Designing Woman
A family-owned architecture firm aims to supercharge online sales.
By Brian O'Reilly

(FORTUNE Small Business) – Angela Santerini thinks that her family architecture business can become the Dell Computer of the design world—a lean, mean, direct-marketing machine. Her vision: to leverage modern media technology to sell her firm's house plans all over the country.

Santerini, 36, is president of Donald A. Gardner Architects, a South Carolina firm with 55 employees and annual revenues between $5 million and $10 million. Gardner licenses off-the-shelf house plans to developers and private clients who don't want to pay tens of thousands of dollars for bespoke design work.

About half the company's sales come through its website, and the balance through traditional catalogs. But Gardner is also moving into the book and magazine business. This year Santerini plans to launch several new home-design publications that she hopes will generate sales leads along with subscription and advertising revenue.

Last spring Gardner's innovative e-commerce strategy garnered a small-business innovation award that was sponsored in part by Dell. The prize included a free coaching session with no less than Michael Dell himself on the finer points of Internet marketing. FSB tagged along for that meeting, at Dell headquarters outside Austin. And when we offered to help Santerini kick around some other business issues with outside experts, she said it sounded like a fine idea.

Santerini felt that her service reps could use some advice on how to deal with difficult customers. So we brought in Donna Butler, a customer-service expert who once trained staff at AT&T's mammoth call centers and now runs a consulting company near St. Augustine, Fla. And while she's excited about her magazine venture, Santerini has only a limited background in the publishing industry. For that we solicited the expert advice of Greg Zorthian, a former Time Inc. (FSB's publisher) executive who is now a partner at Magellan Media Partners, a media industry consulting firm in South Orange, N.J.

Day one of Gardner's makeover is at the company's comfortable headquarters in Greenville. Butler, the call-center expert, settles into a leather chair beside a mahogany table in the conference room. Santerini is joined by Lex Stapleton, the firm's chief architect, and Jennifer Hall, head of marketing and customer service.

Like customer-service reps everywhere, Hall's five workers lead stressful, tedious lives. They field around 20,000 calls a year. And while many calls are routine, disputes often arise over Gardner's efforts to protect intellectual property. Professional builders, in particular, frequently try to violate their licensing agreements with Gardner by reusing plans without paying additional fees. So Gardner imposes strict limits on which plans the company will replace free. The rules also apply to customers who lose their plans or simply want extra copies. The ones who don't understand the rules are often irate when they call for help.

"So customers are dissatisfied with the policy," Butler says sympathetically. That's hard on the service reps, who usually want to be helpful and get frustrated when policy ties their hands.

Butler outlines a technique to soothe the savage customer. It's called LAER, which stands for "listen, acknowledge, explore, resolve." When dealing with angry callers, it's a mistake to propose solutions too soon. "Listen to them," she says. "Acknowledge that you understand why they're upset. You're not undermining the company when you do that. There's a point when the customer runs out of steam. Their evil twin steps aside, and they're ready to solve the problem."

Other callers, especially builders, have highly technical questions, such as whether a particular wall can be moved. Those calls must be answered by trained architects, who are usually busy designing new houses and hate to be interrupted. "Once they're on the phone, they're fine," Stapleton says. "But breaking that train of thought is tough."

The problem is a common one, according to Butler. "You have to remind your designers that customer service is important to sales," she says. Butler suggests that service reps and designers participate in each other's annual evaluations. That way each side will appreciate what the other side does, and workers who are good at helping customers will be recognized and rewarded for their contributions.

But Santerini isn't content to please only her existing customers. She wants to reach a whole universe of new house builders, and that's why publishing consultant Greg Zorthian, 51, just flew in from New York. Zorthian, a Harvard MBA, is wearing a perfectly pressed jacket and starched blue shirt. He listens carefully as Santerini and Nick Foley, recently hired to run Gardner's burgeoning book and magazine operations, explain their magazine-publishing strategy. Gardner already publishes Designs, a magazine-style compendium of house plans that it mails out several times a year to 140,000 homebuilders. Last year the company launched two new magazines and published a book of house designs. This year Santerini and Foley plan to release a glossy color catalog, a design volume titled All Things Southern, and a new magazine called At Home With Donald A. Gardner.

