When CEO Peter Clarkson founded AC Lens in 1996, he ran it from the back of an optometrist’s office.
The Columbus-based online contact lens supply company had no overhead, no backing from venture capitalists and no expectations.
While other late ’90s Internet companies worked hard to raise capital, Clarkson chose to grow AC Lens organically through its own cash flow.
“We’ve been profitable in every year of our existence,” he says. “We started with one employee, and we’ll probably be over 30 employees by the end of the year.”
AC Lens has grown revenue about 116 percent since 2004, and Clarkson expects 2007 revenue to hit $20 million.
Smart Business spoke with Clarkson about how he retains customers through service and employees through incentives.
Q: How can other CEOs grow their companies the way you’ve grown yours?
We learned early on that the Internet is a business like any other. We wanted to grow, and we were willing to invest part of our profits in marketing and infrastructure to support our growth.
We started with a view that the company should be incremental income to the optometrist’s practice, and then it outgrew the practice, so we had to move out. Now, we have about 19,000 square feet of integrated call center/warehouse that supports that.
I’ve always been able to sleep at night because I’ve never been worried that we wouldn’t have the cash to pay our employees at the end of the week.
Q: How important is customer service to succeeding in business?
We actually spend a little bit more acquiring each customer than we make from their first order, but we know from experience and from focusing on customer service that we have a very high retention rate.
It’s particularly important in the Internet because customers could not be more mobile. It’s something of a cliché, but your competition is literally a click away.
We recognized that our product is somewhat specialized, and we needed experts who are trained in-house and experienced in dealing with that particular product to give good service to the customers. Our average call center and contact center agent has been with us more than two years, and that’s much higher than industry averages. That kind of experience has been invaluable.
Q: How do you retain employees?
We’ve worked hard to incentivize our staff based on things that matter to the company overall, not so much on sales. For example, every customer who orders from us receives an e-mail survey about two weeks after they order. We ask them questions about how happy they are with the purchase.
The key question is, ‘Will you purchase from us again?’ A response of ‘No. 1’ means definitely not, and ‘No. 5’ means absolutely yes. We average all of the responses, and all of our customer service people get a bonus based on that average. The higher the number, the happier the customer is and the more bonuses the customer service people get.
We call it a team incentive. Everybody gets it, or everybody doesn’t. We started it in 2001. Prior to that, we had very few employees, and it was very hands-on. As we’ve gotten bigger, we’ve had to try to become more objective in our measures.
You have to incentivize your employees throughout the building based on how the company does, and it has to be relevant to their job. Every person has to have a stake, from the CEO to everyone else on down.
Q: How do you manage customer complaints?
For every 20 people who are unhappy, you only hear from one of them. You should take every customer complaint as a blessing because the customer’s actually telling you about it. At some level, we’re almost happy when we hear about some problem because at least it’s something we can work on and fix.
Bottom line is, everybody makes mistakes. Obviously, if the mistake is repeated, that’s bad. Sometimes when someone’s made a mistake, we realize that the process in our technology was wrong.
Of course, sometimes it was just bad luck. If the post office or FedEx loses a package, there’s nothing much we can do about it, but if they lose enough of them, we would start looking at another shipping company.
Q: What one thing can prevent a company from growing?
If you don’t take care of your customers, they’ll walk. There’s plenty of competition; it’s one of the great things about our system. If you don’t take care of your customers, it doesn’t matter how much money and energy you spend on marketing to get new ones, you won’t succeed.
The No. 1 piece of advice for anybody is, love what you’re doing, get real pleasure out of it, and then it won’t be like work. You’ll be providing jobs for people and building something worthwhile for the community.
HOW TO REACH: AC Lens, www.aclens.com or (614) 921-9892