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The Best of the Small Business Web

You don't have to be a 'dot-com' to thrive on-line. Twenty smart companies show you how

By Leigh Buchanan

Five years ago the commercial Web was a hammer used by entrepreneurs and executives for a single purpose: to bang marketing messages into visitors' skulls. Today it more closely resembles a Swiss Army Knife: each company's site acts as a scissors, blade, or corkscrew to perform the distinct task required by its host. Some sites are direct-sales machines. Some manage complex and multifaceted customer relationships. Some serve as platforms for heretofore undreamed of services. And yes, some just look good and inspire warm feelings toward a product or a brand.

The point is that great Web sites do not have to be all things to all people. The following profiles -- all winners of Inc. Technology's first annual Best of the Small Business Web competition -- celebrate sites that succeed in one or more of the following five categories:

• Return on investment (ROI): Sites that contribute significantly to a company's bottom line
  
• Utility: Sites that perform extraordinary feats of service
  
• Innovation: Sites that offer novel services or reinvent their host companies' businesses
  
• Design: Sites that are visually appealing
  
• Local sites: Sites that serve customers in a circumscribed geographic area

We chose the 20 companies profiled here from a pool of some 400 entries, almost all of them submitted over Inc.'s Web site in June and July. We also considered a number of nominations from Inc. staffers. Entrants were required to be privately owned brick-and-mortar companies with $50 million or less in revenues. Since high-tech companies enjoy a number of advantages in such a competition, we discouraged those businesses from participating. The only technology company on our list is being honored for its employee Web site.

We hope that all of you will find at least one company here with which to identify: someone with a similar business, a comparable problem, the same lack of resources, a shared dream. Even if you don't find a model, you may find the motivation to get to work on your own site. Think big, think small: it doesn't matter. The Web can do something for just about everyone. And given the right strategy, it can do it brilliantly.

Leigh Buchanan is the editor of Inc. Technology.

Company: Daddy's Junky Music Inc.
Revenues: $33 million
Web address: www.rockauction.com
Site launch cost: $10,000
Current technology profile: OpenSite Auctions, C2net Stronghold, Verisign OnSite, Sun Sparc server, DigitalNATION, Cyber Cash
Why we love it: Dynamic on-line auctions turn aging inventory into hefty revenues
Categories of success: ROI & Innovation

Two years ago, the rock group Limp Bizkit was an innovative but obscure performer; today it's so mainstream that it seems positively déclassé. The same could be said of on-line auctions. But in December 1997, when no one knew from eBay, Daddy's Junky Music began putting its own electric guitars and other musical instruments on the digital block. Today revenues from the Manchester, N.H., company's on-line auction division, RockAuction.com, average $30,000 a week.

Daddy's birth legend bears the slightly disreputable cast of a Seattle garage band. Its founder, Fred Bramante, was playing rock in college in the late '60s when he heard about a guy who was selling his guitar to raise bail money. Bramante, who in addition to his entrepreneurial activities has upon occasion sought the governorship of New Hampshire, bought the instrument, shined it up, and sold it for a profit. He then continued buying and selling used instruments part-time until 1972, when he took on a partner and leased a storefront in Norwalk, Conn., that had been vacant for 30 years. Inspired by the broken glass and dead pigeons on the floor, Bramante's young son christened the new business "Daddy's Junky Music." The name stuck. How could it not?

Although Daddy's origins are in rock, it is very much a business -- a business that suffered from having too much cash trapped in slow-moving inventory. "A significant part of our inventory is essentially computers: microprocessor-based keyboards and synthesizers," says Robert Timmins, the company's first vice-president of E-commerce. "That kind of thing gets obsolete very quickly." For a while the company ran a liquidation center out of its Boston store, but it required a lot of hard selling from a knowledgeable staff, and not many customers showed up.

