Signmaker VictoryStore.com Customizes Politics for Front Lawns

Steve Grubbs was an Iowa state legislator and chairman of the state’s Republican Party before launching his specialty sign company, VictoryStore.com, in Davenport, Iowa in 2000. His wife, Kelli, is an attorney and co-owner. She’s also a partner in their political consulting business, Victory Enterprises. They decided to start their product-based business when political clients kept asking where they could buy yard signs.

VictoryStore.com employs 90 and is on track for $20 million in 2010, its best year ever, up from $11 million in 2009. The Grubbs expect to put 5 million campaign signs on American front lawns during this election season -- although not all come in familiar rectangular shapes. They also sell customized gift items, greeting cards, and business signs through 10 online stores. About half their revenues come from political clients of all persuasions and a quarter each from consumers and business- to-business sales.

Steve Grubbs, 45, spoke with Bloomberg.com contributor Karen E. Klein for this as-told-to Entrepreneur’s Journal:

In the early days, we were the first ones on the Web and we grew like mad. We’d double our business every single year. But the growth started to slow down in 2006 or so, when so many of our competitors got on the Web. We needed to figure out a way to differentiate ourselves.

I went to a trade show in New Orleans and saw new technology that allowed us to cut signs in any shape. We could do apple- shaped signs for school board candidates, gavels for judges, and stars for sheriff candidates. Someone who wants to create a messaging strategy can buy our 24-square-foot head of Nancy Pelosi with a 24-square-foot speech bubble next to her, thanking the local congressman for voting with her. Outside of San Francisco, that doesn’t go over very well.

You find a highway or a busy street with a traffic count of 25,000 cars a day and you can get a quarter-million drive-bys in 10 days for a sign set that will cost you $100. A large billboard costs $1,000.

I spent $300,000 on a digital press in 2007 and added a $100,000 digital cutter in 2010. Our customers create their signs online themselves, uploading their own text. We’ve uploaded 10,000 templates they can use or they can upload their own graphic art. The designs are cut out of plastic. Our digital processes allow us to eliminate graphic designers. About half of our employees do production and the other half work [research and development], sales, and administration.

When we first started, we concentrated on the political business. In an election year, we’d have six strong months of revenue and then about a 50 percent drop for the other six months. In non-election years, we’d have about a 25 percent overall decline in revenue.

It’s very difficult to manage those drops in cash flow, so we set a goal to diversify our post-election sales. We established 10 additional companies like PersonalizedWineGifts.com, BigFunnyCards.com, and CarnivalFunTees.com. Our intention is to continue to grow new product lines. We’ve purchased five new printing devices this year, and with this new small business bill we will probably purchase more equipment before the year is out.

In 2008 a lot of money got spent on the election. We made $15 million. But our 2009 revenues were horrible. People bought fewer gifts, businesses bought fewer advertising posters, and it was an off-year for elections. What really fell off were our business sales. The contractors who buy signs, like Joe’s Painting Service, were not spending money on advertising.

When recession hit, I had to lay off our marketing person and do it myself. We reduced our workforce about 20 percent in ’08. But we’re back up to where we were before; 2010 will be the best year in our company by far.

We have new products, new technology, and better marketing. This year, we adopted a PURL strategy, which means “personalized URL.” On our website, we create a personal line of products for every candidate in America. Our mailer goes out to all the 35,000 candidates who file for election. It includes a link to their personal page on our site. When they log on, they see signs that are designed for them and ready to order. Normally this time of year, their order will be out the door in two or three days.

That marketing strategy has been very successful for us. In five years, I hope to have a $50 million company.

To contact the reporter on this story: Karen E. Klein at Karen@KarenEKlein.com

To contact the editor responsible for this story: Nick Leiber at nleiber@bloomberg.net

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