At the time, he had 11 years of experience in the industry, having become a salesman in 1970 for Standard Register Company in Chicago. In 1976, he had become a vice president at Unlimited Printing & Systems, a printing distributor in Arlington Heights.
During Horizon’s first year, Schultz and his family lived off their savings, funneling company profits into their fledgling operation. By 1983, Horizon was thriving. At that time, Schultz renamed the company Horizon International and turned it into a direct-mail agency where he solicited clients and then had materials printed by outside sources.
But there were problems.
“The sources we were using for imaging and computer services were either overbooked or had preferential ideas about who should handle the work. In other words, they felt I couldn’t handle large accounts, like Amoco,” explained Schultz.
That didn’t stop Schultz. In 1983 he took out a business loan, bought a $1.5-million ink jet imaging machine and started a second company, Imaging Sciences of America. John Ekizian of Barrington and Harlan Burgess of Oak Brook joined Schultz as investment partners. His goal was to produce his own direct-mail materials and eliminate the need to broker the work.
In principle, it made sense. In practice, there were complications.
“We had no reputation, no staff and no experience running equipment. Still, I thought I could just go out, buy a machine, put paper in one end and have it come out the other end,” Schultz confessed, with a laugh.
Schultz soon realized there was more to operating the business. And he discovered Imaging Sciences of America was ill-equipped to meet the demands. By 1985, the company’s startup capital was gone. The firm’s net worth had plummeted to a negative $750,000. And to make matters worse, the bank that held his loan told Schultz to go elsewhere.
“Our payments were on time, but I guess having a negative net worth didn’t look good,” he added.
In desperation Schultz sold half of his interest in Horizon International to Charles Delachapple of South Barrington and Bill Hess of Myrtle Beach, S.C. Unfortunately, that transaction didn’t generate enough funds to pull Imaging Sciences of America out of trouble.
Luckily, a friend, Bruce Taylor of Cole-Taylor Bank in Wheeling, came to the rescue. He introduced Schultz to Richard Carosella, another direct mailer who wanted to become more specialized. The trouble was Carosella didn’t know how to go about it. By this time, Schultz had learned. The timing was perfect. Within six weeks the men became partners in Imaging Sciences.
In 1987 Schultz sold the rest of his interest in Horizon International to Hess and Delachapple so he could focus efforts on Imaging Sciences of America. Gradually, the company recovered. By 1989 it was doing so well that Schultz bought out Carosella and abbreviated the name to ISA Direct Inc.
“It was a very appropriate date, July 4, 1989. I started my first company on July 4, 1981, signed my partnership agreement on July 4, 1985 and then dissolved it July 4, 1989,” he said.
In 1992, Schultz received the Emerging Entrepreneur of the Year award from the Du Page Area Association of Business. And on Oct. 21, Schultz was honored as one of this year’s inductees into the Entrepreneurship Hall of Fame. The event was sponsored by the University of Illinois-Chicago College of Business Administration and co-sponored by William Blair & Co., Arthur Andersen Enterprise Group, La Salle National Bank and Reliable Corp.
Beverly Parker, associate director for The Institute for Entrepreneurial Studies at the University of Illinois at Chicago, which selects the Hall of Fame winners, said inductees are nominated by either family, friends, employers or employees and selected based on their past and present business successes. Some of the areas important in that selection process included innovation, profitability, employee and customer relations, marketing success and contributions to society.
Parker remembers Schultz in particular based on his actions at the award ceremony. “Though Mr. Schultz purchased an entire table’s worth of dinner tickets, he only used half. The other half he donated to university students working on their MBAs. The students joined him for dinner and were encouraged to send Mr. Schultz their resumes. It made quite an impression with the students,” said Parker.
Schultz attributes the company’s success to his freedom to pursue his own marketing philosophies unfettered by the limitations of a partnership.