Zorthian is worried about that last title. Don Gardner is Angela's father and the company's CEO. He founded the firm and remains visible in the home-design industry. (The company is very much a family affair: CFO Bill Santerini is Angela's husband, and her mother, Sheila, is vice president.) But Zorthian invokes the specters of Martha Stewart and Rosie O'Donnell to warn Santerini and her colleagues about the risk of building a magazine around a single individual. Keep the name, he says, but broadcast on each cover that the magazine will deliver "Gardner brand" house plans.

More broadly, Zorthian isn't sure he understands why an architecture firm would want to publish magazines. "Is it a marketing tool, or are you going into the publishing business?" Zorthian asks. Both, he is told. "Magazines find customers for us," says Foley. "People find them when they're buying milk or at Home Depot or in a bookstore. They create awareness that you can get your house designed for $600 or $700 instead of paying $10,000 to an architect." But Gardner also wants to make money the way conventional publishers do, by selling subscriptions and advertising space.

Zorthian frowns. Gardner magazines are full of articles about the company's designs and those of other firms. That formula doesn't fit into any of the conventional magazine categories, so it may be tough to lure advertisers, Zorthian says, because ad agencies aren't likely to track Gardner's publications. Better to approach houseware companies such as Koehler and Home Depot, whose marketing directors will pay attention once they realize that Gardner reaches an audience of readers looking to spend north of half a million dollars on their homes. Santerini and Foley should send several personal letters to each marketing director (no spam e-mails allowed!) and follow up with direct-sales calls.

The publishing business should have separate profit and loss accounting, but Gardner shouldn't drop the venture if ad revenues are low. "If the books and magazines help you sell plans, they're valuable," Zorthian concludes. "Consider booking some of that revenue to the publishing side. You'll get a clearer picture."

We cut to dell corporate headquarters in Round Rock, Texas. Santerini and a half-dozen Gardner executives sit in a stark conference room, nervously awaiting Michael Dell. He arrives flashing a pleasant smile, his dark pinstriped suit accented by a black nylon backpack slung over one shoulder.

Dell explains that he chose Gardner for the award because of the imaginative way the company uses the Internet to sell plans and service customers. (Gardner's website features intuitive navigational aids and gathers extensive customer feedback.) That said, Dell delivers a mini-lecture on how to use online encounters with customers to maximum effect. The key is to experiment with many different marketing pitches and track them all carefully to see which result in the most sales. "The ability to make offers on the website and test to see which are the most effective is amazing," he says. Even changing the order in which various items are offered on a single web page can make a big difference in sales, he explains.

One Gardner executive asks whether competitors have ever tried to rip off Dell's ideas. "We were very worried about that back in 1992, when we stopped selling computers through retail stores and started selling direct to customers over the phone," Dell replies. "Other companies tried that, but they didn't really understand what we were doing. They only copied one piece of our model. We sold products made to order and changed their design so they could be custom-built more easily. We captured information from our customers while we were on the phone with them, and brought that back to the organization. And our competitors continued selling through retail, which was confusing and caused conflicts with distributors."

Asked how he forecasts sales trends in the computer market, Dell replies that a company like Gardner shouldn't worry about its entire industry. "I'd question the percent of share you have of all the homes built in the country," he says. "It's very small. If the market is a million and you have a thousand, it doesn't matter whether the market goes up or down next year. You have enormous upside, so think of how to attract new users in bad times as well as good."

In conclusion, Dell tips his hat to Gardner and its peers. "Small business is big business for us," he says. "In the past larger companies had advantages because they could lock out smaller ones. That way is disintegrating. Companies now are part of a big ecosystem that works together." With handshakes all around, the billionaire entrepreneur hoists his backpack and hikes out to a waiting car.

When it was all over, what advice resonated most with Santerini? Zorthian helped retool her strategy for luring advertisers. After the session with Donna Butler, she reminded all her employees to drop routine chores when a customer had a problem. And Michael Dell inspired her to experiment more online and track the results of each new sales pitch.

Donald A. Gardner Architects is poised between its past as an architecture firm and its future as an integrated design and media company. Will that future be profitable? Stay tuned: We'll keep in touch with Angela Santerini and report back on her progress from time to time.