By cleverly tapping into an underserved market, 800-CEO-READ will soon increase its revenues to more than $5 million, more than double the sales of just two years ago.
That’s impressive growth for a company that has only 10 employees, including one who is just about to return from maternity leave.
800-CEO-READ is a division of Milwaukee-based Harry W. Schwartz Bookshops, but it operates as an independent company.
In January 1995, the company changed its name from Schwartz Business Books to 800-CEO-READ.
Jack Covert, president and founder of 800-CEO-READ, was hired 21 years ago by David Schwartz, who owned Harry W. Schwartz bookstores before he passed away last year. Covert was hired to run Schwartz Business Books, which sold business, medical, computer and textbooks.
The original focus of Schwartz Business Books was supplying universities and local companies with books. In the 1980s, the company started an 800 number for cataloging, which opened it up to the national market.
As the popularity of business books soared in the 1990s, the company moved into the niche market it now serves.
Beginning in the early 1990s, the company gradually transitioned away from the traditional retail business, eventually becoming entirely call center-based.
In 1997, the same year that the company moved to the third floor space it occupies at 219 N. Milwaukee St. in Milwaukee’s Historic Third Ward, the firm launched its Web site (www.800ceoread.com), which is now the largest source of the company’s growth and where most of its book orders originate.
"We started as a call center, and we continue to be one," Covert said. "But we added the technology to support it. Amazon is the Wal-Mart to books. They do it cheap and do it well. We are the Nordstrom’s. We sell the same stuff, but we are customer-focused and driven."
800-CEO-READ has built its business by specializing in business relationships and author relationships.
The business relationships have been built by developing what the company calls knowledge collaborations with companies. The custom-built Web sites are developed for specific customers and can only be linked through those customers’ intranets.
The sites enable workers in those companies to order business books and resources from 800-CEO-READ as they are needed. Employers benefit because they receive a bill from one book seller, so it is easier to keep track of book expenses than if they constantly were paying several different bills from different book sellers.
"We’re the internal bookstore for several Fortune 500 companies," said Todd Sattersten, who specializes in author services and handles many technology-based functions for 800-CEO-READ. "Their sites come off of their corporate intranet and are passworded."
Covert said 800-CEO-READ has built custom Web pages for 25 companies.
The company also has developed relationships with several universities. Many of those relationships start with an author who may need 20 to 30 copies of a book he or she has written for a speaking engagement or class. The author then commissions 800-CEO-READ to get the books to the right place at the right time.
Covert said 800-CEO-READ orders directly from publishers, who then ship them directly to the company’s customers. The Milwaukee company seldom needs to store or process the books.
Covert and Sattersten call the process "drop shipping." The process enables 800-CEO-READ to run much leaner than most book sellers.
"We’re able to run our business on this low-inventory basis," Covert said. "And this gives us scalability. We can grow the business exponentially without a huge amount of cash. It’s an almost instant transaction."
Sattersten said Covert isn’t afraid to try new ideas to reach customers. Some of those have included the three different Web logs (blogs) created within the company’s Web site.
The first blog, started last April, posts reviews of business books, articles about the industry and other features for people interested in business books.
"Over the first six months, our Web traffic had increased five-fold," he said. "It’s been amazing. Business books aren’t covered the way they used to be in the mainstream media, and we were able to pool together a community of business book enthusiasts."
A second blog was launched last September and features only excerpts from featured business books. Excerpts are posted on a daily basis, enabling interested readers to sample different books, Covert said.
The third blog, containing only audio content, was launched in February. Covert said it features excerpts from audio books and exclusive interviews with authors.
"I think Jack would consider this a gutsy move – to spend time and money on something that you couldn’t say would give you more customers," Sattersten said. "But by almost every measure, it has made a difference."
The blogs, Covert said, have served to differentiate 800-CEO-READ’s brand, setting it apart as not only a place to purchase books from, but also as an expert in the field. And those efforts are paying off.
"Jack is frequently quoted in the mainstream press – he was just featured in Financial Times," Sattersten said. "People are frequently coming to us, asking what is going on in the industry. And we want to go forward to improve that."
Covert said he hired Sattersten a few months ago to work with the company on its future Web site development, especially to develop its blogs.
A new version of the Web site will soon be rolled out, Covert said, which will better incorporate the blogs and other features, giving easy access to information about the content of books, their placement on bestseller lists and information about authors.
Both Covert and Sattersten said teamwork is essential for 800-CEO-READ because of its focus on customer service with such a lean staff. Several months ago, an order was not shipped properly to a customer who needed about 500 books for a presentation, and only 150 of those books got there. The employees responded quickly to solve the problem.
"They’re all out there in the bullpen, and they can all talk to one another," Sattersten said. "What happened – in terms of dedication – is that everyone got on the phone and got those books on the way. They were overnighted from New York to Phoenix. And in terms of teamwork, there’s no ‘I.’ Everyone jumps into it and gets the best solution."
"Everybody has power," Covert said. "Everyone just does (what needs to be done). When there’s a problem, they just get on the phone and get it done."
The company has come up with two ways to recognize employees for their efforts, Covert said. One, which was developed with David Schwartz, provides financial incentives for employees when the company meets its revenue projections.
Another program rewards employees on a quarterly basis, bringing a masseuse into the office when the company meets quarterly goals, to give employees 45-minute massages.
Covert said recognizing the efforts of employees is crucial at this point for 800-CEO-READ, because of the company’s emerging status in the business book world.
"In a declining pool, we’ve gotten larger," he said. "In an industry where flat is success, doubling your business in two years is unprecedented."
800-CEO-READ
Address: 219 N. Milwaukee St., Milwaukee
Web site: www.800ceoread.com Industry: Business book seller
Revenue: $5 million for 2004 Employees: 10
Guts:
• Creating one-of-a-kind business model – The company developed "drop shipping," eliminating the need to maintain costly inventory. Through strong relationships with publishers, 800-CEO-READ orders directly from publishers, who ship the orders to customers.
• Building a brand – By developing an identity as experts in the business book world, the company and president Jack Covert are routinely sought out for comments in the national media. Its best-selling books also are regularly listed in national publications such as The Wall Street Journal.
• Empowering employees – All 10 employees of the company know the essential functions of the business and are able to assist any customers who have a problem with shipping or ordering. The company also provides financial incentives for employees to help the firm reach its sales goals.
May 27, 2005, Small Business Times, Milwaukee, WI