Then in 1982, Bramante began staging live auctions as grand-opening promotions for new stores. Those events attracted about 200 bidders each and proved far more efficient at moving Daddy's tired, poor, and huddled inventory than the liquidation centers did. "My motto is 'When things get cheap, the cheap get things,'" says Bramante, who fondly recalls his own first exposure to "auction fever," at an open-air affair in 1970. "A stuffed moose head came up for bid," he says. "It started at $20, and no one bid. The auctioneer lowered it to $10, and still no one bid. The auctioneer pleaded with the crowd to offer anything. I bid $1. He immediately said, 'Sold, and don't bring it back!' I was enthralled."

With the popularization of the Web, Bramante saw an opportunity to combine the excitement of a live auction with the imperative of a liquidation sale. The "RockAuction," as it came to be called, let anyone with an Internet connection bid on Daddy's merchandise. Among the connected were shoestring-budgeted college-age kids -- the perfect target audience. They found the opportunity for bargains irresistible: for example, a Korg Poly 61 synthesizer and an Ovation classical guitar, each of which retails for $600, recently sold on RockAuction for $100 and $175, respectively.

The company's first on-line auctions, in 1997, were spindly affairs; RockAuction offered only 50 or 60 items at a time. Today each weeklong event attracts 200 to 300 people who bid on up to 1,000 instruments. The company began offering daily auctions this fall.

Here's how it works: Say that an amateur musician is looking for a used keyboard. Once an auction opens, she searches for a product, then registers on the site, leaving her credit-card information. A meager opening bid of $10 could put her in the running for a Casiotone 610 model with slightly dingy keys. At the close of the auction, if she is the high bidder, Daddy's charges her card and ships her the prize.

"One of the nice advantages to our system is that we don't have to chase a private party for payment like you have to do if you're selling on eBay or Amazon," says Timmins. "Once an item is sold, we get paid immediately. Since we set the minimum bid, a single bid means a guaranteed sale." Bidders will sometimes pump prices into the stratosphere but generally inch up the final figure only 5% to 10% above Daddy's established floor.

Daddy's makes its best margins -- as high as 30% -- on the products its buys specifically to auction: closeouts from regular suppliers obtained at heavy discounts. "Our vendors value this as a way to increase their business with a major retailer, improve sales, and move product that is not selling through other avenues," says Timmins. Buy-to-sell products comprise about a third of what Daddy's puts out for bid at the RockAuction.

Not that those sales are effort free. "Behind all the magic of the Internet is a lot of hard work doing text entry, warehousing, and fulfillment," says Timmins. While many companies struggle to launch Web sites on the backs of existing staff, Daddy's E-commerce division is nine employees strong and includes customer-service reps, data-entry clerks, and a copywriter hired, in part, for his wry humor.

Fortunately, RockAuction's next addition -- consumer-to-consumer auctions, in which private sellers will pay Daddy's a modest listing fee and a commission on all items sold -- should be far less labor-intensive. It's also, of course, similar to what eBay and its imitators do. But with Daddy's early start in the world of auctions and its still rare focus on selling only its own merchandise, the company needn't fear being called derivative.

Tom Zabjek has no illusions about what sells the buildings his company designs. "We've spent a lot of money on photography," says the president of Lakeside Development Co., an architectural and construction-management firm founded in 1986. And indeed, Lakeside's Web site is awash with graphic testimonials to the company's expertise, their colors as saturated and composition as artful as photos in the glossiest shelter magazines. So dramatic are the Maxfield Parrish-like blues and golds of the 1997 "Gable View" project, for example, that you'll wish it was offered as a screen saver.

When the site was launched, in 1996, good looks were all it needed. Lakeside, in Mequon, Wis., had just built a model home at the behest of Midwest Living magazine, and the principals wanted to wring maximum advantage from the attendant publicity by linking a page to the magazine's heavily trafficked site. But as the Web itself became increasingly functional, Zabjek realized that his site could be more than just a beautiful stallion -- it could also be a workhorse.

