When the demise of VSI Holdings Inc., a training and marketing company in Bloomfield Hills, Mich., became apparent several months ago, two of its customers moved quickly to replace it.
Audi of America Inc. had been using VSI since last May to make its event spending more efficient, to measure results and tie events into advertising.
Four years ago, the marketer took on the Volvo Cars of North America account to handle call centers and eventually direct mail.
In June, VSI will close, the victim of a struggling economy and a discontinued credit line.
On April 29, Audi moved its event marketing account and the seven VSI people who had worked on it to MVP Communications Inc. in Madison Heights, Mich. MVP has handled Audi and Volkswagen press events, dealer meetings and vehicle introductions for a few years.
Also in April, Volvo awarded its call center business to Percepta LLC in Livonia, Mich., a joint venture between Volvo's parent company, Ford Motor Co., and TeleTech Holdings Inc., an event marketer and training company in Denver. On May 2, the automaker moved its direct mail business to its creative agency, Messner Vetere Berger McNamee Schmetterer Euro RSCG in New York.
"The good thing about it is we paid for the brainpower and we owned the processes," said Phil Bienert, Volvo's manager of e-business and product strategy. "We just needed to replace the arms and legs."
Volvo spent up to 15 percent of its $94.3 million marketing budget with VSI last year, or about $14.1 million.
Audi sees the change as an opportunity.
Maria Nahigian, the automaker's event marketing manager, said while the company did bigger and more events with VSI, "we still have a long way to go. Events we thought would be good were not as successful. The venue might not have been the right fit or the people were not all the way there with us."
VSI measured and provided Audi with a report within 30 days of events. Audi will change the way it measures under MVP, Nahigian said, but did not give details.
VSI also handled delivery of marketing materials, such as brochures and posters, to Audi dealers. Audi put that portion of its business up for bid a few months ago, said Audi spokesman Steve Keyes.
"We had some inclination things would be changing, so we were already working with VSI to transition the business," he said.
Audi plans to select finalists for the dealer work by the middle of this month.
VSI, founded in 1961, lost $2.5 million on revenue of $23.3 million during its first fiscal quarter, which ended Dec. 31, the most recent numbers available. That's compared to earnings of $1.4 million on sales of $43.3 million for the year-ago period.
VSI also trained dealers for Ford and General Motors, the company's two largest customers. Both Ford and GM said the closing will have little impact on their training programs.