Real Service

Can providing customer service as outstanding as PC Connection's really be this simple?

I wanted to write about a company -- a mail-order company -- that has become one of the fastest-growing businesses in America, with room in the margins to finance more than $100 million worth of growth. Its customer-service practices -- reliability, courtesy, support -- have set new industry standards. This stuff is so basic, the question we should be asking is why we all don't treat our customers this way. -- R. A. M.

Most up-country enterprises don't make unusual demands on rural utilities. Certainly Patricia Gallup and David Hall had no idea theirs was going to. Back in 1982 they meant only to get into something that would keep them ensconced in their tiny New Hampshire town, safely tucked away from the trappings of bona fide commerce. Mail order happened to fit the bill nicely.

Pretty soon, though, the ancient electric and telephone lines along the 20-mile stretch of road that meanders to PC Connection's facility in Marlow, N.H., had to be entirely redone, brittle wire by rickety pole. How else could the two founders hope to run the mighty IBM AS/400 computer and complex Rolm PBX that their micro and handset inadvertently had turned into? By the time the upgrading was finished, their original $8,000 investment had undergone a startling upgrade of its own: from sales of $233,000 in '82 to an estimated $120 million for '88.

No one grows 183% a year in mail order these days merely by slashing prices and waiting for the postman to knock (or, more accurately, for the phone to ring). Not when you're dealing with the fussy microcomputer crowd. Ask any of the scores of companies that went broke trying. If the odds were stacked heavily in favor of failure in mail order, what did the winner have going that was different?

"Plain common sense," Gallup discloses, most of which came from the owners having been customers themselves. "Living up here, we had to buy through mail order. In the past, when mail-order customers got super rake-off prices, they expected to pay at the other end. We wanted to dispel people's fears about ordering over the phone, so we started right in offering a high level of customer support.'

They succeeded. Now, their customers expect not only to be raked off, but to be granted such theretofore unlikely favors as prompt delivery, accurate order filling, honest billing, reasonable freight charges, seller-endorsed product reliability, current merchandise, generous warranties, promptly answered phones, deep inventory, knowledgeable salespeople, and aid when the thing doesn't work right. In other words, blandishments other companies try to avoid because there isn't enough room in 10%-over-cost pricing to pay for them.

To launch the nation's first mail-order business exclusively devoted to the then-six-months-old IBM personal computer, Gallup (who was 28) and Hall (who was 32) formed a customer-support staff of two: themselves. They dispensed pre-, during-, and post-sale information freely, and for free. Any caller could ring up with any question at any time and get a courteous hearing. Today the staff is considerably larger and its largesse less revolutionary, but back then it was unheard of for any company in the microcomputer industry, let alone mail order, to accept an outside call for help without first screening for the serial number and date of purchase of the product. "A lot of the things we've done," Gallup's modesty allows, "have improved the quality of service.'

Doling out intensive instruction about complex problems shrinks generically tight mail-order margins even tighter; after all, consumers don't pester customer service at Frederick's of Hollywood to find out how to use its goods. Yet it's standard policy at PC Connection Inc. (PCC, from here on) that for each product offered there is at least one person on staff who thoroughly understands how it works. If you own a spreadsheet program that is printing out smiley-face gibberish, just call PCC's toll-free line, and a trained person will troubleshoot the problem over the phone -- even if you got the disks in a plain brown wrapper from some guy with a pushcart.

Doesn't that mean PCC may be hand-holding the buyer of a product that another reseller has already squeezed the profit out of? Sure -- how else do you build volume? As far as customer-affairs director Peter Haas is concerned, the best call to PCC is one that begins, "I bought this somewhere else, but . . . " Concludes Haas: "We just made ourselves a new customer.'

Being out among the lonesome pines as they are, you'd think PCC officers wouldn't be all that fussy about who handles the phones. On the contrary, they're so demanding that only one of every 30 applicants who makes it to the interview stage is offered a job. Only college graduates are considered for positions in sales to begin with, the theory being that at least they'll possess a modicum of communications skills and have an inkling of where the other 49 states are located. "We don't just fill a slot, we hire the right person," emphasizes personnel director Gallup, who checks out candidates' backgrounds as carefully as if they had been nominated for secretary of defense. Why such scrutiny? Because "they're creating customer contact."

There has to be something to the notion, judging from a recent poll undertaken by a leading microcomputer magazine in which PCC absolutely schneidered the competition. Among computer mail-order companies, PCC was rated tops in providing customer service, outpolling the next four contenders combined. PCC also handily won the reputation category, receiving 54% of the vote compared with a mere 19% for the runner-up, and it was uncontested in the three remaining categories: price, available stock, and variety.

Also in 1988, another microcomputer publication ranked PC Connection its number-one-read advertiser, well ahead of flossy, big-name spreads from Lotus Development, Ashton-Tate, NEC, and Toshiba. PCC intersperses typical product listings with corporate-image ads so slick that magazines that once relegated them to the back pages with the rest of the six-point-type crowd now give PCC run of the book. One reason the ads are so well read is that some actually are meant to be. Among the company's first was a double-page spread headlined: "If One More Person Asks Me a Question About Multifunction Boards, I'll Write an Ad." Somebody must have asked, because the text went on to detail answers to the most frequent technical queries the PCC staff got by phone. "It's the type of expenditure that comes back to you in sales," PCC's president and chief administrative officer Gallup says, "even if you can't measure it."