The load Zabjek hoped the Web would bear was client communication. Lakeside's customers are mostly affluent frequent-flier types, people who want to be part of the gestation of their new homes but don't have time to hang around construction sites or trot from showroom to showroom picking out rugs and faucets. The CEO's plan was to hand those clients virtual hardhats by moving every aspect of project planning to the Web site and inviting them to participate there. So early this year Lakeside began creating password-protected areas for select buildings-to-be and populating those areas with preliminary floor plans, detailed specifications on everything from landscaping to shower doors, and links to the architect's preferred vendors. "The customer is involved in everything: choice of brick, stone, wall texture, carpeting, light fixtures," says Zabjek. "Let's say it's time to choose the kitchen sink. Our customer would log on and follow a link to the Kohler site, pick the sink they want, and then paste the model number into the spec for the kitchen. And we'd take it from there."

There's also a message board, through which clients, architects, and project managers negotiate the endless details involved in building luxury homes. (Lakeside also does commercial projects.) And since looking at blueprints isn't nearly as satisfying as watching the brick-by-brick birth process, employees post digital photos of the customer's construction site as necessary. Those photos present both overviews of the work and selected details. "If we had a question about how to finish out the fireplace, we could post a picture for the client and E-mail him a message asking what he wants to do," says Zabjek.

In the works are 24-hour live webcasts from construction sites, which Zabjek expects will both improve client oversight and save his own people some road wear. "Someone here might be waiting for a delivery of brick at a location that's an hour away. With the site, they can just sit at their desk and look to see if it's there," says Zabjek. "Although I suppose it could also work against us. A client might log on and see nobody at his site and say, 'What are you people doing?'"

Lakeside's Web site doesn't only serve outsiders. An internal-use section houses the company directory, a message center where staff members share thoughts on everything from office procedures to the annual outing, and an employee handbook that flashes the face of a different Lakesider at each access. "That last feature is very neat," says Zabjek. "When we hire someone new, they can use it to learn what everybody looks like."

Company: On Air Digital Audio
Revenues: $900,000
Web address: http://www.onair.ca/
Site launch cost: $30,000 (Canadian)
Current technology profile: Apache HTTP Server, Adobe Photoshop, Adobe ImageReady, Allaire HomeSite, TextPad, Sound Forge, RealNetworks RealServer
Why we love it: Audio-services company brings voice talent to clients -- wherever they are
Categories of success: Utility & Innovation

Greg Habstritt wants his voices to do the talking for him. Those voices -- recorded by 250 professional actors who range in tone from the authoritative to the soothing to the comical -- are the hallmark of On Air Digital Audio, a seven-year-old Canadian company that makes broadcast-quality recordings for corporate clients. On Air's other hallmark is its technological expertise, a legacy from the days when it was a software-development company. Habstritt figured he could simultaneously show off both of those strengths by putting his voice bank on the Web.

Until July, clients scouting for a pitchman who could record their radio spots had to sit in On Air's studio while an employee played tape after tape in search of the perfect timbre. That was time-consuming for both customer and employee. Moreover, On Air couldn't appeal to people outside the Calgary area, since tapes played over standard phone lines sound lousy. Now that the company's voice samples are available in RealAudio over the site, "customers can sit at home at night or on the weekend and do it," says Habstritt. "When they're in the office, they can call the boss or a client in and say, 'Here's the voice I was considering.' They don't need a tape. They don't need a CD player. All they have to do is log on."

To make browsing easier, voice samples are divided by gender and prefaced by descriptive phrases such as "rich, mellow, and classy;" "quirky, fun;" and "the reading of 'every guy.'" "Clients need help crystallizing what they're looking for," says Habstritt. "We get people who say things like 'Can you get somebody who sounds like he likes the color green?'"

Along with the voice bank and thousands of music and sound-effect samples, On Air has posted a portfolio of sorts: a dozen of its finished products. Those range from the narration for a CD-based game that teaches animal sounds to children to the audio portion of a presentation for temp giant Kelly Services. The portfolio and voice bank are meant primarily to draw new customers, and they've done that. Habstritt estimates that the site has attracted about $10,000 (Canadian) worth of business. "That includes one account in the United Kingdom that contacted us after seeing us on the Internet," he says. "The chance of getting that work before? Less than zero."

