The cofounder of PC Connection explains how her company's success stemmed from its extensive customer support, and describes the complications that arose by operating in rural New Hampshire.
The launch of PC Connection required $8,000 and the recognition by its founders that if they desperately needed something, so must everybody else
Direct response, mail order, catalog marketing--call it what you will. It's rare that one practitioner in the low-margin, not-always-highly-regarded, and often cutthroat telesales industry earns customers' trust as completely as PC Connection has. In reader polls conducted by PC World magazine, the 16-year-old reseller of brand-name computers, software, and peripherals was named best in computer mail order for seven of the past eight years. PC Magazine calls it one of the 100 most-influential companies in the entire computer industry. Its secrets? Service--before, during, and after the sale. And overnight delivery. And employee loyalty. And an instinct for what people want. One distinction PC Connection has relinquished, though, is that of being New Hampshire's largest private employer. On March 3, the company went public, making cofounders David Hall and Patricia Gallup each $103 million richer--and reminding us of what even the most modest start-up can become. Gallup recalled her company's beginnings in a recent interview with Inc.:
PC Connection's origins go back to 1976, when cofounder David Hall and I met. We were both veteran backpackers, serving as a support crew to endurance hikers on the Appalachian Trail. Our function was to anticipate the arrival of the hikers at different points and to take care of whatever needs they might have. From the beginning David and I shared a belief in trying to put ourselves in other people's shoes. We learned how to work together to come up with solutions to get tasks accomplished. That all came into play when we decided to go into business together.
In 1980, David had recruited me for his family's business, which had just moved to an abandoned woodworking mill in Marlow, a rural town in southern New Hampshire. The company, Audio Accessories, made broadcasting and recording equipment. It published a catalog, provided service to customers over the phone, and shipped products to customers by UPS--all of which gave us a taste for direct selling.
The urge to strike out on our own came after we tried to buy a computer for Audio Accessories. To find out more about the machine, which had just been introduced into the marketplace by IBM, we pored through business and technical magazines and called the companies we read about that were manufacturing and developing products for the PC. It was quite a chore to get the information we needed to make a purchasing decision. We could see there was a niche for someone to serve as an intermediary for people who weren't familiar with computers or technology, someone who could both provide new products and serve as a source of information.
That was when stores like ComputerLand were just getting started. The closest retailer was more than two hours away from Marlow. We figured that a similar lack of retail access was the case for most of America as well, which would make mail order the logical way to purchase computer equipment. We were confident we could make people feel comfortable buying over the phone and having the goods shipped via a courier service. After all, we'd been ordering hiking supplies through mail-order suppliers for years, and we knew how we wanted to be treated.
In July 1982 we invested our entire savings to get our new business off the ground--$8,000 in cash. (Typical Yankees, we didn't believe in borrowing; at that time I didn't even have a credit card.) We carried 12 products initially: Peachtree business software, AST multifunction boards, a few games--products that had received good media coverage. We took out a ninth-of-a-page ad in the back of Byte.
When the magazine's on-sale date arrived, David and I manned the two phones we'd put in, armed with a spring-loaded alligator file to hold the orders we'd be writing. No calls came in that day, or the next. But on the third day, the ringing started. Why did it take so long? Maybe it takes three days for readers to make their way to the back of the magazine where budget ads like ours are placed. I still don't know for sure. We stopped worrying that third day--and the phone hasn't stopped ringing since. In fact, our business requirements for phone lines and power grew so rapidly that new wires had to be run all the way from Marlow to Keene, the closest "urban" center (population 23,000), about 15 miles away. New poles had to be put up, too, because the larger lines were so heavy.
David and I did everything. We took orders during the day and took care of the rest of the business at night--packing the orders and shipping them out, replacing inventory, and doing more research. We worked out of an old inn in Marlow. We kept our records in a metal filing cabinet until we could buy a computer for PC Connection's use. The first person we hired was someone to help out in the office on the phones; the next, someone to do shipping. The first person we hired full-time still works with us today. Getting help became a challenge in so remote a place, so we bought studded snow tires and icebreaker windshield wipers for employees to entice them to make the trek to Marlow, known as the Icebox of Cheshire County.
We always aimed at being a one-stop-shopping situation. We didn't want customers to have to go elsewhere. More important, we wanted to offer the best customer service in the industry. One of the first things we did was to develop a technical-support group that could supply information to people before, during, and after the sale. The advice was free, and people could call in even if they hadn't purchased the product from us. When someone called us and admitted, "I bought this somewhere else," we helped him or her anyway. We had made a new customer.
In the computer industry, speed is something people expect, because often they have problems that need to be solved immediately. We wanted to have the best and fastest delivery system in existence. So one of the programs we instituted in the wake of toll-free tech support was "Everything Overnight," which we trademarked. Initially, everything ordered by 8 p.m. was received the next day. Now customers can order our products until 2:45 in the morning and still receive them overnight--actually, the same day. We feel it's important to offer lightning-fast delivery. It's what makes us stand out from our competitors; it's also what distinguishes our business from other companies that sell computer products--the incredible convenience.
Would we have grown faster in an urban area? Possibly. But for us our country location has paid off. It's where we wanted to live. We've since relocated to central New Hampshire, where there's a larger labor pool. But Marlow, our hometown, will always be a part of who we are. Having our headquarters there made us unique. Everyone dreams about being able to live and work in a magical, rural town like Marlow.