How one whitewater-rafting company has had a surprisingly smooth ride on the Internet.
How one whitewater-rafting company has had a surprisingly smooth ride on the Internet.
Web Awards: General Excellence
Recipe for revitalization: Take one 40-year-old family-owned river-rafting business. Add the Internet. Shake well.
Man, that sky is blue. What a gorgeous day.
You are on the first mile of your trip down the North Fork of California's Stanislaus River, but you're already in a section so rugged they call it Rattlesnake. Cutting through the craggy beauty of Sequoia country, the North Stan is a rafter's delight, offering miles of stair-step waterfalls and boulder gardens like the one at your feet. You turn and see three rafts shooting past the rocks.
Yet there's no spray on your face, no fresh river air to enjoy. You're not even really there. You're gazing at this scene from the comfort of the Web, on the site run by All-Outdoors Whitewater Rafting.
The site's coolest feature may be its variety of such virtual tours of the river routes that the company serves. The sharp, three-dimensional, panoramic photographs are produced in-house using technology licensed from Internet Pictures Corp., in Oak Ridge, Tenn. With your mouse, you can look up, down, or around each tour as if you were standing in a spherical snapshot. Pretty sophisticated stuff for a business that to many is decidedly low-tech.
AO Rafting, as they call it, is a multigenerational family business started by a schoolteacher nearly 40 years ago. It's a regional company in a seasonal business, with about $2 million in annual revenues and fewer than 20 permanent employees year-round. (The company employs more than 100 people during its eight-month annual season if you count some 75 part-time guides.) Based in Walnut Creek and Lotus, Calif. -- right by the mother lode that drew the forty-niners out West for the Gold Rush -- AO Rafting seems isolated, deep in canyon country. Yet it has built a Web presence that puts to shame a lot of other businesses with more tech savvy and resources.
A business site doesn't win awards just because it has cool features, though. It has to work for both the company and its customers. That's what distinguishes www.aorafting.com. Sure, customers can tour the Klamath and Tuolumne rivers through the site's virtual tours. They can also plan trips right on the site, check the availability of tours, make reservations, access real-time information on water conditions, refer the company to friends, and find discounts on trips. The site has replaced almost all the traditional marketing that AO used to do.
CEO GREGG ARMSTRONG: "The whole key is that I can get the information to make smart decisions."
It helps that AO is a tight little privately held business that is 100% owned by the Armstrong family. Decisions can be made rapidly. The company is located within easy driving distance of Silicon Valley, where despite the dot-com bust, there is still an affluent, sophisticated customer base that will naturally look for the company on the Web. Most of AO's staff members have been with the company for years and know the business intimately. Almost all have been or still are guides, experts at the sport that is the company's core competency.
CEO Gregg Armstrong, who with brother and operations manager Scott now runs the company that their father founded, has always had an interest in marketing. Despite limited company resources, he has given a free hand and precious resources to Webmaster Jamie Low, a former guide who once had no other ambition than to spend every day on the river.
So this is a company with a product that generates passion in both its employees and its customers. It has a CEO who is committed to the Internet. It has very little turnover among its employees, many of whom have been with the company for years. The industry is well suited for presentation on the Web, where a good story is best told in photos and short blocks of text. And it has been very, very smart about the way it uses the Internet.
Patriarch George Armstrong was a real rafting pioneer. In 1961, when he and his brother first dropped an old military raft into the river, the sport didn't exist. The brothers were among a small group of enthusiasts who rode the rapids on weekends -- early adopters, if you will, not unlike the first surfers who were then bringing Hawaiian long boards to Ventura Beach.
Armstrong was a mechanical-drawing teacher in the public schools of Concord, Calif. He organized something of an outdoors-activities club for the underprivileged city teens he taught. He'd take them into the canyon, schlepping surplus rafts and old Mae West life vests, and show them a hell of a time in the country.
His own kids -- Mark, Sherri, Gregg, Randy, and Scott -- would spend summers and weekends at their riverside cabin. By 1964, when Armstrong officially established All-Outdoors Adventures in Nature for Youth, his older children were already experienced guides. The whole family spent a lot of the 1970s bringing tour groups into the waters. The company grew slowly, traditionally, by word of mouth.
Although their father carries the title of administrative supervisor, it's Gregg and Scott Armstrong who run the company on a daily basis. The two brothers each manage one of the company's primary locations -- the reservations office in Walnut Creek and the operations headquarters in Lotus. Siblings Mark, Randy, and Sherri serve as advisers. All of them have other lives but still spend days on the river guiding groups of customers. AO has always been the first workplace of choice for the Armstrongs. "Everybody has a stake in the company, some more than others," says Gregg. "Me, my dad, and Scott are the majority shareholders."
