Strategies: Managing on the Web
There's more to the Internet than information. It's also about communication -- about getting closer to the people who matter the most: your customers and your employees
By now, you've probably heard of this Internet thing and the myriad opportunities the Web gives you to interact with people across the world. But chances are, you'd settle for something a little closer to home.
The Internet doesn't just let you introduce your company into countries and markets you've never before dreamed of; it also represents a terrific opportunity to enrich your interaction with the people you already know: your customers and your employees.
A large number of this year's Inc. 500 companies have used the Internet to enhance their communication with staff and customers alike. What follow are tales of three representative companies. Though their businesses and Internet strategies differ, each one has blended human-relations savvy with financial prudence to produce handsome payoffs.
Dealing with crabby customers
John R. Keeler knows his customers. As CEO of John Keeler & Co. (#182), an $8.7-million importer of crabmeat based in Miami, Keeler understands that the people he sells to -- wholesalers and distributors who in turn sell his shellfish to restaurants and supermarkets -- will waste no time shifting to his competitors if his prices are even slightly higher than the going rate. So until recently, Keeler's perpetual problem was how to increase his under-5% margin without raising his prices.
Keeler saw the Internet as a possible solution. His reasoning was simple: If he could use his Web site to attract new customers, then he could close more sales per hour without spending more on hiring new sales staff. Plus, if his customers switched to ordering on the Web, he'd reduce some nagging expenses associated with traditional sales, such as phone bills and fax paper. Those gains could easily offset any initial costs for Web design and technical consulting.
But Keeler didn't think his unwired customers would embrace Web shopping. "The Internet has a low priority for most of the industry," he explains. "People are caught up in the day-to-day business of pricing, supplying, and delivering." Still, Keeler figured it wouldn't hurt to ask his customers whether they'd order his crabmeat on the Web. One month, along with a batch of invoices, he sent out a survey, tailored to what he considered to be a technically limited audience, that included such basic questions as whether the customer had an Internet connection.
When 20% of his then-200 customers indicated that they would buy crabmeat over the Web, Keeler decided to convert his existing site -- www.onecrab.com -- from an information-only Web presence into one that was capable of conducting online transactions. Six months into the site's operation, Keeler has no regrets: 37% of his customers -- including 25% of his old customers -- are buying over the Web, and online sales now account for 50% of his total volume. On its own, the site has attracted 80 new customers. And most important for Keeler, his profits have increased by 2%.
Beyond improving the company's numbers, the site has allowed Keeler to manage his customer service better. Scheduling a delivery of crabmeat requires lots of planning. Will the product be shipped in cans or bags? By truck or plane? By which delivery company? Tasks that used to consume phone time -- and by extension, personnel time -- are now handled through online order forms, which contain drop-down menus replete with shipping and packaging options.
Keeler paid $15,000 for a local Web-design company to revamp his site. Although $15,000 is a pittance compared with what some companies spend on E-commerce software and site design, costs may rise for Keeler as Onecrab.com develops. He wants to hire an IT manager to maintain the site, which handles sales pretty smoothly but has sections that are outdated and could use the attention of someone whose full-time responsibility is keeping the site fresh. One chart that lists supply and price trends for his product is four months old, as is another section that is supposed to feature weekly columns by Keeler. "I have to plead guilty to not spending more time on it," admits the CEO.
Keeler has several initiatives planned for the new IT manager, the biggest of which is to begin communicating real-time price changes and order-status updates to customers' Web-enabled cell phones. Keeler thinks wholesalers will be especially receptive to that idea because they're a price-sensitive bunch who will buy food in large quantities and stockpile it if they think they've found a bargain.
Land of 1,000 consultants
The primary challenge of knowledge management is keeping track of who knows what. Glenn Gow of Crimson Consulting Group (#331) has a staff that consists of thousands of independent consultants, who all have credentials in the ever-broadening field of marketing. By 1997, the fifth year of his business's growth, Gow had found that he couldn't keep track of the 600 consultants he then used and all their diverse but overlapping areas of expertise.
Gow kept all 600 of their rÃ©sumÃ©s in a database, but as the demand for the company's services increased, the database -- which allowed for doing only rough keyword searches -- became difficult to use efficiently. If more than one Crimson employee tried to search the database at one time, the system would often crash. "We needed a system that was happy with many people poking into it at once," says Gow.
Up to that point, Crimson's site (www.crimson-consulting.com) had been a static presence. However, the site did encourage visitors to fax or E-mail their rÃ©sumÃ©s to the company, and for about a year it had provided a steady source of freelance consultants. Based on that track record, Gow wanted the site to remain central to Crimson's future stable of freelancers. The question was, Could the site somehow gather and filter information on the prospective workers?
