It’s rare to find a company founded in 1910 that is still owned by the family today. What’s impressive is that they have achieved greater than 5 Billion in sales annually.
Dave Young:
Welcome to the Empire Builders podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us. But we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.
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Dave Young:
Dave Young here alongside Stephen Semple. We are loading up another episode of the Empire Builders podcast. And Stephen, you said that the topic today is Hallmark. There are so many things I think of when I think of Hallmark. There was a store in my hometown that was a Hallmark store, and there’s the movies.
Stephen Semple:
There’s the movies, yep.
Dave Young:
Christmas time. There are the ornaments. Where are we headed with this today?
Stephen Semple:
Well, we’re going to go right back to the origin of course. Hallmark’s a big deal. They do 5 billion in sales. They have 30,000 employees, and they are still privately owned.
Dave Young:
Oh, no kidding.
Stephen Semple:
We don’t come across this very often where you’ve got a company that was started back in 1910 and has grown into this big thing and is still a privately held business. It’s kind of special.
Dave Young:
That really is. Still in the same family?
Stephen Semple:
Yeah. Yep.
Dave Young:
Okay.
Stephen Semple:
Which is very cool.
Dave Young:
How did they get started?
Stephen Semple:
Well, they were founded in 1910 by Joyce Hall in Kansas City, Missouri. Today, they are the largest manufacturer of greeting cards in the United States. They also make, as you said, ornaments and party goods and a bunch of other things. They bought, in 1987 from Benny and Smith, they bought Crayola.
Dave Young:
I didn’t even know that.
Stephen Semple:
Yeah. And on the TV things, they also, in the early days, did some joint ventures with Jim Henson.
Dave Young:
Okay. So the Muppets and all of that? Oh wow.
Stephen Semple:
Yeah. The business started out being postcards. So Joyce Hall and his older brothers, William and Rollie started a company called Norfolk postcard company in 1907. It operated out of a bookstore in Norfolk, Nebraska, where they worked. And within a year, Rollie bought out the store’s non-family business partner and it became Hall brothers and the store became the Hall bookstore. The postcard business did really well and soon they outgrew the store and they moved to a bigger city. They moved to Kansas City in 1910.
Dave Young:
Okay.
Stephen Semple:
And by 1912, two years after the move, the postcard craze, it was a real craze. It was a massive thing, started to fade a little bit. And what they then started to do was sell Christmas letters and greeting cards. They changed the name to the Norfolk Card company. This became really interesting up until about 1917 because before this time, the Victorian class, the hoity toitys, would wrap their presents in this really fancy, heavy, expensive paper. The less wealthy couldn’t afford this, and actually in many cases, less wealthy couldn’t even afford presents. But what they would do is they would decorate the presents with less expensive colored tissue paper. That would be how people would decorate the presents. It’s 1917, and the brothers were having a great Christmas season. So good, in fact, they ran out of tissue paper.
Dave Young:
Oh gosh.
Stephen Semple:
So searching through what they had, they came across this fancy French paper that they had, and this paper was used for the lining of envelopes if you remember.
Dave Young:
Oh yeah.
Stephen Semple:
Right.
Dave Young:
It would serve a couple purposes. It made it pretty, but it also made it so that you couldn’t see through it.
Stephen Semple:
Right. Right.
Dave Young:
Yeah.
Stephen Semple:
And what they decided to do was sell this paper for 10 cents a sheet as wrapping paper. They sold a ton of it, but they weren’t sure whether it was a fluke. So the next year they decided to test if this was a fluke. They offered the paper again. But this time it was three sheets for 25 cents, rather than 10 cents a sheet. Again, they sold out. In 1919, they were so confident in the market that they started to make and sell their own wrapping paper, paper that was designed solely for the purpose of wrapping presents. Again, went gangbusters. In 1922, the company started to expand across the country. At the same time, they started to create everyday greeting cards, not just holiday cards.
Dave Young:
How long before they started inventing holidays?
Stephen Semple:
Right. That would be the next state. Basically in a really short period of time from 1922 to 1928, staff grew from four people to 120 people. And they started advertising nationally. They first appeared in the Ladies Home Journal, which is a magazine that’s still around today. Home Journal’s still around today. In that year, they introduced the brand called Hallmark.
Dave Young:
How is that different than what they had been doing?
Stephen Semple:
They didn’t have the brand stamped on it. They created the hallmark symbol, and it was inspired by the symbols that they saw goldsmiths using in London in the 14th century.
Dave Young:
So steal a little bit of the fancy look?
Stephen Semple:
Steal a little bit of that fancy look. They started putting that mark on every card. That’s when they started to call the business Hallmark.
Dave Young:
That was a good move.
Stephen Semple:
Yeah. In 1944, they created the slogan “When you care enough to send the very best” which was created by CE Goldman, who was a marketing and sales executive with Hallmark.
Dave Young:
One thing that just gets me curious, how did they do during the depression? A lot of this was built up in the twenties, even if times are bad, you want to spend a few cents if a little bit extra on your loved ones, right?
