Posted by Kevin Lofgren.

In 2000, having gone through the highs and lows of the internet bubble, I realized that it might be a good time for me to put my destiny in my own hands.  That's when I started Lofgren Media, which was a shop focused on user-centered design and development for web applications.

Just after September 11, 2001, I was talking with my friend Kevin Dahlstrom about how we could apply our user-centered thinking to direct marketing. In Kevin's experience at Gator (now Claria), he had seen a very successful direct marketing campaign manually run by the marketing team. His idea was to combine the automation of that manual process with our innate usability, creative and technological skills in order to create what we dubbed "The Lead Machine."  We formed a general Texas partnership called K2 Partners in 2002.

Our first campaign was with Oracle and their business partner, BearingPoint (KPMG Consulting at that time). It was sort of like being a rookie in the big leagues and walking up to the plate for the very first time facing a serious pitcher, and on the very first pitch, hitting a grand slam. The results were almost literally unbelievable. Out of 1,000 companies we sent a direct mail piece, 25% requested follow-up from a sales representative. They closed $12 million of gross revenue from that program alone (according to Oracle).

After that initial success, we continued to deliver a higher-than-average rate of return on our clients' direct marketing programs. Following success with powerhouse clients like Deloitte Consulting and Intel, we steered our way into being a long-term, viable solution provider in the marketplace. It was time to formalize as a corporation and give ourselves a brand with staying power.

Enter Farstar in 2003. With the help of our clients, we settled on our logo and name. We broadened our focus to include companies selling to consumers with clients like TXU, Sprint PCS, UPS, GMAC and Citi.

By February 2005, Farstar had simply grown faster than the company infrastructure could handle and things started to break. We were having an incredibly difficult time retaining our clients, and the level of chaos in the company was at its peak. At that point, I took a good hard look at things and realized that if we could hit the re-set button and re-architect the company based on everything we had learned in our first four years, we could probably create what would feel pretty utopian to us.

After thorough discussions with my fellow shareholders, it was decided that the company would buy out the others' shares and I would re-build Farstar as the only owner. As one can imagine, one of the benefits of being self-funded with only one owner is that we can do whatever we want, for the most part. So first we trimmed down our overhead substantially to give us sufficient "runway" to make the changes. We then began re-architecting and re-building the technology to support where we wanted to go, revamping the project delivery roles and processes, establishing a new pricing model, and offering completely new services to our clients. Everything we changed about Farstar was driven by the same primary goal: Establish and nurture long-term relationships with our clients.

Retaining our clients, it turns out, is pretty simple. I don't mean it's easy. I mean the principles are simple: Do great work. Be honest and transparent with each other and with our clients. Stand firm on our expertise even when clients disagree. Select clients and projects that we know will be successful. Concentrate on the project's final objectives. Turn away potential clients and projects we believe run a high risk of being unsuccessful.

These are pretty simple concepts, but surprisingly, concepts we had not been employing prior to our re-birth. And come to find out, concepts that not many companies truly uphold.

Since making these significant changes in 2005, we keep an incredibly high percentage of our clients from year to year. That's due in part to the hard-line stance that we turn away work we don't believe in. But it's also because we believe in giving our clients what they need (versus what they want), ultimately allowing us to be successful in our work. And because we end up successful in our work, we keep our clients. It's just that simple.

But simple isn't always easy, as I said. So we work pretty hard to make it so.

kl