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For 25 years, the people behind HSR Business to Business have stayed on top of the advertising game by always recognizing the next big thing. At the same time, they have transformed the Cincinnati-based agency into a nationally recognized b-to-b marketing powerhouse by remaining focused on one deceptively simple goal: They remain true to their roots. “In terms of sticking to our knitting, we became convinced early on that the essence of our proposition to a client was that we helped industry leaders defend and build their brands in rapidly commoditizing business markets,” says Rick Segal, chief executive and spiritual leader of HSR, known for his trademark bow ties and horn-rimmed eyeglasses. HSR has honed its enviable creativity and passion for the b-to-b market by keeping abreast of trends, helping clients become leaders in their fields and providing them with a variety of effective marketing outlets—including brochures, trade show activities and persuasive messages installed on sales teams’ laptops. This laserlike focus on client service has propelled HSR from a tiny regional firm with a negative balance sheet to a 100-employee business with $15 million in revenue and a global presence. Indeed, the company is celebrating its 25th anniversary with its most successful year in growing its top and bottom lines, and winning ever-growing acclaim. “We represent the latest and the most advanced approach... in the way we have been organized, the processes we’ve used to get work done and in the way we have invested in technology,” Segal says of HSR’s philosophy. Over the years, HSR has been regarded as very future-focused. Segal recalls that in the 1990s, the agency consulted with visionaries such as Nicholas Negroponte of MIT’s Media Lab and George Gilder, a telecom guru. The result has been HSR’s capacity to serve its clients’ ever-changing needs. “Today, there’s not a b-to-b market context in which we’re not capable of being thoughtful counselors and advisers in the first conversation,” Segal says. IN THE BEGINNINGHSR got its start when principals Segal, at age 23, and Mike Hensley, at 24, were given the opportunity to buy the marketing and communications division of Alpha Technical Services, a Hamilton, Ohio, company that produced manuals and technology documentation. Ralph E. Pagano and Adrien Stacy (who later married Segal) were also instrumental in the company’s beginnings, as founders and major shareholders. Segal and Hensley took out personal loans to finance the buyout in the summer of 1981, and Business & Industrial Marketers Inc. was born on Sept. 3, 1981. At the time, Tom Rentschler, who later became HSR’s third partner and its executive creative director, was handling marketing for his family’s bank, a client of the ad agency. Rentschler’s family sold the bank in 1982, and he went on to work at a Cincinnati ad agency until joining HSR in 1991. HSR’s meteoric rise came from a passion for the unique challenges and rewards that business marketing presents. “We have been given the opportunity to wander around in the otherwise invisible economy of b-to-b,” Segal says. “We get to see and think about, ‘How does something get made? How does it get done?’ These are insights that a layperson would never know. It’s something that makes us eager to get out of bed and get to work each day.”
Yet in the agency’s early years, Hensley and Segal realized their ambitions bumped up against the reality of an unsophisticated industrial market, Hensley recalls. “As we started to build our practice, we increasingly wanted to be challenged by larger, more sophisticated clients—leaders in their industries,” Hensley says. But with fewer than a dozen clients and no more than $100,000 in accounts, the agency first faced some dark days. “After our first year of business, our banker, lawyer and accountant said, ‘This has been a most excellent adventure. Now go out and get jobs. We’ll have the papers ready to file for bankruptcy,’” Segal says. Hensley and Segal decided instead to live up to their obligations to their clients and take the tough steps necessary to dig themselves out of their financial hole. They trimmed their workforce from 14 to three people, cut salaries and benefits, and divided the janitor’s duties among themselves.
