COMM CON CONNECTORS
Making Connections - Putting the dot commerce in high gear
The Inside Line - Volume 14 Number 3 March 2001

"Early in our history we began doing business by promoting "Order it Your Way," says Bob Farnum, president of Comm Con Connectors, Inc. "It's based on the Burger King concept: How do you want it? After all, hamburgers are just like connectors on circuit boards - hold the pickles, hold the lettuce, special orders don't upset us." In 1982, Farnum started his business from his garage with only $8,000. The company grew using a conventional distributorship organization. In 1996, he decided to change course and completely dismantle and reinvent the company as an online business.

"Initially, like most companies we used distribution and sales representatives to market our products, all the typical infrastructure," says Farnum. "That's how business was done. Later, we hired five salespeople and opened a large sales office, typical within the industry. This dramatically increased our overhead. By 1996, we didn't seem to be getting our bang for the buck.

Through the use of extensive surveys, we determined only 12 percent of our business was received through distributors and representatives while 75 percent came from ads, trade shows, and other sales activities. In part, this was attributed to the fact that the connector components we manufacture are small and application-specific, making it a difficult sale for the sales staff. Since we manufacture everything and handle the value-added processing for others, I thought, why not do it for ourselves?"

		"Having to tell the VP of Sales, a long-time friend, that I was going to dismantle his entire organization was one of the
		most difficult tasks I had to face," says Farnum. "I wanted to eliminate everyone between us, as manufacturer, and the customer - no intermediaries"

Reinvention
About the same time, Farnum happened to read an article in Fortune magazine about the Dell computer company. "In the story, they quoted the Dell sales manager saying, "We just started our e-commerce effort on the Web, allowing people to order online and essentially design their own computer," says Farnum. "After two months, we were receiving over a million dollars a day over the Internet." Farnum was determined to figure out a way to work the Web for his own company's profit. For the next six months he prepared Comm Con to make the transition to becoming an online company, not with just catalog pages, but as a truly e-commerce business.

"Having to tell the VP of sales, a long time friend, that I was going to dismantle his entire organization was one of the most difficult tasks I had to face," says Farnum. "I wanted to eliminate everyone between us, as manufacturer, and the customer - no intermediaries. Besides, people are scrambling for every spare minute and don't have time to listen to a sales pitch of features and benefits. We're not selling any more, we're offering application-specific connector solutions to problems."

In 1997, Comm Con met with reps and distributors and outlined the company's plan to find a new future. The dreaded 30-day registered letter canceling contracts went out. Internally they agreed that if anyone called and complained, Comm Con would keep them on. Nobody called. This seemed to confirm that the reorganization was a good decision. All but one distributor was dropped.

Product and Process
Farnum said the Comm Con online catalog was designed to be simple and user-friendly. A potential customer can find what they want in no more than four clicks. Browsing is a quick and easy process with multiple ways to find product for design or purchase. Internal browsers provide pertinent user information without having to download PDF files. Pricing is displayed on site. Comm Con still has a paper catalog for the diehard customers who need to touch something, even if they end up online for the latest data. The Web site went live in January 1998 and is continually being upgraded.

Comm Con claims to be the first company to include a "configurator" on its site, which permits a client to custom design board-to-board interconnects. Farnum says the company is positioned to be a leader by manufacturing and marketing connectors direct to customers on the Internet. Considering Comm Con manufactures to order, this is no small accomplishment. How did they do it?

Comm Con's planning team determined that devising a system of databases where information about a product, a customer or a prospect could be easily searched and tapped would make a powerful business tool, This would also give them more control over the company's destiny. "We spent three years developing the system that makes us different." Says Farnum. "We are now processing as many as 400 small to large orders at any one time. We can tell where every order is almost on the hour. The process changed everything. It was like staring the company over from scratch, but it is now our strength. We are not brokers, and the world economy has allowed this to happen. Ultimately, as manufacturer, we have the product, the technical know-how, and the cost figures all in one place. E-mail has become our lifeline. From our perspective, distributors and representatives have become outdated."

Farnum espouses the concept of "mass customization," the process of buying a large quantity of a small number of materials that allows them to make tens of millions of connectors. Comm Co builds to order, not for inventory, Raw material is the company's only inventory.

In effect, the Web is the company's representative, working 24 hours a day, seven days a week. The average sales call amounts to 10 minutes of time spent at the Web site. The online catalog is considered a giant grocery store where people not only can find what they're looking for, but can find other associated products, like stand-offs, terminals blocks, spacers, nuts, and washers. At Comm Con, electronic communication is more than exchanging information; its conducting business - the new way of making sales calls. New business stimulated by the Web's speed and price visibility simply makes it easier for the buyer. Today, the company is adding 40 new customers a month.

"In 1997, we had two major customers who were 70 percent of our business," says Farnum. "Today, one company is 20 percent, the rest is a diversity of well-known OEM's - all because of the Web. We have solutions for almost every board-to-board connector application. The picture search on our site illustrates roughly 25 products, which cover millions of connectors. It's an intuitive site. Sales have tripled since we started tracking in April 1999. With 125 employees and 40,000 square feet of space, our overall business is up 100 percent over the last two years. While the Internet is partially responsible for our success, we have had to make customer service, fast delivery, quality, rapid-sample prototyping, order processing, and fulfillment all work together."

Looking Ahead
In these digital times, large and geographically dispersed corporations have to deal with infrastructures that can slow processes down. Comm Con's removal of all the barriers between manufacture and customer is unconventional ,but it may be a strategy that leads other to follow. From Comm Con's perspective, the big pay-off is yet to come. "And we're just beginning to see the extent to which we can use this cyberspace resource, " says Farnum. "In a $30 billion industry, a small company like ours had to find a niche to excel. Comm Con is a place online you come to do business in four clicks or less - hold the pickles, hold the lettuce, special orders don't upset us - Order it Your Way."

The Inside Line - Volume 14 Number 3 March 2001

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