Magazine article American Banker

Direct Marketers Team Up to Focus on Cardholders

Magazine article American Banker

Direct Marketers Team Up to Focus on Cardholders

Article excerpt

By LISA FICKENSCHER Four Chicago-based direct marketing companies have signed an agreement to form a company that will sell merchandise and membership services to credit card holders.

The deal to create United Marketing Group LLC was signed last week. The headquarters will be in Schaumburg, Ill.

The four founding companies-Hi-Tech Group Inc., Roy Thomas Inc., United Promotions Inc., and Mail Services Inc.-have combined revenues of $120 million.

These companies' expertise is in the oil industry but they intend to expand "to retailers and banks," said Alan Portelli, chief executive officer of Hi-Tech. Effective Jan. 1, he will be CEO of United Marketing.

The four companies' clients for cardholder enhancement products include Mobil Oil, Sears, Roebuck and Co., and Bank One Corp.

Maxwell Sroge, a mail-order consultant in Evanston, Ill., said the timing is good for the companies to come together. The market leaders in the credit card enhancement business-Cendant Corp. and Signature Group-are both preoccupied with internal issues. Signature is seeking a buyer, and Cendant has been roiled by a scandal over inflated profits.

"Cendant's problems have not helped it to develop new programs, and executives at Signature have to be concerned about their future," Mr. Sroge said.

Indeed, several senior Signature executives have already joined United Marketing, according to a Signature executive who requested anonymity. Mr. Portelli was a nine-year-veteran of Signature, which is also based in Schaumburg, before joining Hi-Tech a year ago. …

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