Case study: Making all the right connections

After more than 25 years in the industry, Chris Anderson, founder and director of Osborne Park-based business Well Connected, is one of a small number of business owners operating in a niche of the office equipment market.

Selling his stake in Perth Office Systems to his partner in 2004, Mr Anderson saw an opportunity to develop his business idea designed to give customers the best of both sales and technical service.

“In the industry, you either deal with the dealers or manufacturers, which both have their strengths and weaknesses,” he told WA Business News.

Most dealers, he said, were focused on the customer service side, while alot of manufacturers were focused on machine servicing, and often kept costs down by stripping back service.

Well Connected is designed to give customers the best of both worlds – premium customer service combined with a high level of technical servicing.

In developing the business model, outsourcing emerged as the central element of the company’s growth strategy.

Using his contacts in the industry, Mr Anderson formed relationships with three major suppliers, outsourcing the supply and technical support to the suppliers, while he and his business partner, Michael Brain, maintained a focus on customer service.

“The outsourcing idea came out of necessity. In starting the business, we needed to use someone else’s technical workforce,” Mr Anderson said. “We service customers because we know we can do that very well. And you end up with the best of both worlds.”

He said supplier relationships not only provided staffing benefits, as they provided the technical expertise, but also made managing stock levels easier by channelling all sales through the supplier.

This meant the business did not need its own stock inventory, relying on the suppliers to fill sales orders as they arose.

“It’s a win-win situation; I’m selling machines for them they wouldn’t usually sell and they have the technical staff to service the machines,” Mr Anderson said.

While outsourcing allowed the business to start up quickly, one issue had arisen early on.

Mr Anderson said he realised that, without the business having its own technical personnel, it was relying on suppliers providing the right product information.

This was soon remedied, when current IT and service manager Ian Brown joined the team earlier this year.

“We came to the realisation that we needed our own technical resource,” Mr Anderson said. “Ian can liaise with manufacturers to ensure we’re not getting ‘technobabbled.’”

In 18 months, the business built up a customer base of more than 100 businesses in the Perth metropolitan area, with about 150 machines out in the field. It also achieved a turnover of $2 million in the past year.

Mr Anderson is confident the model could easily be scaled up with the addition of extra sales staff, and potentially be replicated elsewhere.

Administrative systems are in the  process of being fully automated, freeing up the administration manager to focus more on sales and service.

“The beauty of this is because we’ve streamlined the administration process, all we really need to do is grow as a sales organisation and find the right sales people,” Mr Anderson said. “What were doing makes sense, what were saying makes sense, and it’s working.”

The company is also preparing to roll out a new software package, which sends an alert to the sales team if there are any servicing requirements or part replacements needed.

The program is currently undergoing testing and is expected to be available to clients at the end of the month.