IHS Gathers Sales Leads for Clients : Firm Specializes in Answering Ad Inquiries

When Tandon recently took out full-page newspaper ads trumpeting its new line of personal computers, potential customers were urged to call a toll-free number for more information. And an obscure company in San Fernando took the calls.

Privately held Inquiry Handling Service is probably the biggest company in a little-known field. Besides Tandon, it services such firms as Gould, TRW, NEC, Rolm, Clorox, Carnation, Sony and Hewlett-Packard.

IHS was also one of the first to do what it does, which is to answer mail and telephone inquiries generated by newspaper and magazine advertisements, at the same time gathering sales leads for clients.

Started on the family patio in Sherman Oaks 20 years ago by Michael and Doris Simon, the company has grown into a firm with 80 employees and sales of $2.7 million, up 8% for the year ended June 30.

Several months ago, IHS moved into three-acre quarters that Simon and his partner, Richard Crocker, bought for $2.8 million. The company occupies 39,000 of the 56,000 square feet of space in the building. Simon owns 75% of the business, Crocker 25%.

“They’re the granddaddy, that’s for sure,” said Daniel Maguire, president of 4-year-old Inquiry Plus, just across the Chicago line in Bensenville, Ill. Robert Huse, president of the Mail Advertising Services Assn., a trade group, said that IHS is almost certainly the biggest firm of its kind and that there are perhaps just 50 like it in the United States.

In the case of Tandon, IHS answered the phone calls, referred callers to the nearest dealer and sent the callers’ names to dealers as sales leads. IHS workers do not have to know anything about Tandon’s products, and, indeed, even though the firm has many high-tech clients, Simon’s background is in ad sales.

“Most of the stuff I don’t understand,” he said of the brochures that he mails.

Charges vary, but Simon said the average IHS client pays $125 a month, plus about $1.15 per inquiry, or about $700 a month for 500 inquiries.

Tandon spokesman Michael Sanders said it would not pay for Tandon to try to do the job itself.

“You’d need a phone system, staffing, and you’d have to allow for time differences,” he said, adding that all of that overhead would have to be taken on for what is sometimes a short period of intense activity.

The biggest product at IHS is sales leads. The biggest problem, Simon said, is not competitors in the same field but indifference on the part of clients’ salespeople.

“Our main competition is apathy,” he said, asserting that many companies do not follow up on leads aggressively.

Another problem is keeping brochures and other promotional materials in stock. Sometimes clients fail to provide enough, or they run out in mid-promotion, leaving IHS with unanswered inquiries on its hands.

Almost all of IHS’ business consists of firms selling to other businesses, and most of the clients are in California, where IHS has few competitors. Among its customers are such well-known local businesses as Dataproducts, Hughes Aircraft, Micom, Cordata, Zero Corp. and Sierracin.

One of the company’s main activities is responding to so-called bingo cards from trade magazines, on which a reader has circled several numbers corresponding to ads in the publication. IHS not only provides the requested information but also passes along a computerized lead to the advertiser’s sales force.

IHS is thus awash in paper, which requires a good deal of unskilled labor to manage. Yet the firm is also highly computerized. Its phone answerers sit in a room full of cubicles with terminals at their desks. Most of the firm’s space is devoted to a warehouse full of cards, pamphlets and mailing equipment.

Simon, a mild-mannered, 57-year-old Chicago native, said he plans to expand the business soon to “qualify” leads by telephone, which means calling potential customers, determining if they got the pamphlets requested, asking if they plan to buy and finding out if they know of anyone else who might be interested in further information.

Another planned expansion involves teaching companies how to set up their own inquiry handling services.

Simon said he will not be shooting himself in the foot by doing that because personal computer software already exists to help companies do the job in-house. Furthermore, there is plenty of business to go around, and many companies just will not want to take on the task all year long.