But marketing is only a whisper in Habstritt's Web strategy; he expects the shout to come from on-line project management and distribution. Consequently, On Air has created password-protected pages on which customers can compose audio scripts and later listen to different actors sampling those scripts. Customers can also revise existing scripts, a major time-saver for those who use On Air to create staff directories and other in-house telephone applications. "Employees leave, employees come, and you're constantly having to update the whole script," says Habstritt. Before the Web site, customers would courier over the CD or digital audiotape containing their directory; On Air would hire the original voice actor to rerecord the pertinent piece of the script and then return the modified tape to the customer. Now the customer simply goes to a personal Web page and types the changes into an archived script. The voice actor, working from a studio, uses the customer's password to upload the changes; On Air then downloads them directly into the customer's phone system. "If I'm on a six-week trek through Brazil, all I have to do is find an Internet cafŽ and I can edit my script," says Habstritt. "It's pretty powerful."

The Internet's ability to transmit audio also allows On Air to draw from a geographically dispersed pool of speaking talent. About 65% of the company's actors live in Alberta and record in On Air's studios. In the past, when On Air tapped someone from a different part of Canada or from the United States, it had to pay for the actor to record in another studio. But now many voice actors are building ISDN-equipped facilities in their own homes. From there they can transmit their voices over digital telephone lines without degrading the quality, and On Air records those voices live at the other end.

In addition, the Web allows On Air to all but eliminate distribution costs, which previously included both physical media (tapes or CDs) and shipping that media to customers' offices and radio stations. When the company is voicing cartoon characters for its new U.K. account, for example, the customer uploads its drawings onto the site at the end of the day and, thanks to the time difference, downloads the recorded voices the next morning. "There's no cost of distribution," says Habstritt. "And in our industry those costs are pretty significant."

Still in the works are a forum through which clients can share questions about audio and a real-time system that will allow them to check a project's status. The company also plans to roll out home pages for its voice actors, "so any tapes or marketing materials they send to prospective customers would have their Web address on it," says Habstritt. "Those customers would visit the talents' Web sites to find out more about them and see the link to On Air and click on that. Then after a bit of reading they might decide to get On Air to do the project using this particular voice talent."

Habstritt is aware that while his on-site services are both surprising and welcome to most clients, some -- particularly the new-media companies he is aggressively courting -- simply expect them. For that reason he anticipates that his business will become even more Web-centric over the next year. "I think the Web site confirms people's thoughts about us," he says. "If we're going to be delivering our services to new-media clients, we need to prove that we know what we're talking about."

There's a certain Lake wobegon-ish quality to seed company Prairie Frontier. Maybe it's owner Deb Edlhuber's Wisconsin accent. Maybe it's the no-nonsense way she describes the science of growing wildflowers from her company's products ("You drop 'em on the ground and stamp on 'em"). Or maybe it's the Waukesha, Wis., company itself, which has the same nostalgia-invoking simplicity as Bertha's Kitty Boutique and the other homespun enterprises that populate Garrison Keillor's nowhere-and-never Minnesota town.

What distinguishes Edlhuber from the fictional Wobegoners is that she is doing business on the Internet. But unlike tiny companies that use the Web to cloak their diminutive size, Prairie Frontier's site accentuates the personal nature of the business. It does so most effectively in the company's birth history: Edlhuber's eloquent account of the trauma she endured when a tornado destroyed the woods on her family's farm, followed by her delight when a carpet of wildflowers -- previously dormant due to lack of sunlight -- sprang up and covered the devastation. Eager to identify the newcomers, Edlhuber and her husband began photographing the plants in all their bewildering variety: the ice blue starburst of the bottle gentian, the butterfly-baiting clusters of swamp milkweed, the delicate teardrops of the cuckoo flower. Soon boxes of photographs crowded every surface of their home.

The couple also began propagating seeds, and by 1995 Edlhuber was selling them to garden centers in southeastern Wisconsin. "The kids were all in school," says the mother of four. "It was meant to be just a little part-time thing." But as a wholesaler she didn't have much contact with the public, and as an enthusiast she had boatloads of information to share. So in 1996, Edlhuber bought her first-ever PC, signed up with America Online, and began a course of self-instruction on all things Web-related. "I was on-line for about six months, just reading, reading, reading," she says.