Scott and Gregg trace the evolution of the Web site back to a conversation they had on their parents' lawn in September 1993. It had been a very good season for rafting, and 1993 became the company's first million-dollar year. "We made a decision to hire some employees and grow," Gregg says. "Dad had never thought of it so much as a business. He enjoyed it as a way to teach people about the environment and how to enjoy the outdoors.
"The first thing we did was to immerse ourselves in the growth culture of Silicon Valley," says Gregg. "I cold-called interesting companies. I wanted to know how they ticked and to figure out who would make decisions about river trips. Our whole goal was to grow by getting corporate customers. We sold packages as off-site, team-building exercises."
It worked. In the 1980s, revenues ran between $500,000 and $750,000 a year, depending on the season. Since the mid '90s, "we have been steadily increasing to the current $2 million," says Scott. The biggest single factor: the Web.
When AO hit $1 million in annual revenues, it was spending more than $150,000 a year on marketing, which consisted of glossy print catalogs, display ads in the yellow pages, regular direct-mail campaigns, and discount programs for individuals and corporate groups.
It was too much for the tiny company. "I felt like I was managing a whole train of marketing programs," Gregg says. "My hours were climbing to 60, 80 hours a week. Instead of 10 avenues at once, I wished there was one way to reach everyone."
Needing help, he turned to Jamie Low, then a guide. Low had studied marketing in college, and one day Gregg talked to him about doing some marketing work for the company. "I was reluctant, I can tell you," says Low, who didn't want to come indoors and give up his days on the river. "But they kept telling me that guiding was too simple, that I probably would want to do something that would help with my career."
Gregg brought Low in as his right-hand man, helping to run the reservations office and do the marketing. At the same time Joe David, the company's graphic designer, was telling Gregg that AO needed to jump on the Internet. "And I was saying, 'What Internet?" Gregg says. "One morning in '95 or '96, I hooked up the computer and spent 10 or 15 minutes looking around. I turned to Jamie and told him our future was on the Internet -- and he was the guy who was going to take us there."
Gregg knew that Low had done some work as a graphic designer and had a methodical way of approaching problems that seemed suited to the Internet. Once Gregg gave the word, Low made the Internet his project for the next six months. "The first thing we did was set up an E-mail address," Low says. "We were cautious, asking, 'This Internet thing -- is it a fad or will it take off?"
Gregg was more confident. "I was so used to looking at a computer screen and seeing nothing but monochromatic text," he says, "and suddenly I'm surfing and seeing these companies presenting themselves beautifully. The Internet could express everything I was trying to pack into all of the other marketing materials. A print brochure was so expensive to produce that I had to live with it for five years. The Internet was much easier to update. It could replace this marketing monster we had built."
AO locked up its URL right away and set goals for the site that it would build. "It had to be more than an advertisement," Gregg says. "It needed to be functional so that people could get what they needed. It needed to work as a virtual call center."
There were a few false steps. An early version of the site made heavy use of frames, an annoying and now rare device that many browsers couldn't handle at the time. Early on, the site's three navigation buttons were on the bottom of the home page, so customers had to scroll down to see them. "That's when we realized we needed to place the navigation bar on the left, so it would be visible when you opened the site," Gregg says.
In the spring of 1997, Low launched a new iteration of the site, one that had basically the same architecture it uses today. "It wasn't long before we realized the time and energy he was putting into the site was reaping huge dividends," Gregg says. "In a few short months, we went from zero to generating 55% of new revenues on the Web." Other costs came down right away. "Counting labor, we had been spending 20% to 25% of our revenues on marketing at one point," he says.
"With the Web, it's now about 5% to 10%," Scott adds, completing his brother's thought. "Between labor costs and marketing, we're spending almost the same amount of money, but our revenues are much higher."
From the beginning, Gregg, Scott, and Jamie figured that the site had to be easy to run, easy to find, and easy to navigate. Using such tools as a software package called Wordtracker that helps choose useful keywords, AO pursued good placement on search engines, registering on all of the majors. (Gregg's favorite is Google. Using it to search the word rafting, he is only a tiny bit disappointed when AO comes up as the second listing, not the first.) Now something like 70% of the company's new business on the site comes through search engines, according to Low.
FOUNDING FATHER: When George Armstrong first dropped an old military raft into the river, the sport of white-water rafting didn't exist.
With so much information listed on the site, AO has been able to limit the money it spends staffing a call center. "If we were still doing this the old way, we'd have to spend twice as much as we do now," says Gregg. Although the company is spending about the same $150,000 a year in marketing as it did at the height of its traditional programs, the site now accounts for roughly 90% of that expense. And it delivers far better results -- and ones that are easier to track.
