NT: Please tell us about your company and your type of business.

DK: We are a manufacturer that provides custom furniture solutions for call centers. We provide a turnkey service that begins with initial furniture design and space planning, and extends through the manufacturing and installation of the furniture. Our furniture solutions also include a wide range of ergonomic accessories and components. While we are a manufacturer, our philosophy is not to be just a manufacturer—our goal is to truly become a partner with the companies that we're serving. In support of this philosophy, one way we're quite different from the traditional furniture companies is that we develop direct relationships with our call center customers as opposed to selling through a furniture dealer or independent distributor. This really facilitates the partnership, and our customer ends up working with the same Interior Concepts people regardless of where they locate the call center. We very much understand the call center business and certainly know how to take care of our customers.

NT: I think that's very unique. I'm not aware of any other companies that do that.

DK: Most commercial contract furniture is sold through dealers or independent distributors. When we initially targeted this [call center] business, we discovered several things. One is that is was difficult to find furniture dealers who really understood the call center business. Also, by the very nature of the call center business, if a customer is a private telemarketer, where they're located corporately doesn't matter, because this month, they're going to be placing a center on the East Coast, three months later it may be a new center in the Midwest, and three months after that it may be on the West Coast. Our direct relationship gets us closer to the customer. We understand them, and the benefit to our customer is that they work with the same Interior Concepts people regardless of where they're placing their centers. It makes for a very good partnership.

NT: I have always wondered how technology companies can get the type of business they deserve from these distributors. It seems to me the distributors, who might carry 150 products in the same field, are naturally going to try to sell the one that makes them the most profit. The other companies get left behind.

DK: You are exactly on target with that. From a logical business standpoint, they will sell either the product that makes them the most profit, or the one that's easiest to sell. The most profitable product and the easiest to sell product maybe not be one and the same.

NT: Frankly, I would never want to put my business into the hands of the distributors.

DK: It truly depends on the market being served and the business model being used. With our call center business we provide custom furniture solutions with very short lead times and take pride in the level of service that we offer to our customers; from our vantage point having a “person in the middle” can actually detract from our goals. Of course, you may not find many distributors who agree with this assessment.

NT: That's true! For the next question, what are the greatest challenges your company faces?

DK: Our greatest challenge is to continuously do more with less. The furniture business is extremely competitive, which is very good for the customer. But while we're having to keep our selling prices competitive, we, in turn, have been hit extremely hard with material price increases from our own vendors. Not only by material price increases, but such things as metal and fuel surcharges. We've seen more vendor price increases in the past year than probably the previous five to six years combined. As a manufacturer, we get sandwiched in the middle. So the challenge is to continuously find better ways to produce. Also, on the selling side, the competitive pressures are compounded by foreign imports. We address this by specializing, or practicing niche marketing. "While a customer can easily purchase standard furniture items from China; they can’t purchase a customized call center floor within a very short lead time."While a customer can easily purchase standard furniture items from China; they can’t purchase a customized call center floor within a very short lead time. On the cost side, things like healthcare costs continue to go up, up and away, and all of this creates the common need to find ways to do more with less.

NT: That's a very good point, and it makes a lot of sense. So…what have you determined to be the solution to these problems?

DK: It's interesting. The challenge and the solution are one and the same. By that, I mean the challenge is to do more with less; the solution is to do more with less. As a manufacturer, we have to continuously increase production from the front door to the back door without commensurate increases in overhead or operating costs. On the manufacturing floor, for example, you can invest in new and better equipment, but that isn’t enough. From a total business standpoint, we are responding to the challenge through "information technology." For a custom manufacturing company, we have an absolutely extraordinary CRM system in place. At the click of a mouse, I can tell you everything about any order: in-house, past and present. From my laptop, I can pull up CAD drawings and any and all communications, including e-mails and voice mails, for any given order for the entire duration of that order, all the way from the initial quotation phase to the installation, even down to installation photos. As part of the normal installation procedure, the installer will take photographs, and those go into our computer system as well. Every quotation we do is electronically entered into the system. If a customer should call me on the phone, for example, and want to discuss an order, I can immediately pull it up. More importantly, from an overall business standpoint, through our CRM system I can maintain a very good business awareness, particularly in terms of which customers are doing what. So it puts a lot of information at our fingertips. Also, with the information technology, we're using the Internet more and more in terms of presenting and selling our products. We're really addressing the business challenge through our CRM process.

NT: That's impressive. Did you develop the software yourself, or did you buy it off the shelf?

