For Electronic Check Services, the recession cloud had a silver lining.
The company got its start collecting on bad checks via debit-card technology but has expanded its horizons – and boosted its bottom line – largely via expansion into the prepaid cellular phone service market.
The company posted 2010 revenues of nearly $81.9 million, a whopping 482 percent increase from its 2008 performance.
“The thing that is very damaging to the check segment of our business is very instrumental to the success of the prepaid piece of the business,” ECS President Derron Winfrey says. “When you think about a depressed economy, there are far more people running into the prepaid sector.”
The company’s journey to the top of the 2011 Dynamic Dozen list might not have been possible without its 2007 purchase of a small technology company, now called Softgate Systems, which allows retailers to offer prepaid cellular service, bill pay and gift cards via a single terminal.
“We guessed right and purchased the Softgate company,” Winfrey says. Now, we’re able to properly utilize that technology to our advantage and grow our business.”
Most other companies outsource or purchase similar software, which helps ECS stand out in the market, he says.
“We can be much more aggressive in our rate structure with how we go after a customer. Our cost of doing business is simply lower because we are our own provider,” Winfrey adds.
The company provides its prepaid cellular services, private-label gift card programs, bill pay and checking services to roughly 5,500 retailers – primarily convenience and grocery stores – in the continental 48 states.
To make it clear that services have grown beyond checking, the company recently began doing business as ECS, Winfrey says.
“Running under that heading, it doesn’t give us quite the stigma of, ‘Oh, you’re just a check company,’” he adds.
Delving into the prepaid services arena has changed founder Dennis Winfrey’s original vision for the company when he opened it in 1997. His plan, according to the younger Winfrey, who joined the company about 10 years ago, was to provide checking services to customers in Missouri and Kansas for five to 10 years and then sell ECS for a mild profit.
“He didn’t intend for it to do this,” Derron Winfrey says.
For Winfrey, pinpointing the reason for ECS’ success is simple: “Being blessed with the foresight to see what’s going to happen in the industry and being smart enough to act on it,” he says.
Then, there are the company’s 13 employees. Four, including both Winfreys, have been with ECS for at least a decade.
“Being in Springfield, we’re lucky to find good help at a fair wage,” he says. “We never have trouble finding very talented people right here.”
The company also relies on a network of about 220 sales agents who work on a commission-only basis nationwide, and a call center to answer phones after hours. The call center, however, sends text messages to ECS employees in Springfield so they can personally return the calls.
“It’s very important that our phone calls are answered by people in the Midwest and that they’re handled by people working for ECS directly,” Winfrey says. “Our people are very smart, they’re very talented, they’re multifaceted. We do have to hire good people.”
When ECS ranked No. 2 among the 2010 Dynamic Dozen, Winfrey predicted that the company would close in on $100 million in revenues at the end of that year. Though the company fell short of that goal – which Winfrey attributes to the decline of the personal check and the extreme competitiveness of the cellular market – it is aiming high for 2011.
“In 2011, we definitely want to cross the $100 million plateau,” Winfrey says, adding that another goal is for the company to have its first $2 million-plus week.
To meet those aspirations, the company is planning a strong push into the texting arena of the cellular market, and it is looking at ways to revitalize its checking services.
The company is exploring EZ Check manager, an online product that allows businesses to streamline the check-payment process by helping them to collect cash faster and weed out bad checks.
“If things go well and the new products we are launching are even half as successful as we anticipate them being, this growth that you’ve seen could just be a sign of things to come,” Winfrey said. “That’s pretty exciting to think about.”
Click here for the complete 2011 Dynamic Dozen overview.[[In-content Ad]]
