"We would have been wise to have a contingency plan in place,"
admitted Mr. Nowak, president of the agency. "But we didn't let
ourselves think about it. It's true we had all of our eggs in one
basket, but it was a really great basket."
The Target work was fresh enough to attract top-notch talent
from around the country. And PMH built a lucrative business around
the retailer, which kept it busy enough that the agency only
occasionally took on short-term projects from other clients. As of
2010, Target accounted for all the shop's revenue.
Target notified the agency months before it planned to end the
relationship, which gave the shop time to plan for the future and
pitch new business, but it was also incredibly busy wrapping up
work for its longtime client.
"Dave and I just sat with that for a day or two letting it soak
in," remembered Mr. Nowak. "[Then] you just go into action mode.
It's either OK, we're going to sell the building, or figure out a
way forward.
Within 12 months, PMH replaced all the lost Target business --
as of 2010, with work for clients such as JC Penney, Kmart, and
Children's Hospitals and Clinics of Minnesota. In 2012, PMH added
Gap, Sephora, Chico's
and Allina Health to the mix. Between 2011 and 2012 net income grew
16%.
"We desperately needed revenue, but we didn't chase revenue,"
Mr. Nowak explained. He made some good, old-fashioned cold calls to
brands he thought would be a good fit. "We still chose to be
selective. That's the positive of being privately owned."
"We know what we're good at. ...We're so strong when we're doing
what we love and not so great when it's not our sweet spot," Mr.
Peterson added.
New work like the "Love Comes in Every Shade" campaign for Gap
has been well received. It paired the retailer's candy-colored
products with well-known friends, couples and relatives in ads
depicting varied forms of love, from puppy love and sibling love to
married love and best-friend love. Meanwhile, PMH's touching
campaign for Children's, "That's Why We're Called Children's," has
had an outsize impact on that brand's market share and
donations.
About 10 people chose to leave following the loss of Target, Mr.
Nowak said, noting the shop avoided layoffs. Those departures
provided the opportunity to bring in more digital and
account-planning talent. The total number of employees at PMH now
is 62. Revenue from digital jumped from 4% in 2010 to 19% in
2012.
"We can look back now and just be really grateful for the
opportunity to work on Target," Mr. Peterson concluded. "There's a
renewed energy now; it's an exciting time for us."