But even with the successes the company has enjoyed, Schultz, 49, a grandfather and father of two grown children, still puts in long hours. His high school sweetheart and wife of more than 20 years, Janet, said he has always been a hard worker, and though the road to the top was rough, she isn’t at all surprised by her husband’s success.
“Ever since I’ve known Ed, he’s been one step ahead of everyone else,” she said. “He’s made some really hard decisions along the way, but I’ve never doubted him for a minute. I have complete faith in everything he does.”
The feeling, is mutual.
“Janet helped me work through college,” said Schultz, who graduated from Northern Illinois University in De Kalb with a degree in management and minors in finance and economics. “Today she assists me in a very important way. If I can’t make a decision on something, I go to her. Being fairly detached from the business, she can be objective about the situation. As a result, she comes up with some really good advice.”
But Janet Schultz isn’t just a sounding board and confidante. She’s responsible for the interior decorating of the Lombard offices, handles travel arrangements and even prepares some of ISA Direct’s business lunches, which are held on site.
“This is very much a family venture. We’re all involved,” she said.
That family involvement includes their son, Todd, 25, of Chicago, a graduate of Arizona State University. He is ISA’s assistant director of management.
“Todd does an excellent job. I’d hire him even if he wasn’t my son. Probably wouldn’t pay him as much though,” joked Schultz.
The couple’s daughter, Doreen Wagner, 23, of Bartlett, administers the company’s insurance program while working from her home part time. “She went out and found us a whole new insurance program at renewal time. She improved it dramatically,” Schultz said. Doreen’s husband, Steve, is a computer programmer at ISA.
“Dad and I don’t actually work with each other that much,” said Doreen, the mother of two young children, “but occasionally, I will have to get his advice on something. It’s still kind of awkward calling the office and asking for Ed.”
A short walk down the plush hallway of the Lombard offices leads to the pulse of the business, a locked, glass computer room, lined with hundreds of precious reels of client information. The information comes to ISA Direct by computer modem, satellite transmission or mail. It is transferred to computer disk, fed into the company’s main computer and channeled into either a laser printer (for letter quality work) or ink jet imager (used for “slick” mailings like Chrysler’s auto maintenance advertising coupons).
“The clients often provide us with mailing lists,” said Schultz. “Then we take a printed roll of paper, put your name on it, your address, perhaps your sweepstakes numbers, all of that. Then the roll is trucked to our distribution center in Montgomery where we put it in envelopes, stuff it with additional inserts, sort it and mail it out.”
Schultz, an energetic man with a quick smile, makes it sound simple. But the simplicity of his operation actually involves the most advanced technology available. From warm fusion imaging machines and laser printers to high-speed binders and computers, ISA has it all.
“Our imagers can drop 80 million droplets of ink per second on paper that’s moving at 40 miles per hour underneath it. And they don’t use freon gas, like cold fusion imagers, or solvent-based inks. Everything is environmentally safe. And all waste paper and used ink is recycled,” Schultz said.
In the rear of the building, a plastic fringed curtain leads to the soul of the operation. There, ISA’s immaculate factory hums with activity. Enormous reels of printed paper sail into the waiting orifices of ISA’s ravenous machines, which appear to have lives of their own.
But Schultz and his employees know better. All have seen these monsters carefully rolled into place, calibrated and monitored by skilled technicians. It’s a crucial step because ISA Direct will give these giants of technology quite a workout.
“At ISA Direct, these machines have to be able to do the same thing, consistently, 200,000 times a day, a million times a week,” Schultz stressed.
ISA Direct Inc., like many in the industry, offers something called personalization. Schultz said it is the key to success in the direct-mail industry.
“Personalization involves targeting very select marketing groups. For instance, when Chrysler sends maintenance coupons to customers, we have to include the make of the car, year, owner and the nearest dealer location for that customer, including a local map,” said Schultz.
Personalization may require a direct mailer to provide special envelopes, enclosures and printing styles. Schultz does, and he works closely with clients on the development of new techniques.