GATHERING STEAMThe belt-tightening paid off, and the agency had a breakthrough win in the mid-1980s when it landed Intercomputer Communications Corp. as a client. (Intercomputer Communications’ founder, Kevin O’Connor, is the software pioneer who later co-founded and headed Internet advertising company DoubleClick.) “It wasn’t a sizable account, but it turned us on to the opportunities of using PCs on desktops as a communication device,” Hensley says. Hensley took Macromedia courses, hired more people with computer graphics and software skills, and put together CD-ROM presentations of clients’ brochures and catalogs—moves that signaled an early commitment to new media by the agency. By 1987, the firm had $300,000 a year in revenue and had returned to profitability. But 1991 was another turning point for the shop, as the partners changed the company name to Hensley Segal Rentschler and decided to expand their business nationally and globally. “Until 1991, I didn’t have a single frequent-flier point. I’ve been gold or platinum ever since,” says Segal. In the early 1990s, the agency continued its work for Intercomputer Communications, which had the significant and long-lasting effect of propelling HSR into the Internet age before rivals knew the World Wide Web existed. The agency launched its Web site in early 1993 on Gopher, a predecessor to the Web. Later that year, Netscape released its flagship Navigator browser. “[HSR’s site] wasn’t much more than a logo, some text and a couple images, but it was a starting point,” Hensley says. Recognizing the growth potential of the fledgling Internet, HSR began lobbying clients, persuading them to create Web sites to market their businesses—an effort that boosted the agency’s reputation as a leader in interactive and Web-based marketing. Before long, that recognition brought another significant interactive marketing client, Pall Corp., an East Hills, N.Y., company that touts itself as the largest filtration company in the world. As HSR fostered its growing interactive business, it continued to focus on the tenets of solid b-to-b marketing. Rentschler worked to build HSR’s reputation for creative work by designing advertising that was wry, clever and sophisticated. Hensley, while building HSR’s interactive expertise, advised clients on how to keep their leadership positions in industries whose products were becoming commoditized. He also pushed clients to engage in an in-depth dialogue with their suppliers and users. “Dialogue builds trust and insight into customers’ needs, dynamics and shifts in the market,” Hensley says. “It has to do with establishing a value for the brand that transcends the product,” says Rentschler. “It’s the knowledge value, the thought leadership.” WIDESPREAD RECOGNITIONIn late 1994, the agency landed another crucial account when GE Aircraft Engines hired HSR as its agency of record. The win brought HSR national attention, and Advertising Age’s Business Marketing magazine, the predecessor of BtoB, named HSR its Agency of the Year for leadership and foresight in new media. By the mid-1990s, the agency’s national expansion efforts were paying off, with more than half of HSR’s business originating outside Cincinnati. Its globalization efforts kept pace, and in 1996, HSR formed B2B World Class, setting up partnerships with ad agencies in Asia, Europe and South America. Soon thereafter, HSR started its consulting division, leveraging its experience and expertise in the b-to-b market to advise clients on strategies and competitive issues. The company sought experienced strategists from consulting companies and built a five-person consulting group. HSR secured its role as a leader in integrated marketing in 1997, when it won the account of Hobart Corp., the nation’s leading supplier of food equipment. That same year, the agency won Business Marketing’s Agency of the Year award a second time and was cited for its prowess in integrated marketing communications. In 2000, the company again changed its name, becoming HSR Business to Business. In 2004, the agency took a key step in its geographic expansion by opening a Chicago office. Since then, the strategically important office has won clients including CCH Inc., Gordon Flesch Co., LaSalle Bank, SIRVA Inc. and Zebra Technologies. In July, the office enjoyed its biggest win yet: It was named the marketing communications agency of record for Chicago based USG Corp., the world’s largest manufacturer of drywall products—an account that will more than double the Chicago office’s billings. The agency’s top-notch work continues to gain recognition. HSR was recently named Agency of the Year by the Business Marketing Association for having won the most awards in the 2005 Pro-Comm Awards program for b-to-b marketers. HSR also won 14 awards at the 2005 Business Marketing Association’s Chicago Tower Show—including 11 first-place awards, more than double the tally of its nearest competitor—and garnered the Best in Show prize.
LOOKING AHEADHow does HSR intend to top its achievements? It is already enjoying a growing audience for Webinars and virtual event marketing programs it designs for clients, and has ambitious plans for its own development. Segal says the company’s latest initiatives include expanding its market reach (the agency will be unveiling a major “B-to-B in China” capability next year); enhancing direct marketing offerings; providing more staff training and leadership development for employees; and implementing “HyperIdeation,” a creative process that helps the agency quickly produce great ideas for clients. Rentschler says he believes HSR can double in size in the next three to five years. Segal concurs, saying, “I have every confidence that we will complete at least one major acquisition in the next 12 months.” HSR's ambitious growth goals aren’t at all surprising to b-to-b marketing experts. “HSR is arguably the best business-to-business agency in the world,” says Robert F. Lauterborn, the James L. Knight Professor of Advertising at the School of Journalism & Mass Communication at the University of North Carolina at Chapel Hill. He is also a principal in Morgan Anderson Consulting, a marketing communications management consulting firm based in New York, and is a former chairman of the Business Marketing Association International. Lauterborn credits HSR for working strategically from a project’s beginning, rather than simply doing tactical work—an ad or a brochure—as many other agencies do. He also lauded HSR for its hiring process and its impressive investment in training employees. “The creative is smart work at the service of the strategy,” he says. Ralph A. Oliva, executive director of the Institute for the Study of Business Markets, a 60-member research institute, hailed Segal as his own “very strong personal brand” that reflects the HSR brand of quality. “[This] agency can really bring a client unexpected, yet smack-on creative product,” Oliva says. “There is more going on than you see on the surface.” The true genius of HSR, however, may be its ability to weave marketing strategies that show how deeply the agency cares about taking b-to-b marketing to a higher level, Oliva says. “When a client makes an investment in HSR’s contributions, it gets on-target results.” As for his vision for the years to come, Segal says he feels he is at a stage in his career in which he is “planting shade trees under which I’ll never get to rest.” Yet, he says, he has every confidence that the stewards of the work “will find the growth and prosperity every bit as rewarding as we have found it.”
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IN THE BEGINNING
Hensley, exec VP-director of integrated marketing communications, describes the b-to-b advertising profession: “It’s more intellectually stimulating [than the consumer space], and the impact you have on society and business is that much more dramatic,” he says. “I don’t know that it's all that interesting selling popcorn or toothpaste.”
