Tom Foard has heard all the predictions of death, or at least substantial injury, to the newspaper publishing business with the proliferation of the Internet and the damages to telemarketing with the federal do-not-call list.

However, Publishers Circulation Fulfillment, of which Foard is the CFO, is far from withering as a circulation service provider for newspaper publishers. Three or four years ago, the company had eight clients. Today it has 36 clients and delivers more than 5 million papers a year.

That success, Foard says, comes with recognizing the changes in the marketplace and finding the potential benefits rather than focusing on the negatives.

Businesses in all sorts of industries face a similar dilemma. Change is expected, but how the company meets those changes, and even thinks ahead about them, can mean the difference between thriving and barely getting by.

Ten years ago, few higher educational institutions would have dreamed they would partner with third parties to assist students in finding financial aid.

In the last few years, most mortgage companies revved up their staffing and infrastructure to meet the sudden boon in refinancings due to low interest rates. Excited about the immediate prospects to their bottom lines, they ignored the fact that interest rates would rise again, increasing the need for debt consolidation services for people who overextended themselves in the low interest rate days.

The growing prevalence of e-mail and the Internet over the last decade led many companies to make significant expenses to upgrade their technology. Yet, until a few years ago, few thought about the need to protect their assets because of the doors opened by that technology. Now, technological security guards are a must to protect the company from infiltrators that can creep into and destroy their systems.

Taking direct approach to financial aid in education

"We're trying to be a change agent, not just a responder to change," says Mike Shaut, president and chief operating officer of Education Lending Group, Inc., a client of Leading Edge firm SS&G Financial Services.

Ten years ago, he and his partner responded in the marketplace to the horrible job that most higher education institutions did in educating students and their parents about financial aid opportunities. "Nearly two thirds of parents who have high school or college age students were unaware they could borrow the entire cost of their children's education (at lower interest rates)," Shaut says.

So they formed Education Lending Group, which is a full-service provider of financial aid products to students, parents and schools.

At the time, the primary shelf space for information on higher education loans came from the financial aid offices at colleges. A student or parent might inquire at the bank about student aid possibilities, but often the bank employees were unfamiliar with the products offered.

In the beginning, some institutions were offended by Education Lending's initiative, which included television advertising and direct mail campaigns to reach out to students and their parents. Only a year after Education Lending's marketing foray, though, one of the largest providers of student loans, Sallie Mae, got into the advertising act too. In the last few years, more players have entered the market.

"Now it's accepted. Schools will say, 'I saw your ad,'" Shaut says. Education Lending has partnered with 500 colleges to send out university-customized pieces to students about its services. It is a recommended or preferred lender at 600 colleges and universities, and an accepted lender at 600 more.

Even more recently, Education Lending saw an opportunity in the drops in interest rates. "Consolidating student loans became an attractive opportunity," Shaut says. "But lenders weren't telling students because they would see their yields shrink."

Education Lending stepped forward to fill the void, marketing to encourage students to consolidate their loans at a lower interest rate over 30 years through its company. In a $70 billion to $80 billion marketplace, Education Lending consolidated $4.5 billion in loans in the last 2.5 years. "Now lenders are compelled to start marketing," Shaut says.

Getting ahead of the interest rate jump

CoreStar Financial Group Inc. remains focused on its core debt consolidation business, despite the wealth of opportunities available in the interest rate drop and resulting dramatic growth in mortgage refinancings during the last few years.

"Now we're all sitting back kind of happy we didn't jump into that market," says Tomas Gordon, president and CEO of CoreStar Financial Group, a client of Leading Edge firm KAWG&F.

Instead, CoreStar is in a position to benefit from the refinancing aftermath as interest rates rise and people become overextended in their credit and face the possibility of defaulting on their loans. CoreStar works with clients to refinance their mortgages as part of a total debt consolidation loan program. Gordon says clients save an average $400 a month with the consolidations.

More people are requiring those services and even more are expected in the future, frequently as a result of their jump into the refinancing hoopla. These people may have opted for an adjustable rate mortgage because they were pleased with the low payments offered. But the "adjustable" part of the mortgage means they're paying more now and likely even more in the future as interest rates rise. Or some people opted to take advantage of the low interest rates by purchasing a higher value property and are maxing out their credit cards to maintain that property and lifestyle.

Gordon's company focuses on helping people through those financial over-extension problems.

That single focus has enabled CoreStar recently to leverage its own position in the marketplace. For example, CoreStar buys prospect lists from credit bureaus like many mortgage companies. However, CoreStar takes several more advanced steps in the marketing. It takes the list, evaluates the market as well as what loan products its customers are considering and develops well-researched response models. The targeted marketing expense also pays off in customer service. Employees can use that same research in internal training to learn their customers' specific needs and thus serve the customers better.

Another boon to CoreStar from the downturn in the refinancing business is the availability of quality workers. The job pool is much bigger now because those mortgage companies that responded to the short change expansion have had to lay off staff, Gordon says.

In addition, CoreStar is considering expansion opportunities and is looking to take over branches of those mortgage companies that opened to meet the sudden refinancing demand but now represent excess capacity to those companies.

"We're feeling our position now is stronger than it's ever been," Gordon says.

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