If the site could somehow streamline the process -- automatically shunting applicants' credentials directly into a better database -- then Crimson would be able to hire and deploy freelancers with newfound efficiency. But Crimson, hovering at breakeven, couldn't afford to spend much on the project. Then, after checking with some technical consultants, the company got some good news. The site would need only minor changes, and the dream database could materialize by simply tweaking the Lotus Notes system Crimson already used for E-mail and project management. The costs would be moderate: about $2,000 for a new server, $2,000 for software, and $100 per user license from Lotus.
Of course, that didn't include thousands of dollars in fees for tech consultants and hundreds of hours of in-house effort. Still, two years into operating the new Web site, Gow is quite satisfied with its consultant-management features. Prospective freelancers, upon visiting the site, see much more than a plain "E-mail your rÃ©sumÃ©" section. Now applicants complete a short checklist that gives Crimson more information about their potential value to the business. The checklist includes such items as which large high-tech companies they've worked for (Cisco, Microsoft, and so forth), industries they've worked in (handhelds or servers, for example), and areas of expertise (international marketing, trade shows, and so on).
Now all the information shoots right into Crimson's database, which is searchable not only by the above items but also by a freelancer's going rate and even his or her social skills. (Crimson managers can also add to the system any observations they've made from interviews and reference checks.)
After the company found out how to plumb its freelancer database more efficiently, it embarked on a Web strategy to find more workers. Gow retained three associates who now do nothing but scour the Net all day for prospective freelancers. The recruiters search on job boards, such as www.monster.com and www.hotjobs.com; on sites for independent professionals, like www.guru.com and www.freeagent.com; and on Bay Area job sites, like www.craigslist.com.
Since it revamped the Web site and database, Crimson's freelancer roster has shot up from 600 to 2,400; the list jumped from 1,600 to 2,400 in the second quarter of this year alone. Gow claims that handling such an influx would have been impossible without the new technology, which has allowed the Los Altos, Calif., company to deploy freelancers with ease, even as demand for their services has boomed. (The company's 1999 sales of $6.4 million were three times the previous year's figure.) And the new database allows for multiple searches, enabling all seven people in the company's consultant-services division to search simultaneously for freelancers to match clients' requests.
It's become so easy for the company to locate qualified consultants that Crimson has added a new marketing feature to its home page: a box in the upper left-hand corner that reads, "Do you need immediate marketing assistance? Click here." After clicking, potential clients fill out a form specifying their marketing need, which the consultant-services division can then process and respond to within hours. Such rapid response was unthinkable with the old system. But Gow and his staff decided to capitalize on their newfound deployment speed by offering "immediate" marketing assistance. According to vice-president of information services Joel Borden, the box leads to one new customer a week.
A desire to give his customers more immediate assistance is what prompted Dan Gould of Synergy Investment (#219) to develop his company's Internet presence. By upgrading his Web site, Gould sped up his sales cycle, and now he closes a far higher percentage of his sales.
Synergy, based in Framingham, Mass., installs lighting systems that it guarantees will trim its customers' electric bills. Before the Web update, a Synergy salesperson would dazzle a customer with a presentation but wouldn't provide a detailed estimate of the costs and savings until a month later. By that point the customer could have either lost interest or moved, or the company could have been acquired, rendering the estimate useless.
Brainstorming about that problem with his board and employees, Gould hit upon the Internet as a possible answer to his lost sales. His sales force needed a tool that could help them close sales on the spot. If his salespeople could log in from customers' sites and provide reasonable estimates based on data they'd gathered that day in the field, then Synergy would win more sales and stop wasting time on detailed estimates for ultimately uninterested customers.
The difficult part was creating a Web-based program that could condense the estimate-generation process -- previously a manual procedure that took weeks to complete -- into a few minutes. Gould, who has so far spent $34,000 on the eight-month conversion, claims that the site, www.lightingbudget.com, has already surpassed his expectations.
Of course, the system still has a ways to go. The salespeople now use the site to produce estimates after they've returned to Synergy's headquarters rather than when they're out in the field with customers. Though that isn't how Gould envisioned the process, it is nonetheless a vast short-term improvement over the old system, since customers now receive estimates within 24 hours of a field visit. "As soon as we have confidence that all the salespeople can whisk through the program on the fly, we'll be logging in at client sites," Gould says. "We don't want them to fumble around in front of the customer." He thinks he's only a few months away from doing on-site estimate generation.
Gould projects that the site will "at least double" the number of estimates that the company can provide. That should lead to a substantial increase in revenues, especially if -- as he anticipates -- the percentage of sales that the company closes increases as its sales cycles grow shorter. And Gould is also happy about the labor time that the system frees up, now that the sales force no longer has to spend hours producing estimates by hand.
"There are so many better uses of a salesperson's time," says Gould. "We have a full plate of leads for them to follow up on."
Ilan Mochari is a reporter at Inc.
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