Furniture That Fits Techline, which installs custom desks and such, gets a makeover.
(FORTUNE Magazine) – For most of its 20 years, Gavin Bromell and Tom Nathan's Manhattan furniture business has grown steadily. The company, Techline Studio, doesn't flog the commodity bookcases and desks you see at every office-supply store. Instead it specializes in taking premade desks and wall units and custom-fitting them into the odd shapes of cramped office buildings, hospitals, universities, and apartments in the New York City area. But the end of the dot-com boom and the 9/11 attacks brought that growth to a standstill. So Techline cut staff, closed showrooms in the burbs, and hunkered down. Lately, Bromell and Nathan sense that business is coming back, and they're eager to avoid the mistakes they made in the late 1990s, the last time business was good.
"We were in what someone described as 'small-business hell,'" says Bromell, an architect with round glasses, a goatee, and a habit of quietly singing "Help Me, Rhonda" as he pads around his office. "We had 26 employees and revenues of about $4 million a year--too big for two people to run and too small for middle managers." Now revenues are half that size, and so is the staff. Margins are better, but the duo would like to start growing again without ramping up overhead. That means finding ways to make their already hard-working sales force more productive.
Designing their website is frustrating too: Emphasize price, and Techline loses out to furniture giants like Steelcase that don't offer quirky (and expensive) design services, says Nathan, an MBA who describes himself as more "nuts and bolts" than his partner. (Adding to their web-design headache is the fact that lots of furniture dealers use some variation of "Techline" in their web address, because that's the name of the manufacturer that supplies much of what Bromell and Nathan sell.)
And then there's that nagging question that comes up at every cocktail party: real estate. Do Tom and Gavin ditch their current digs--a rented brownstone in Manhattan and a warehouse they lease in New Jersey--and buy better spaces? "Mention to anybody that you're spending six figures a year on rent, and all you hear is how you're getting screwed," says Tom.
Nathan and Bromell decided they could use some outside help, so FSB enlisted a trio of consultants who agreed to meet with them. For help on web design, we turned to Daniel Scheman, 36, a soft-spoken founder of Media Farm, one of the first web-design firms in New York City, which has created sites for many small businesses and FORTUNE 500 corporations. For real estate strategies, Gordon Ogden arrived from the Midtown offices of Byrnam Wood, which negotiates leases for tenants around the world. Lastly, from Bethel, Conn., came Peter Otterstrom, 57, president of Human Energy Associates, a sales consulting firm. Otterstrom, a burly guy with a raspy voice like Martin Crane of Frasier, previously managed sales teams for big office-furniture companies including Herman Miller and Knoll.
Before he even glances at a computer, Scheman spends an hour grilling Nathan and Bromell about their business and what the website was supposed to accomplish. "How do customers find you?" Scheman asks. ("We wish we knew!" replies Nathan.) Scheman makes them describe the entire "life cycle" of a customer, from her first visit down to Techline engineers' making sure her elevator is big enough for delivery. "Do customers visit your website before they come here?" ("We don't ask," they reply.) "Is the site supposed to be advertising, or is it a reference document that shows what you can do?" Scheman asks. ("Um, both.") "Is it used to support customers through the buying and installation process?" ("No.") It emerges that a lot of Techline customers are former employees of giant corporations who never had to buy office furniture for themselves. "What are the 'pain points' for these customers, then?" says Scheman. What do they really need to know?
Eventually Scheman sits down and tries out the website. His diagnosis: It doesn't accommodate the mindset of a person coming to the site for the first time. Visitors are asked to identify themselves as seeking "residential solutions" or "business solutions." But Scheman cautions that visitors may actually see themselves as clueless about how to buy this kind of furniture and thus want the site's first menus to offer reassurance, like "I'm moving to a new office." The site also needs to educate customers on the steps they will go through, from an analysis of their needs and design to measurement, pricing, installation, and follow-up. "And on every page, there needs to be a call for action. You want to tell them, 'Call us. We'll help you get through this.'" Include pictures of Techline's friendly staff, he urges. Buy keywords and tags that will help Techline's hard-to-find site (techline-studio.com) pop up better in web searches. Add testimonials from satisfied clients and include their pictures to establish credibility.
