The language of success

Nation's Business, August, 1997 by Michael Barrier

It is an immigrant success story of a classic kind. They started by selling flowers on a street corner; now they own an 800-employee business. So it was with Helen and Marty Shih (pronounced "she"), a sister and brother who came to the United States from Taiwan in the late '70s and now own the El Monte, Calif., company known (from its toll-free number) as 1-800-777-CLUB, Inc. That number logs about 1,200 phone calls a day from Asian immigrants seeking information in six languages--Japanese, Korean, Mandarin and Cantonese Chinese, Tagalog, and English.

The callers may need advice on dealing with immigration officials, perhaps, or help in understanding a bill. The Shihs use those calls to add to a database of names, phone numbers, and demographic information that is used in turn for highly targeted telemarketing.

The Shihs, who are now in their early 40s, came to the United States on student visas, although they had permanent residence in mind. Their mother had fallen in love with America when, as a teenager she attended an American school in Beijing for a few months, and she decided then, Helen says, "that if she ever had kids, she wanted them to live here."

They started with only $500 as seed money for their first business, selling flowers on the street. An American businessman took an interest in the Shihs, and in 1979 he gave them rent-free space in the lobby of a building he owned. "He saw we worked very hard," Helen says, "so he really wanted us to have shelter." A foothold of that kind was all the Shihs needed: By the late '80s, they owned a chain of 16 She's Flower Shops, with annual sales of $4.5 million.

Rather than seek high-end business for flower arrangements, they opted for something more like mass production. "We regularly produced only five or six different arrangements," Helen says. That way they could control their inventory and use a few unskilled workers, working in a sort of assembly line, to produce several hundred arrangements every day

"Very early" Helen says, "we understood that a database was very important to us"--even though they didn't have a computer then. They knew the value of capturing dates such as a customer's wedding anniversary, so they could remind him that it was time to send flowers again. Ultimately they spent $200,000 on a computer system for their stores.

As the Shihs used data gathered from their largely Asian clientele, they became convinced that they could use such data to sell more than flowers. In 1988, Marty and two colleagues began work in a basement, setting up a system that could be the basis for an extensive telemarketing operation.

They went to mainstream companies offering to sell in the Asian community for them, with an alluring guarantee: If there were no sales, they wouldn't have to pay Even so, finding clients was hard, Marty says. "They thought, `Marty is a flower boy'"

The Shihs' database was still limited, derived largely from the flower shops and some Chinese versions of the Yellow Pages--perhaps 40,000 names in all. They built up the list in whatever way they could; Marty would even copy names out of phone books on trips out of town.

Their great advantage was that their telemarketers were talking in their native language to people who were still far from assimilated. When they began calling in Vietnamese, Marty says, "people loved to talk. We were almost making one sale for every two calls." Last year their telemarketers sold more than $146 million worth of goods and services for companies including Sprint Corp. and DHL Worldwide Express.

The Shihs' database now has around 1.5 million individual names covering a high percentage of Asian-American households--and 300,000 businesses.

The Shihs' target market is immigrants who have been in the United States for less than 10 years, but they clearly expect that the company's business connections with Asia will grow in a way that will reduce the dependence on new immigrants. They plan to be vehicles for what they call "American mainstream information" in Asia while they simultaneously collect data on Asian customers for American companies.

In his 18 years in the United States, Marty Shih says, his businesses have frequently grown by 200 percent or more in a year--not because he is particularly smart or well-educated, he says, but because he has "passion and a dream." Many people have a dream, he suggests, but it's not big enough, and they don't have a clear idea of how they might achieve it.

"We always keep thinking big," he says. He and Helen make mistakes--the second flower shop they opened was not successful, and when they had three shops, "we lost control, totally"--but they never let up. "Most people, when they trip, they stop," Marty says. "I wasn't that way".