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Continued: Lessons people want to Axcept

  • Article by: TODD NELSON , Special to the Star Tribune
  • Last update: May 4, 2008 - 11:06 PM

Korey Erb went to film school and holds the title executive producer, but he's not out to make the next Hollywood blockbuster.

His job might be even tougher: Enticing audiences, typically people who work for his client companies, to learn about health care plans, financial services and employee benefits.

Important stuff, yes, but hardly Oscar-worthy.

To lure viewers into learning -- and wanting to learn -- the dry details of Health Savings Accounts (HSAs) and 401(k)s, Erb and his Minneapolis-based Axcept Media rely on a dose of Tinseltown magic and video game interactivity.

Axcept Media creates multimedia websites, CD-ROMs and DVDs that attract attention, typically with video clips of actors, filmed in front of green screens, breezily introducing subjects as they appear to do such things as drive up to a ski lodge or pull tape from a giant-sized office dispenser.

The clips set up story lines that offer viewers opportunities to dig deeper by clicking to reach additional videos, documents or websites to get further information, all at their choice and pace.

"The whole idea here is that the end user -- the employee -- is actively engaged with the message," Erb said. "These are just not sexy topics that people will take their free time to explore, so how do we make these more engaging and more educational?"

Studies show that people retain more information by hearing, seeing and doing than by passively watching a videotape or PowerPoint presentation, he said.

"If we make it nonlinear, if we make it interactive, it's going to allow people to be more engaged and more in control," Erb said. "If we know that we're in control, we can get what we want and then pass it along or dig to the depths of what we need and then get back to what is more important to us in our day."

The proof that Axcept Media's approach works, Erb said, is that the company's sales have grown, with revenue doubling almost every year since he founded it in 2002 in a spare bedroom. Last year, sales reached $1.6 million, Erb said.

While basic multimedia solutions can cost a few thousand dollars, a full production with video, actors, design and programming work can cost tens of thousands of dollars or well into six figures. The company has 14 employees and a stable of 25 contractors it regularly taps for video and other production.

Erb learned about film production at Full Sail University, a multimedia film school near Orlando.

He got an informal education in software and Web programming as director of production for a startup Internet-based TV network in the mid-90s. His film and Internet experience awakened his entrepreneurial spirit.

Blue-chip clients

"I wanted people to accept media as a viable solution,'' he said. "And that's why our name is spelled with an 'x' -- it's a combination of exceptional media with encouraging people to actually accept media as a solution."

Axcept Media has attracted some blue-chip clients, including UnitedHealth Group, Kroger, Boston Scientific and Allianz.

Axcept Media produced several interactive CD-ROMs and websites for clients of ACS/Mellon, according to Melissa Hohertz-Foat.

Hohertz-Foat, formerly with ACS/Mellon and now a vice president at Bank of America in Minneapolis, said an "electronic magazine" Axcept Media created to inform a client's employees about a new benefit option drew a tremendous response.

An employee enrollment rate of 8 or 9 percent is considered successful, she said; the Axcept Media campaign produced a 55 percent enrollment rate.

"People said, 'I've never enjoyed learning about something so much as this,'" Hohertz-Foat said. "What's different with Korey and his team is they have a background that enables them to understand how to communicate a message. He starts with the idea of entertaining an individual to get them to listen to you."

Most of Axcept's clients are Fortune 500 companies. To reach small- and mid-sized businesses, Erb teamed with Nathan Holm, Axcept's vice president of client services, to start LearnCDHC earlier this year. (CDHC stands for consumer-directed health care, a specialty Erb and Holm have developed at Axcept.)

Employers or health-care companies can use the LearnCDHC Web portal to communicate with employees or consumers. Companies get a branded website with generic videos and areas they can customize with their own documents or other content.

To use LearnCDHC, clients pay a subscription rate of $155 a month plus a $350 setup charge, or $1,899 a year paid in advance with no setup fee, Erb said.

"It's designed to help the [health care plan] brokers educate their clients and their clients' employees using new media," Holm said. Small and mid-sized companies and brokers "aren't going to be able to create their own customized pieces, so what we created is a chassis [on] which they can customize and leverage that economy of scale to educate those marketplaces."

Erb plans no immediate changes other than to continue to grow and reach certain goals. Getting acquired by a larger consulting group might be a future step.

"We definitely would like to continue to grow and to control our own destiny," Erb said. "There will be a point where we've grown to where it would just make sense for somebody else to acquire us and to funnel us into their mechanism for reaching all of their clients in a truly calculated fashion."

The expert says: Mark Spriggs, chairman of the Schulze School of Entrepreneurship at the University of St. Thomas Opus College of Business, said Erb has a good idea with Axcept Media.

"It's an interesting way to present information that not many people actually want to read," Spriggs said. "It's just such a nice, scaleable idea."

An acquisition could be a concern, Spriggs said.

"The biggest challenge any time you buy a creative business like that is holding onto the people that were the creative key," Spriggs said. "It's typical of the creative trades, advertising, promotion or PR: Once they become part of a bigger organization, that can choke off exactly what it is you wanted to get.''

Todd Nelson is a freelance writer in Woodbury. His e-mail address is todd_nelson@mac.com

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    Business: Interactive marketing and communications company specializing in health care, financial services and employee benefits.Founded: 2002Headquarters: MinneapolisWebsites: www.axceptmedia.com; www.learncdhc.comEmployees: 14...

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