Leisa: This is The Businessmakers, heard on the radio and seen online at TheBusinessmakers.com. I'm Leisa Holland-Nelson, and welcome my guest, Pam Lockard, president and founder of DMN3, one of Houston's leading marketing agencies, and more exciting, the third fastest growing women owned business in the city of Houston. Pam, tell us about DMN3 today.

Pam: Well thank you, Leisa, for having me, first of all.

Leisa: My pleasure.

Pam: But DMN3 is a marketing agency, and we used our insights that we've gained from working with many different types of industries over the years to help our clients grow their business using lead generation and traffic generation and customer retention as the avenues to keep their businesses growing. And we focus on online and what I call traditional still direct marketing to make that happen.

Leisa: Can you describe a typical engagement to me? When you say direct marketing, exactly what does that mean in today's world?

Pam: Well, for instance, we have a client here that is in the insurance business. So what we help that client do is we help them come up with the positioning that they're going to take to differentiate themselves in the market. We create the communications, which would be lead generation through television, through online advertising and direct mail, and we drive those leads to them into their telephone system, and then we measure the telephone, or we're able to report to them the calls that they get. We're able to report to them the online leads that submit forms, and they then try to close the leads. So that's a good example of the type of work we do for many different clients.

Leisa: How many employees does it take to run your business?

Pam: Well right now, we have 30 employees, and then we also use some offsite partners. Because there's so much specialization in this business, it doesn't make sense for me to hire every single specialty. So we work with strategic partners in certain areas of our business.

Leisa: So what specialties do you focus on that you have in-house?

Pam: Here we focus on, first of all, the client management developing the strategies. Really, the architecture and what we're going to do in a program, and then we do most – all of the implementation here, but if it goes into certain special things that need to be done, like some types of tracking, we have some outside partners that help us with some of the tracking. We sometimes have them come in if we need something to be built. We might use someone like your company from a technology standpoint, which is more and more important now in marketing is to involve the technology. So we do outsource that part.

Leisa: Oh, I like that. Take me back to the beginning. What made you decide to go into your own business as a woman in the first place, and what made you choose marketing and advertising?

Pam: Well, I always wanted to be in my own business. I was bossy from the beginning, and I never wanted anyone else to tell me what to do. That's why probably I was fired from many of my early jobs.

Leisa: How many times were you fired?

Pam: I think three times, and that's all I ever worked for anybody.

Leisa: It's enough.

Pam: But my degree is in elementary education. Then I moved into selling, and I really think that sales was a great avenue to help women that didn't have degrees in like – they weren't doctors or lawyers to actually get well into the business world. So that helped me to get started and have the confidence to start my own business. If you're not able to yourself, it makes it very difficult to get your business going. So that's why or how I got started was I moved into then printing, and from printing, I moved into direct mail, and then from direct mail, I've expanded over the years into many other things.

Leisa: Tell us what you remember about those early years.

Pam: I remember it being tough, and I remember not making – having a paycheck for some period of time and being very thankful that my condo payment was like $300.00 a month.

Leisa: Do you remember when that changed? What happened?

Pam: Well, because I was trying to sell lead generation for clients, I did my own lead generation program, and I mailed out some things that were quite interesting little three-dimensional pieces, and I mailed one to Service Corporation International. An actual man named David Willis got the mailing. He was the marketing director, VP of marketing at the time, and he called me to come in, and he was actually excited because he was looking for some firm in Houston that really knew and understood direct mail and lead generation. And so it wasn't long after that that I started doing all of the direct mail for our Service Corporation International. At that time, it was the guardian plan, which is the prearranged funeral service, and it was a national program across the United States.

Leisa: Did you start by yourself?

Pam: The business I have today I started by myself in 1992. I had other partners prior to that in other printing businesses for several years prior.

Leisa: I can't imagine that it's been a totally smooth ride. I know we've had some recessionary times in the last 21 years. I'd love for you to tell us about one of the biggest challenges you faced and how you overcame it.

Pam: Well, I would say that 2009, really, 2008 was when the economy really got bad, but my business was impacted more in 2009. Many of our clients basically quit spending. We lost one of our bigger accounts. I was faced with a staff of employees, and what do you do with all these employees, and you don't have enough revenue to come in during that time. And I made a commitment at that point that I'd invested a lot of money and training these people to be direct marketers, and I did not want to lose them. So I decided for a year to forego any kind of salary myself to keep the business going, and I had to pump a lot of money into the business and loan it for that year. But in 2010 and 2011, in 2012, I more than earned it back.

Leisa: That's really extraordinary. I don't know that many people who (a) could afford to do it, or (b) would do it. So were you careful? As an entrepreneur, most of us live by the skin of our teeth. So what were you doing so that wasn't the situation?

Pam: My philosophy in life, I live it in my personal life as well as my business life is always to live and operate below your means so that I've always made sure that I had cash available for the bad times and the times when you don't make money so that you never have to get desperate and make really bad decisions. And so luckily, I was in a position when the business got bad that I didn't need a bank to have to loan me money, which would have been probably bad. I would have been forced to have to get rid of a lot of employees. I was able to self fund it because I have set aside enough money to keep myself independent and being able to function through the good and the bad.

Leisa: You mentioned helping your customers differentiate themselves. I know that there's a lot of marketing agencies out there today. There's a lot of competition. How are you differentiating your agency?

Pam: We're using knowledge to differentiate our agency, and what we're doing is we've really taken several sectors of business that we're focusing on. If we feel that if we know more about the business, we have a big advantage over other agencies, and we think today the clients are not hiring necessarily just creative agencies. They're looking for agencies or partners that understand their business and can bring insights to them that is beyond what they even know. So for instance, we're working in healthcare. We're really trying to focus there in healthcare. We work in electricity deregulation market, an area that we worked in for ten years, and banking. Those are areas where we know their business very well. We're not just going out and trying to sell advertising to a business, and that's really how we differentiate ourselves.

Leisa: Another thing I'm thinking about, tell us about one of your biggest clients. Have you had challenges with your big clients? I would imagine as an independent agency, it's hard to keep them. There's so much competition out there.

Pam: Well, it's hard to keep them, and it's hard to get them. Maybe it's starting with how to get in a client. I guess the largest account we had for many years was Reliant Energy, and I always like to tell the story of the David and Goliath in that they had a large agency that they did business with and did all their branding work, and they decided to get a direct marketing agency locally. So we had to compete against them and one other agency. And we actually lost the RFP and did not get the business. And of course, I was very disappointed, but three months later, we were called, and at that time just called. They came in and said just basically, “Come in and take over the business,” because they knew that we could perform, and we did it. We performed and kept that business for eight years. We still do a small amount of work with them, not as much now as we did, but for many years, we kept the business.

Leisa: So we've heard how you started. We've heard about the company today. Looking in your crystal ball, what are you projecting for DMN3 in the next five years? How do you see it growing and changing?

Pam: I see it continually changing. I think that in a few years, we'll have to be much more technology based and integrating much more technology into our marketing. I just read an interesting thing yesterday that Gardner said. In the next two years, the CMO will be purchasing more IT than the IT person in the company or the CIO in a company. So more and more, we've got to be able to bring ideas and ways to integrate what we're doing in marketing through the web, and that's going to require technology.

Leisa: Thank you very much, Pam, for visiting with us today.

Pam: Thank you for having me.

Leisa: And that wraps up my interview with Pam Lockard, founder and president of DMN3. This is The Businessmakers Show, heard on the radio and seen online at TheBusinessmakers.com.