Stephen Semple:
It’s interesting. In my research, nothing came out about challenges or breakthroughs or things that happened through the depression. But it’s really interesting to note, there’s this lady who wrote a book, Faith Popcorn, called the Popcorn Report. One of the things that she talks about is this idea of small indulgences, that when we go into recessionary times, what happens is that’s what does well. For example, fancy high end restaurants struggle. A dessert shop does great. Because I can’t afford the $200 steak dinner, but what we can do is go out and spend 20 bucks on a fancy dessert. This idea of small indulgences. Yes, I may not be able to get the present I want to get, but I can spend 10 cents and wrap it really nicely.
Dave Young:
Exactly. Yeah. Yeah.
Stephen Semple:
So I’m going to guess it probably did really well.
Dave Young:
I would agree.
Stephen Semple:
You’re right, David. In 1951, the television program that they started was, yeah, the Hallmark hall of fame. You know what’s really interesting? They won 80 Emmys.
Dave Young:
No kidding. 80?
Stephen Semple:
80. They actually produced some pretty decent stuff.
Dave Young:
Oh yeah. I mean, pull on your heartstrings. All of their stories were either tear-jerkers or just uplifting things. Maybe stories of people overcoming things and always heartwarming. I think my parents used to make us watch those on Sunday.
Stephen Semple:
Yeah. And in 1973, they started making Christmas ornaments, and they created this Hallmark keepsake ornament collection. There are basically 11 million American households collecting Hallmark ornaments. They have 250,000 people as members of the keepsake ornament collections club, which was also launched in 1987.
Dave Young:
I’ve got a couple of bins in the garage that if anybody wants to contact me and sift through them. Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
[Empire Builders Ad]
Dave Young:
Let’s pick up our story where we left off and trust me, you haven’t missed a thing.
Stephen Semple:
The interesting thing is, that Hallmark is still privately owned.
Dave Young:
Do you know much about the, I guess it would be a franchise. Like we had a Hallmark store in my town. It was Ann’s Card and Party shop. It was a Hallmark gold crown store, which was a higher level than just a store that sold the greeting cards. But she had a gift store on one side and then all these hallmark products on the other. I don’t know if that was a franchise or licensing or what kind of model it was, but they were heavily into retail as well.
Stephen Semple:
Yes. Yes. Very heavily into retail. They had their stores, their corporate stores. They had licensed stores. Yeah. They had several different ways in which that distribution was done. But the thing that’s interesting when you think about it, in many ways, you could see it as being disjointed. We’ve got cards, and we’ve got wrapping paper, and we’ve got ornaments, and we’ve got television, but in many ways, they were all together because to your point, it was all about emotional family time. The cards were for special occasions. But they were all things that had this high emotional family time. The television shows were that way. The Christmas ornaments are that way. The wrapping paper is that way.
Stephen Semple:
So in many ways, while it’s a lot of different things, it’s also very focused. But the part that I found interesting about the origin of all of this, the origin of all of this came from, and we sold out, you could stop there. Most businesses do. We sold out of the tissue paper, and they went, “Well, what else could be used? Oh, we’ve got this lining paper. Let’s sell that. Holy crap. That’s sold well. Let’s try it again. It’s sold out well. Okay. Let’s make something specifically for that. Holy crap. That’s sold out well. This is a new business.”
Dave Young:
Yeah. Sometimes business owners are like, “Well, I guess we sold out. We just have to wait for more to come.”
Stephen Semple:
Right.
Dave Young:
Right. And instead of what else could we sell? What do we have laying around here that maybe we could sell instead of that?
Stephen Semple:
Right. That we could repurpose to that, that’s close enough that we could offer it as that. Yeah. When I came across this story, that’s what I found so interesting was we sold out, what else can we do? And then they didn’t immediately jump on it. It was like, okay, well let’s try it again. It’s like, “Okay, now let’s put this twist on. Wow, we got a business here. Let’s run with that.”
Dave Young:
Can I offer one other lesson here?
Stephen Semple:
Absolutely.
Dave Young:
The fact that they got into TV programming is classic content marketing. It’s not just the Hallmark hall of fame. It’s brought to you by Hallmark. So you’ve got people who love their loved ones and want to send the best and wrap things in the best paper and send the nicest cards. You’re giving them programming that plays to their own sensibilities and draws them in even closer. Right now, they feel really good about Hallmark and get to the point where they’d much rather buy a Hallmark card or go without. If I can’t get a Hallmark card, I’m not going to the grocery store and buying one of those off-brand ones.
Stephen Semple:
Or the gas station.
When you care enough to send the very best.
Dave Young:
Right. I think that’s changed in recent years, but at the same time, back in the sixties and seventies, it was Hallmark. That’s how you know when you care enough to send the very best. That’s what they were telling us. I think we all believed that.
Stephen Semple:
And they also leaned into it with that really fancy Hallmark symbol. Also, I think reinforced that. But Dave, you bring up a really interesting observation I hadn’t thought about is that you’re right. That was very much classic content marketing. Marketers on the internet want to believe that they created content marketing, right?
Dave Young:
Yeah.
Stephen Semple:
And we have an even older like if you go back to the Dr. Brinkley story, that’s an even older story that’s even closer to content marketing. If you want to hear a really old story of content marketing done over the radio, go back and listen to Dr. Brinkley’s story. We won’t give away the punchline either. It’s a great story.
Dave Young:
Yeah. It just warmed my heart to hear about Hallmark.
Stephen Semple:
Yeah. It’s really a special story, and it’s cool that they’re still family-owned.
Dave Young:
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