Photo by TRISTAN SPINSKI
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Philip Ellington, owner of the Valpak franchise in Lee and Collier Counties, says that through his business has improved in both readership and opening rates over the last five years. Valpak, a company that mails coupons to target audiences, is seeing a rise in advertisers with the poor economy and an increase in coupon cutting. Ellington says that he sends coupons to 230,000 homes every month, with a coverage area from North Fort Myers to Marco Island. Photo by Tristan Spinski

Photo by TRISTAN SPINSKI
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Philip Ellington, owner of the Valpak franchise in Lee and Collier Counties, shows off the new iPhone and iPod touch application on his iPhone at his office in North Naples on Wednesday, Dec. 2, 2009. Ellington says that a customer can punch in their zip code on the application, and will receive a digital set of coupons to use at local businesses. Ellington says that through his business has improved in both readership and opening rates over the last five years. Valpak, a company that mails coupons to target audiences, is seeing a rise in advertisers with the poor economy and an increase in coupon cutting. Ellington says that he sends coupons to 230,000 homes every month, with a coverage area from North Fort Myers to Marco Island. Photo by Tristan Spinski

NAPLES — Four years ago, Valpak of Southwest Florida could expect a third of its coupon packs to go out with the trash — unopened.

Not anymore. Since 2007, nearly 90 percent of the pale blue packets are getting opened and used for discounts at local businesses, from restaurants and tire stores to grocers and eye doctors.

“Since being under new ownership the opening rate has dramatically increased,” said Phil Ellington, the company’s president.

His business is one that’s actually benefiting from a bad economy.

“We really have gotten good at targeting our audience. I think that has helped out quite a bit too,” Ellington said.

He and his wife, Jeanne, both in their 40s, bought the local Valpak franchise in July 2004. At that time, it was reaching 70,000 homes in Lee and Collier counties. Mailings went out eight times a year.

Now, the packets are mailed to 90,000 homes in Collier and 140,000 homes in Lee every month.

In October, the business received more than 1,500 calls from local residents asking for more Valpaks. The demand more than doubled last month.

“We had 3,673 people call our office this past month asking for extra Valpak envelopes,” Ellington said.

The packets can be picked up at the company’s office in the Greentree Professional Center off Airport-Pulling Road in North Naples.

With the bad economy, coupons have become more “in vogue or a must-have,” Ellington said.

“This economy has really changed the American consumer’s psyche, so to speak. The consumer now wants to spend money, but they want to feel like they are saving money or they are getting a good deal,” Ellington said.

More businesses are responding to the trend in Southwest Florida.

“Our business this year alone is up 34 to 35 percent. Last year, we were up 29 percent. That is just in the number of advertisements that have come into the envelope,” Ellington said.

He said a larger circulation area in Southwest Florida has made Valpak a more attractive tool for advertisers.

“We work with about 550 advertisers every month,” Ellington said.

Some of those advertisers send coupons outside the Southwest Florida market in packets mailed by other franchises. Nationally, Valpak reaches more than 220 markets.

The envelopes carry a broad mix of coupons from local and national retailers.

“We have medical advertisers, dental advertisers. We have retail. We have restaurants and home services,” Ellington said.

Advertisers can choose the zones they want to reach. The local Valpak sends to 23 zones and plans to add more.

“As the Ave Maria area starts to populate we will add that area,” Ellington said.

The local franchise may also look to expand to neighboring counties, such as Glades or Hendry.

The coupons reach all classes, from blue collar workers to wealthy retirees. In Collier, for example, zones include Golden Gate and Port Royal.

There is more of a focus on households with higher than average incomes and with higher home values.

“They are the ones that jump on the offers,” Ellington.

The cost for advertisers is about 3 cents for every house they reach.

“With the cost of a stamp at 44 cents, it’s a pretty good deal,” Ellington said.

In every envelope, the local Valpak looks to include discounts from at least 80 local advertisers.

Many of its advertisers have been in the Valpak envelope for years, running offers every month and changing them frequently. Some advertisers have reported getting 600 responses in one weekend after the Valpak hits mailboxes.

Naples Tomato, a popular family owned Italian eatery in North Naples, has offered specials through Valpak since June. The only regret the co-owner and co-founder, Jack Serfass, has is that he didn’t start doing it sooner.

The most successful coupon has been a buy one, get one free offer on entrees of equal or lesser value.

“It’s not always just coupons. It’s such a broad-based mailing. It’s a great vehicle to communicate we have a tapas menu. We are able to communicate we have early dining and a happy hour,” Serfass said.

The Valpak offers have brought in hundreds of new customers, he said.

He decided to try Valpak because business had slowed and the summer was looking “scary,” Serfass said. June 1 and 2 were the worst revenue days in the history of the restaurant, he said.

Valpak helped turn business around.

“We’re really glad we did it,” Serfass said. “It has worked out great.”

He’s now considering using Valpak to do national advertising to promote franchise opportunities for Naples Tomato.

Valpak offers suggestions about the types of offers businesses should make in the envelope and helps design the coupons for advertisers.

Ellington checks most businesses out through the Better Business Bureau. If there are excessive complaints he turns them away.

“We don’t want the consumer to have a bad experience with an advertiser in the Valpak envelope because if they have a bad experience they are not going to look at the ads,” Ellington said.

The local franchise has nine employees, not including its owners.

“We are trying to get a couple more sales people,” Ellington said.

In every zone, the local Valpak includes a $100 check in one envelope every month. It’s a way to see whether consumers are reading most of the advertisements because the check is always near the bottom of the stack of offers. There are no strings attached.

“For the last 14 to 16 months all 23 have been cashed every month,” Ellington said. “Before that we were hovering at 21 or 20.”

Before buying the Valpak franchise, the Ellingtons both spent 15 years in marketing and advertising. She was a manager for financial products at a bank. He worked in pharmaceuticals, handling sales, marketing and brand management.

They relocated here from the Chicago area five years ago after vacationing in Southwest Florida for many years.

They moved here in part because they were looking for a good place to raise their children, who are 7 and 5.

They live in Bonita Springs.

“We wanted to move to a place where we would feel more entrenched in the community,” Ellington said. “My wife and I are involved in the community quite a bit.”

They were introduced to the Valpak business by friends who had operated a franchise up north.

As technology has evolved, Valpak has tried to keep up by adding new services. Many of the coupons in the packets can now be found online at valpak.com.

One of the newest services launched a few weeks ago is an application that allows coupons to be downloaded on iPhones and scanned at the register without any paper.

By the end of the year, a similar application will be available for the new Droid mobile phone.

“It has been fun,” Ellington said. “I think the thing that has really been good for my wife and I is we really enjoy the business. We really love what we do.”

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