MERIDIAN — You’ve probably seen hundreds of Lead America’s mailings. They offer you the opportunity to discuss “final expenses” (read: burial insurance). The letter asks you to fill out and return the enclosed postage free postcard. About 98.5 people out of 100 toss the entire contents, but that one or two people in 100 who returns the card keeps Lead America owner John Phillips happy — and prosperous.
Lead America and Parker & Associates, an insurance firm, jointly own a building on Old Highway 45 in North Meridian. The responders’ cards are recorded by Lead America and then turned over to Parker. Agents are assigned each Monday to contact the responders — an appointment is usually scheduled within one to three weeks of the card’s return (“The fresher the lead, the better the chance of the sale,” said Phillips).
Phillips’ attorney, Greg Snowden, calls Lead America and Parker “a sleeping giant,” and he may be right. According to Phillips, the combined Lauderdale County payroll of Lead America and Parker & Associates including commissions and bonuses is more than $30 million. And Parker is the biggest final expense company in the U.S. with other offices as far flung as the Carolinas, Texas and Florida.
The ‘Yantley Mall’
That’s imposing, especially considering that very few local residents even recognize the names, much less the location, of the two companies. But if you expect to compete with entrepreneur John Phillips, you better be prepared to work hard early and late.
Phillips is a native of Yantley, Ala., just across the Mississippi state line.
“After I graduated from Choctaw Central High School in 1970, I enrolled in the school of hard knocks,” he recalled.
With a $2,000 loan he started a grocery store in “an old building that was kinda’ falling in.” He started selling gas and within 18 months, he had a full line of groceries. “The wholesalers would put stuff in and I’d pay them at the end of the week.”
He soon had to double the size of his store and bought out — and closed — a competitor. “I sold everything. We got in the logging supply business, new and used tires, plumbing supplies, a car service department and you-name-it,” Phillips said. “The community began calling it ‘The Yantley Mall.’ They didn’t have to come to Meridian for anything — and there wasn’t a Wal-Mart then.”
He went into the surplus and salvage lumber business in Meridian. Then he and a friend went into the used car business in Birmingham dealing only in Mercedes and BMWs that were still under warranty. Located near one of the downtown medical complexes, “We were selling 20-30 cars a month and were making real good money.”
At 36, the school of hard knocks had taken its toll and Phillips bailed out.
“After a couple of years, I began to get antsy. I realized I was young and had to have something to do,” he remembered.
He invested in a Meridian recording studio and rented the bottom floor of the building to Ken Parker and his insurance agency. They became good friends. It was the beginning of a beautiful business partnership.
It really started over a coffee conversation at the Waffle House.
“He discussed the problem of having leads for his agents,” Phillips said. “I said, ‘We ought to start us a lead business,’ and he said ‘Are you serious?’ and it went from there. I had never been in the lead business in my life, but God had blessed me with the wisdom to conquer other businesses, so I knew it could be done. And we started out 50-50 and I bought into his insurance business.” That was 1991.
Lead America purchased mailing lists and started out with 20,000-30,000 letters a month, but were soon up to 100,000.
“We grew and grew and grew,” Phillips said with a grin. And they moved and moved and moved until they bought their present building three years ago, which started out at 20,000 square feet and has almost doubled in size. Lead America now mails two to five million letters per month nationwide — it takes two shifts and 22 employees for that kind of production.
And then came
the anthrax scare
TV ads are run all over the country, but Phillips said mail is the most reliable and that TV doesn’t generate the required number of leads.
According to Phillips, before Lead America came along, the Meridian post office was about to close its third class facility. Now a brand new post office is under consideration. One reason is because his company has all of the mailings processed in Meridian, then his truck or one of his three vans transport the envelopes to the destination post office as far away as Dallas. For that he gets a postal discount and the assurance that his third class mail won’t be still sitting in Meridian a week later.
The anthrax scare was devastating to Lead America. “We were mailing third class letters marked ‘Personal’ with no return address and every TV network was saying, ‘Don’t open those kind of letters.’ We had to throw away several million envelopes,” Phillips recalled. “I called our envelope supplier right then and they had a half million envelopes with our return address to us two days later. We dropped down to less than half our normal returns for a while, but it’s back to normal now.”
As for the future, “Postage is our biggest expense, so continued increases in postal rates could kill us,” Phillips said. “They went up $20 per thousand last July. Because of mail’s reliability we’re not into e-mail yet, but that’s a possibility.”
Phillips and Parker own part of each other’s company — and they have a third partner — but it’s clearly understood that they are in charge of their own operation.
Phillips said that Lead America has “a few other clients — we’ve had to turn business away,” but Parker & Associates is the 800-pound gorilla. And the combination of the two firms will continue to be a beehive of activity and a major part of the Lauderdale County economic community.
Contact MBJ contributing writer Bill Johnson Jr. at firstname.lastname@example.org.