CONVERSATIONS WITH A CEO: Office-furniture demand an economic gauge

By North County Times | Sunday, September 7, 2008 12:17 AM PDT ∞

First in a series of interviews with North County chief executives.

Perhaps no business more closely reflects the economy than that of office furniture. Plenty of buyers when the economy is expanding and businesses are forming, growing or getting new office fittings.

So this would seem to be a down time for Cubicle Office Environments in Vista, which makes and sells several lines of office furniture.

Or is it?

North County Times business editor Jeff Rowe spoke with founder and chief executive Mark Canavarro about dealing with a tough economy, providing great customer service and the greening of North County offices.

When did you start this company?

Seven years ago. I was working with another office furniture company and thought I could do a better job. So I started this company. We'll do about $4.4 million in sales this year, up from $3.2 million the prior year and we have nine employees.

What's the typical cost to outfit an office?

$2,000 to $3,000 is the going rate, but we have a warehouse full of clean, used office furniture. For $500 to $700, we can fit customers with a desk, chair, cabinets and drawers. Companies are still setting up, but they have less money to spend.

How do you cope with economic slumps?

We don't cut back on marketing and promotions in rough times and we're constantly looking for new markets. We are spending more this year on marketing and promotions ---- when the economy improves, we will be top of mind ---- and in touch with all the right people.

How are you capitalizing on the green revolution?

We have several green products that can help companies meet LEED standards (used to certify green buildings). Our manufacturing plant in Rancho Cucamonga uses about 25 percent recycled materials, we use low-emission glues ---- that combination can help our customers earn LEED certification.

What's your strategy for marketing and promotion ---- reaching those new customers?

We do search engine optimization so that, for example, when our competitors' names come up in a search, our ad also appears. Our spending on such ads rose from $15,000 (last year) to $100,000 this year.

We also do direct mail and then we track the telephone responses so I can figure out that for X number of direct mail pieces, we got Y number of inquiries. I can tell exactly what our return on investment is.

What's your strategy on customer service?

We have about 60 customers a month ---- some may need just a file cabinet. But we treat every client like a Fortune 500 company. You never know who that person will turn out to be, who they might tell about the good service we gave.

People will remember us for our extra efforts ---- that we sent someone 20 miles to fix a desk. We will do whatever it takes to make the customer happy.

How do you measure the success of your customer service efforts?

We survey every customer with just two questions: On a 1-10 scale, how happy were you with out products, and would you refer us?

We don’t send an invoice until we know the customer is satisfied

Most people will not complain ---- they simply will not go that store again. We want to know.

What does the future look like for the company?

Biotechnology remains strong and the military still needs office furniture. And the big new county operations center is another opportunity. The movement toward green is big.

Advice for other companies in a tough economy?

We're pushing brand awareness every day. The key in business is how you resolve your mistakes. We're constantly looking at new ideas and new technologies to see how we can fit in. People do want to spend less money now and we are slower in sales than last year, but the companies that will fail are the ones sitting by the phone. You have to have the attitude, "We're going to find new business."