Long before AO got on the Web, Gregg Armstrong and company had created a custom-software system for tracking reservations. Once the site was up, AO was able to feed a lot of new data into the software. Today Gregg is able to generate reports that parse customer information into fine detail. He can tell just how much of his business comes through the site -- 84% in 2000, according to the numbers -- and exactly where those customers are coming from.
The reports break out exactly how much revenue comes from corporate programs, word of mouth, yellow-pages ads, AAA referrals, personal referrals, or -- just in case the CEO missed anything -- a category called "Other." For a numbers guy like Gregg, that kind of data is better than gold from Sutter's Mill. "The whole key is that I can get the information I need to make smart decisions," he says. "Without that we'd be screwed. We'd be running on instinct."
You might think AO is constantly sinking money into Web development. Not so. The site is mature now. It works, so there's less need for experimentation. "This is a time to step back and evaluate," Gregg says.
Besides, it was a tough season this year. A light snowpack lowered river levels. Worse, California's energy crisis crunched the entire industry. "The majority of our business is on rivers that provide hydroelectric power," says Scott. "The allowances of water for recreation were very low."
Still, the company has plans to further refine its Web site. For example, Low wants to get a site map up soon. AO is also pursuing some co-branding outside the industry. "We have 12 other sites driving traffic our way, but I won't tell you what they are," Low says. Doesn't want to alert the competition, you know.
AO continues to pursue traditional marketing, although nothing like it did in the old days. "When we started the site, we thought we'd eliminate the printed materials in three years," Gregg says, "but you really need both to support each other. The printed materials have to be as good as they ever were to compete and build credibility."
"We once thought the Web would be a onetime investment, like a catalog," says Scott. "Put up the site and lean back, and it will work for you over time. But that's not the way it works. In the '70s and '80s, our customers were people on the edge, real enthusiasts. Now our customers are people who will do something else if they don't go rafting."
The company's Web strategy has done more than prove itself. According to Gregg, revenues from the site alone were $55,000 in 1997, $260,000 in 1998, and $600,000 in 1999. In 2000, the site brought in $760,000. "When I look at $760,000 from the Web and compare it to $34,000 from ads in the AAA magazine, I know it's well worth the investment of resources," Gregg says. In fact, he's sure it's the best investment AO has ever made.
Michael Warshaw is editor of Small Business Computing.
A Site to Behold
There are something like 270 pages on www.aorafting.com, organized in a simple architecture designed for easy navigation, according to Webmaster Jamie Low. Visitors are greeted by a home page with a moderate amount of text, some pictures, and lots of links. "Your Best Source for California Whitewater Rafting River Trips," it says -- a carefully written slogan. "It's all about search engines," says CEO Gregg Armstrong.
Four large navigation buttons are stacked in a vertical column on the left side, one for each of the site's main sections: About All-Outdoors, California Rivers, Plan a Trip, and Contact Us.
The About All-Outdoors link leads to a company backgrounder. Those who want to check out AO can click to histories of both the company and the Armstrong family, a guest feedback page, and a list of the governmental permits that AO holds. There are also confidence-inspiring testimonials from some government-agency officials: "All-Outdoors is an outstanding outfitter and partner to BLM." -- D.K. Swickard, Bureau of Land Management.
California Rivers is the shopper's page. It opens to reveal a map with buttons for each of the 12 rivers to which AO brings its customers. In the left-hand navigation bar, the rivers are organized by the skill level they require. Click on a river button for selections of photos, trip descriptions and fees, and another route to the 360-degree virtual-reality tours. "Redundancy is important," Low says. "Make sure you have a lot of links to the different pages."
Plan a Trip takes visitors through a four-step process to choose a river, select a day, and make reservations.
Lastly, Contact Us also provides links to the reservation system, as well as a catalog-request page and links to provide feedback on trips or even the site itself.
Just about every page has a photo of a spectacular locale. There are plenty of opportunities for visitors to volunteer information by using feedback pages or by signing up for the company's E-mail newsletters, to mention two.
One thing you can't do on the site is complete a reservation. You can pay by credit card and you can pick your river, but the system stops short there. "We have people send in a form, and a human being always gets back to them," says Low.
The reason for that limitation is that reservations are made way ahead of time, before anyone knows what water conditions may be. Plus, in order to gauge a rafting party's skill level and ensure that customers understand that their accommodations won't exactly be the Ritz, AO needs more interactivity with its customers than its Web site can now provide.
Copyright © 2001 Michael Warshaw.
The 2001 Inc Web Awards
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