Best of the Small Business Web: A Room with a SKU
Company: Livingston & Haven Industrial
Revenues: $40 million
Web address: www.lhtech.com
Site launch cost: $14,000
Current technology profile: Sun Ultra 10 Server, Gateway2000 running Microsoft Windows NT, Apache HTTP server, Oracle WebServer
Why we love it: An industrial distributor creates a self-service dream with superfunctional client pages
Category of success: Utility
Livingston & Haven has the Clark Kent of Web sites. A casual surfer stumbling across the company's home page wouldn't give it a second glance. But beneath that drab exterior lurks the power of an industrial superhero.
The 52-year-old L&H, in Charlotte, N.C., distributes hydraulic and pneumatic devices: fluid-powered drives, valves, and other parts used in everything from elevators to airplanes. The company represents 20 major manufacturers and has about 8,000 regular customers, for whom it performs a variety of services. It sells them products. It repairs those products. It helps monitor their inventories so that, for example, Caterpillar never runs out of the controls it needs to make its earth-moving equipment actually move earth. The Web site helps L&H do all those things and more.
To date, only about 30 companies buy from L&H on-line, but revenues from the site doubled every month from March to June. The company hopes to have its 3,000 top customers, accounting for 70% of revenues, relying on the Web by the end of 2000. And why wouldn't they do so, wonders CEO Clifton B. Vann III. The Web site manages the customer relationship from soup to nuts, which means that customers need to depend less upon the 9-to-5 limitations of human help.
The Web site wasn't much of a stretch for L&H, which is unusually technology intensive for its industry, says Vann. Over the years, the company developed a powerful customer database containing elaborate purchase histories as well as information on the types of machines running at its clients' sites. So when the Web came along, all Vann's half-dozen IT folks had to do was give buyers a window through which to peer at the old data and plug in new information about themselves (hence the low development cost). The site that L&H debuted in January included a complete catalog, replacing the company's hard-copy version for a savings of $100,000. But far more interesting -- and more important to L&H -- is the activity taking place behind the scenes.
The site's organizational metaphor is the customer "room," a password-protected chamber furnished with live information on everything in L&H's database pertaining to that account: past order history, current order status, a menu of frequently purchased items, and customer-specific pricing. L&H sells some large -- and expensive -- hydraulic systems that it also repairs; customers using that service can check digital photos to see how their patients are progressing. The company also maintains lists of all the hydraulic parts used in its customers' machines -- regardless of whether the customers have ever ordered those parts from L&H. As a result, "if the customer needs a spare item, he doesn't have to crawl all over the machine looking for the number; we can just show it to him on the Web," says Vann.
Also in the rooms are lists of customers' current inventories of L&H products. Every time customers use an L&H part, they let the company know by E-mail. L&H notes the change on the list and, when the volume falls below a preset floor, automatically sends out reinforcements. "It fits in with just-in-time theory," says Vann. "We can keep them fully stocked with items they're using just by looking at the movement of those items through their rooms."
The customer rooms have proved so effective that L&H has extended the concept to its employees. The company's staff site lives on one of the same servers as its external site and draws on the same applications. Every employee has a room furnished with some common information -- HR policies, links to FedEx -- and some more specialized features, such as a contact-management system for sales reps. Employees can even add links to outside resources, so when they sit down with that first cup of coffee, their favorite news sites are just a click away.