Most important, says Scheman, "interview customers about their experience using the Techline website. It doesn't have to be extensive. Just three or four people from each type--home office, small corporate office, big institution. Understand how they see themselves, what their pain points are, what they wanted from the site."
Next to arrive is Gordon Ogden, the real estate consultant. He admits early on that he has a bias against a business owning its own office space: "No business can predict more than 24 months ahead whether it will shrink or grow. So why buy and lock yourself into a fixed amount of space?" But as Nathan and Bromell describe their current lodgings, Ogden's opinion changes. They're leasing the basement and two floors of a three-story brownstone. When business turned sour a few years back, they sublet the second floor to another tenant, but they could move back in if they wanted to. They rarely see the building owner, who lives in Florida, but the third floor is leased to an architect who serves as a building manager. Hmm, says Ogden. It might be smart to buy after all. They have room to expand and contract as needed, and that architect can run things. Suddenly Ogden is describing all the advantages Nathan and Bromell will have in negotiating to buy the brownstone.
"If you decide to move, you face the disruption of moving and the cost of fitting out a new space. But the pain is three times greater for the landlord," who faces innumerable trips from Florida to New York and has to refit the place--new floor, new wall coverings. Plus, it will take six to 12 months to find a new tenant. The tenant will get six months' free rent for signing a ten-year lease. And fees to a leasing agent will equal four months' rent. "In all, the landlord will lose the equivalent of 22 years of rent if you leave. If you persuade him that the other tenants will leave with you, the threat is even worse." Bromell and Nathan roll their eyes and smile.
When Peter Otterstrom arrives a few hours after Ogden leaves, he performs a far more meandering exploration of Techline Studio's operations than the previous two consultants. Then he gets specific, particularly about how the firm's 13 employees are organized and how they interact. How are salespeople compensated? Who leads the installers? What does the engineering department do?
Gradually the questions turn into suggestions. Hiring a layer of middle managers is impractical for a small business. But if sales pick up, Otterstrom wonders, would they consider elevating a salesperson into a mentor to other employees? Someone who understands the issues facing all the departments and can help them enhance their skills? Maybe, say the partners. But how do they pick someone? "Pick the person who wants to go down that path. Start looking now. And train him before things heat up," Otterstrom says.
Otterstrom asks about Techline's weekly staff meeting. The partners explain they use it to update employees on what's happening and smooth the handoff of projects from one department to another. Otterstrom suspects a lot of it is wasted time. "You can do half of that with e-mail," he snorts. The meeting should be a form of education, not coordination, where employees discuss problems they solved and exactly how they did it. "It should have a tactical emphasis," he urges. "If a salesperson overcame a customer's objection, have her explain in detail how she did it so that someone else can now solve that problem."
A more specific approach to selling is needed too, he says. "The salespeople aren't selling shelves and drawers. They're selling what a customer can accomplish in a really well-designed space. That a custom-fit space creates a place for that scanner, so you don't have to go downstairs to scan something." Point out to customers that buying cheap furniture piecemeal at an office-supply store or accepting a low bid is risky and may not meet their needs.
After Otterstrom leaves, Bromell and Nathan mull their makeover. Scheman "drew us a picture of the Internet that's an ongoing dialogue between us and the customer," says Bromell. "Not just us mouthing off. And that the site should be what the customer wants to see, not what we think."
The partners agree that real estate decisions are a few years off. Nathan liked Otterstrom's suggestions on team leadership and people development and on "tactically driven" weekly staff meetings. Mostly, though, he liked the way Otterstrom dissected problems "in nonfurniture terms. Like selling solutions, not furniture, or telling the customer that we can eliminate the risk in creating a workspace. The danger of the low bid. I'm grateful for that."
E-mail FSB at email@example.com.