“Basically, I sought Ed out because he’s a very dynamic, forward thinker,” explained Tom Lagan, vice president of operations for Publisher’s Clearing House in Port Washington, N.Y. “I can go to him with an idea and he’ll develop it, design it. I’m just the catalyst. I’ve tried to instill that thought process in all my vendors. Not all of them, however, follow the lead.”
Another customer, the Amoco Motor Club, was not as receptive to ISA’s overtures. Schultz admits he had to bug them a bit before they opened their doors to him. But that tenacity proved mutually beneficial.
In 1983, the Amoco Motor Club was using a perforated, paper membership card. According to Schultz, the company wanted something more durable and that would be attractive to members. Schultz approached a number of plastic manufacturers, worked with them and helped develop a new membership card, roughly half the thickness of a credit card.
“The card Ed developed for us is very durable, professional and smart-looking,” said Jim Stowasser, manager of Amoco graphics and print production in Chicago. “And the process he developed for the card has kept him abreast of the technology.”
ISA Direct is even responsible for creating a common bond between lawyers and doctors.
“Every physician in the country carries something from us: their American Medical Association membership card. Now, we’ve been approached to do the American Bar Association’s membership cards as well,” explained Schultz.
Competitors have words of praise for Schultz’s operation. “Though this is a dog eat dog business, we often have to network to complete a large job for a client. For instance, we may provide the advertising inserts, ISA the personalization and someone else the distribution. We have worked with ISA in the past, and our relationship is a friendly one,” said Steve Schmidt, vice president of marketing for Berlin Industries in Carol Stream.
Though some might consider ISA’s end product junk mail, Schultz said when he goes to the mailbox at home and finds it crammed with ads, he looks at it with an analytical eye. He said he’s intrigued by the mail he gets, often responds to it.
The final phase of ISA Direct’s operation is handled out of its new 100,000-square-foot facility in Montgomery, which opened in September. Sometimes 10 U.S Postal Service tractor-trailers are needed to haul away the massive daily mailings. To handle that staggering volume, the Postal Service placed a post office on the Montgomery site.
When the mailings from Lombard arrive in Montgomery, they are cut, trimmed, folded and stuffed into envelopes. Occasionally an insert supplied by the client will be enclosed. Then the mail is counted, sorted, bagged and weighed. At this point it is given to the site postal worker.
Using government regulated scales the postal worker reweighs the mail, calculates the appropriate bulk mail postage and places the mail on waiting trucks. And, according to Mickey McWilliams of Aurora, the current site postal worker, there have been only a few discrepancies.
“Occasionally, humidity will cause a weight discrepancy. But most of the time, we agree. This is one of the most accurate companies I’ve ever worked with,” McWilliams said.
Scott Pearson, head of ISA operations in Montgomery, is proud of that reputation.
“The real heroes here are the workers themselves. In Montgomery we have about 200. In Lombard I think we have about 100. Nothing would be possible without them,” said Pearson.
With 300 dedicated employees and the latest technology at the throttle, Schultz can finally relax a little. His favorite retreat is the family cabin, nestled in the Wisconsin woods, overlooking Lake Beulah, 15 miles north of Lake Geneva. But even there, Schultz doesn’t really escape the business.
“I have a computer, fax machine and office with a spectacular view. It’s perfect for writing trade articles and business brochures,” said Schultz.
Occasionally, Schultz takes a real vacation, though his require stamina. Not content to loll on a white sand beach, Schultz finds scuba diving off the British Virgin Islands with Project Ocean Search, an expedition headed by Jean Michel Cousteau, more to his liking. He also enjoys skiing.
“I like the tops of mountains, the bottom of the sea. I guess you could say I like extremes,” he confessed.
Nowhere is that more apparent than in his savvy approach to business. In just under nine years, Schultz has gone from near bankruptcy to industry mogul.
He admits it still humbles him: “I still find this all hard to believe. And I find myself saying, `Is all this really mine?”‘
