Industrial House Builds on Its E-Success with Help from BGC

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CHALLENGE:
A decade ago, when the “New Economy” was all the rage, dot-com entrepreneurs were scratching out business plans on bar napkins and becoming instant millionaires. Now that all that wealth has proved to be as flimsy as the napkins (not to mention those paper-thin “plans”), where can a dot-com survivor go to get some respect? Along with the few mega-stars—Google, Amazon, eBay—that emerged from the ecommerce shakeup are myriad smaller success stories chugging along on the strength of their creativity and customer service. Industrial House (www.industrialhouse.com), which specializes in industrial-style décor for homes and businesses, is one such story. And it’s right here in Cleveland.

SITUATION:
As the founder of Industrial House, Jeff Mercer is the first to admit that his company does not, at first blush, seem like a natural fit for Cleveland. “Most of our customers are on the east and west coasts,” he said, “where this style is already popular. We don’t get a lot of local business yet, but that’s something we want to change.” The fish-out-of-water nature of the company was a main reason it got started. In the mid-1990’s, when Mercer and his wife were redecorating their house, they chose the clean, modern lines of industrial styling simply because they liked it. Only after shopping around did Mercer realize that despite their beauty and quality, these products weren’t easy to purchase. “I got the idea for a catalog company,” he recalled, “where I could put together the things that I liked, which I got from many different places, and offer them to people like me who needed a more efficient way to find and buy them.” Mercer, at that time a stay-at-home-dad, made some phone calls and sought out relationships with several different manufacturers. Working from the basement of his (impeccably decorated) home, Mercer drew on his experience as a computer programmer to create a Web site, and Industrial House was born.

For three years, Mercer simply followed his instincts, working with suppliers and featuring products he loved through his electronic catalog in a process he called part-time, full-time. “Since I was at home, I had a lot of flexibility,” he noted with a laugh, “but as a parent I had more flexibility than time.” The response to Industrial House was enthusiastic, and by 2000 Mercer had to hire three employees. With continued growth, Industrial House has moved out of the basement and into a new fulfillment center in downtown Cleveland and, in 2005, it had record sales. The company, which now has seven employees, has an impressive list of clients, ranging from powerhouses like Apple Computer and Pfizer Drugs to individual homeowners. Mercer’s love for modern design prevents him from discriminating among customers. “We might sell 100 toilet brushes to a hotel,” he said, “or one butcher block to a homeowner in California. About half of our business is B2B,” he noted, “and the other half is direct to consumer.”

Still, by 2005 growth had slowed. Mercer knew his company could sell and service customers who loved industrial design, but he wasn’t finding and growing enough of those customers. He also wanted to start working with local designers to create new product lines, but he wasn’t sure it was the right time. What does a dot-com veteran do to grow to the next level? Jeff Mercer hired Birol Growth Consulting.

THE BGC SOLUTION:
“What we needed was some straight talk,” Mercer said of his initial meeting with Andy Birol. “We were missing a lot of marketing opportunities. Andy quickly analyzed what to do in the moment, for our particular case, and gave concrete suggestions … [He] got to the heart of what we needed to do.”

Andy’s first step was to call a company-wide meeting, where Mercer and his employees were encouraged to discuss their goals for the business. The initial goal was an easy one to measure: Mercer wanted to double sales in the final quarter of 2005. To encourage employees and keep them focused on sales and marketing, Andy designed a bonus plan. He also laid out an action plan that emphasized the importance of marketing over new product development. “What the company needed to do was grow more and better customers by aggressively marketing the products they had,” Andy said. “A strong focus on current product lines was the best way to grow the business while establishing a receptive audience for new products to be developed down the road.” The new marketing focus stressed phone calls to top customers as well as email and direct marketing. “A lot of people respond positively to what Industrial House sells,” said Andy. “This is a terrific company with unique and striking products, so they just needed to get their product lines in front of more people.”

In addition, Andy encouraged Mercer to reorganize the company for greater efficiency. “He worked with me on setting expectations for different members of the organization, including the finance department, IT, and sales,” said Mercer. “We ended up reassigning some key tasks to play to the individual strengths of our people, and the results have been great.”

CLIENT RESULTS:
When asked about working with Andy, Jeff Mercer summed it up succinctly, saying, “I’m satisfied. I’ll be back for more.” As far as measurable results, not only did Industrial House topped its original sales goal for fourth quarter 2005 by 50%, but also the numbers keep climbing, and Mercer has hired extra shipping and handling employees to keep up. “We have all become much more marketing-oriented,” he said. “Andy worked with key employees and created an atmosphere of forward motion and achievement that is invigorating. We have a real sense of direction now, and we know how to reach our goals.”

Less tangible but equally important, said Mercer, is the renewed enthusiasm he feels toward the company. “One of the best things Andy did was to take some of the pressure off of me for awhile,” he recalled, “by cutting through my indecision and making some key decisions that were the right ones for the company.” The temporary reprieve has allowed Mercer to re-engage with Industrial House with a new sense of energy and purpose, and business is thriving. “Jeff’s a committed owner,” said Andy. “He’s tech-oriented by nature. He just needed to learn how to implement marketing to grow the company’s bottom line.”

And Andy is glad to have such a forward-thinking company sinking its roots into Northeast Ohio. “From the beginning I thought this was quite a company, quite an idea,” Andy said. “They are really doing something interesting here, and it’s something not a lot of people would expect to find near Lake Erie.”




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