DK: We purchased software, and then customized it for our business. We're using an ERP (enterprise resource planning) solution called SyteLine. The CRM system we use, Frontstep, ties to that [ERP software] in a unique way. The Frontstep CRM software integrates with our manufacturing system. It's difficult for many manufacturing companies to implement CRM, even if they produce a standard or commodity product, yet we've been very successful in applying CRM to a custom manufactured product. What we're doing is quite unique. Every quotation that goes into our system follows a pipeline, and a mathematical formula assigns a certain probability of a quote closing, or become an order, based on where that quote is within the pipeline. For example, if a quote goes to revision B, we know the probability of closing it goes up, otherwise the customer wouldn't be interested in making any modifications to the quote. The probability continues to increase if the revision level goes to "C" or "D". Another benefit of the system is a very good forecasting tool. We can easily see what's sitting out there in the way of pending business. Based on the probability assessments, our system will tell us what we're likely to see in closed business based on our historical capture rates. With the quotation/order information close at hand and the entire history of every order being captured, we can and do provide exemplary customer service.

A customer buying our furniture for his or her call center only wants to know, "Are we going to have our furniture on time?" The customers, and rightly so, couldn't care less whether we're automated or whether we operate out of caves. The automation and the CRM is a means of differentiating yourself and providing that customer with the very best service. That's what you have to do to survive.

The access to information is extremely critical. So we're very pleased with the progress we're making.

NT: For good reason. What are some of the more recent developments in your company?

DK: Again, the most significant development is how we're using information technology, and particularly how we're integrating the CRM system into our manufacturing system. This really gives us some strategic advantages. With the possible exception of some very limited QuickShip programs that other companies have, we offer the fastest lead times or turnaround times in the industry. Even for large call centers, we operate year-round with a four week or less lead time. CRM will only improve that. We'll get to the point that, electronically, once we receive a purchase order, we'll be able to generate the paperwork and release that order for production literally the same day. That process could shave an additional week or more from the lead time. We already offer the shortest, on average, lead time in the industry, and through CRM, it will only get better.

NT: Could you share with us your vision of the future trends for the contact center industry?

DK: We are very much a "niche marketer," and we plan to remain that way. In addition to our call center business we specialize in educational environments, but we have no desire to go out and compete for what we call the "traditional contract furniture" business. Our vision is to continue to make the buying process easier for our customers, and a part of this is to make the buying process more interactive, including the ability to fully generate a custom-designed floor plan and pricing online. The key to this is "custom." Obviously, this capability already exists with some furniture products, but typically those are standard products. Our overall vision is to continue to help our customers, make it easy to buy, and make it very advantageous for them to locate their call centers in this country.

Our customer base includes some of the largest telemarketing companies in the industry with 10-, 15- and 20-year relationships being very common. While our customer retention rate is extremely high, our goal is to give these companies even more reasons to buy from Interior Concepts.

NT: What would you say is your company's core competency?

DK: It's really understanding our customers' needs and providing solutions that meet those needs. It just so happens that our product is furniture for call centers. Our custom focus would allow us to be successful if the product were something other than furniture for call centers. We think that's the driving force. Also, in meeting our customers' needs, as an organization, we don’t “manage backwards” from the financial numbers. The numbers are important, but we think that by taking care of our customers, the numbers will take care of themselves. Traditionally, that has always proven to be the case. We're very informal as an organization — very non-bureaucratic. Sometimes, we do things financially that probably wouldn't make sense to most companies, but do make sense to us. In our minds, if it takes extra money to meet the needs of our customer, then we do it. As far as our return on investment, if that keeps the customer coming back, then that's what we're all about. Again, our customer retention rate is extremely high. Once we develop a relationship with a customer, we typically don't lose that customer, and we like to keep it that way.

NT: What is Interior Concepts' positioning statement?

DK: Before commenting on that, I'd like to say that we have and use a marketing tagline that is, "Solutions That Fit." The way that we position ourselves is with our custom design and manufacturing approach, so we can absolutely offer our customers the very best utilization of their floor space. I can say with one thousand percent certainty that no other furniture company can do it like we do it. Our utilization of space translates into either additional dollars earned or dollars saved for our customers. This is really how we position ourselves.

NT: How do you differentiate your company from your competitors?

DK: The way that we're different is that unlike most contract furniture systems, we use a one-inch panel system. This allows us, along with our custom manufacturing approach, to do a lot more with the space. This gets back into the "solutions that fit" tagline that we use. Because of the one-inch system, we can typically provide to the customer either more work stations in the space, which obviously translates into more revenue, or we can give them larger workstations and/or more aisle space and common areas. Either way, our one-inch system combined with our custom approach ends up being a significant benefit in either more stations or better use of the space. For example, we were just successful in obtaining a very large call center in Oklahoma consisting of over 600 stations. The difference between our quote and our competitors' quote is that we were able to fit in an additional 30 to 40 stations. That's typically what we see in these larger centers. This gets back to offering the very best solutions for the floor space. Additionally, we provide the largest and easiest to use cable management capacity in the industry; this also translates into significant cost savings for our customers.

I don't think anyone else out there does call centers like we do them.

NT: Thank you very much for your valuable time.