In 1997 she splurged on a scanner and, using her newly acquired technical expertise and a collection of scripts found on-line, she built www.prairiefrontier.com. "I had no training in this stuff: wildflowers or computers or any of it," says Edlhuber, the amazement still evident in her voice. "We put our Web address on our packaging and our displays. People would buy the seeds at garden centers and see the URL and go to the site to get information."

She also signed up with LinkExchange, a tool for small and midsize companies that want to swap banner ads, and that turned the rivulet of visitors into a larger torrent. "I was shocked because I didn't realize I could reach so many people," says Edlhuber, who didn't need to numerically track individual visitors to know her site had succeeded. "We had never advertised before, and I had no idea it would snowball like that."

The big draw, of course, was the photos, which Edlhuber patiently posted one by one. Each photograph is like a small, sweet breeze and is accompanied by the plant's vitals: what it is called, how tall it grows, how much sunlight it needs, what wildlife it attracts. Site visitors saw and, not surprisingly, they coveted. Soon Edlhuber found herself selling direct to consumers, with average orders ranging from $50 to $100. "When I went on the Web, I had no shopping cart," she says. "But I had people E-mailing me like crazy, saying, 'I want to buy this, I want to buy that.' Demand forced me to go retail."

As Prairie Frontier grew from a diversion into a full-time business, Edlhuber continued to scan the Web for ideas, and new features sprouted on her site like buttercups. Since the site's launch she's added games, wildflower-themed puzzles, and a slide show on how to create a prairie. (The company sells prairie grass as well as flower seeds.) Personal home pages for visitors blossomed briefly but wilted just as quickly. More popular have been discussion forums, some devoted to gardening issues (Is it too late in the year to plant spiderwort?), the rest ranging from crafts and cooking to computer programs. "They just go in there and talk about anything," says Edlhuber. "Sometimes it's plants and sometimes it's 'How's your nephew?'"

The discussions are generally self-sustaining, but Edlhuber pokes her nose in several a times a day, mostly to answer plant-related questions. And since the participants -- almost all of them women, many of them stay-at-home moms -- aren't your typical chat-room habitués, she's posted extensive suggestions for using the forum, including a glossary of emoticons that they employ with abandon.

Another resounding success for Edlhuber has been a series of free musical greeting cards that people can send by E-mail; around Christmastime more than 6,000 a day flew off the site. Visitors choose from more than a dozen designs that Edlhuber has created from her own photographs; they then type in their message and select a tune that travels with the card. (Edlhuber downloaded all the music files from several public- domain sites. Bach is popular. So is Celine Dion.) "The cards are free advertising for me," she says. "When someone sends someone else one of our cards, Prairie Frontier's name is on there. When someone picks up one of our cards, the sender is notified, and there's Prairie Frontier's name again." Several visitors to the site have offered to pay her to create custom cards, and -- in a digital-product-spawns-physical-product twist -- she's even considered spinning off a paper stationery line.

Although Edlhuber spends virtually nothing on her site, recently she has been on a domain-name shopping spree, shelling out $1,200 for 15 or so botanical labels such as Wildflowerseeds.com. Her first order of business is Gardencountry.com, where she is considering running auctions and selling garden tools, furniture, and supplies. "I've been trying to get my thoughts together on how to sell merchandise, and I haven't yet made a decision," she says. "I could buy inventory but then I'd need a place to store it, or I could perhaps sell for other reliable companies and allow them to take care of shipping. It's too soon to say."

The new site will also contain an enormous database of flowers, trees, shrubs -- everything but wildflowers and prairie grass. "I don't know if it will fly," admits Edlhuber, "but I'm willing to try anything. It's only my time."

Edlhuber also continues to tinker with the Prairie Frontier site, but she says two things are unlikely to change. One, of course, is the photographs, which she calls "my trademark." The other is the site's overall look and feel. "I've got ideas, and I've thought about making it look more professional," she says. "But everyone keeps telling me, 'Don't change a thing!'"

US Sports Camps has close ties to Nike, which may explain the company's "Just Do It" approach to the Web. In 1998 this operator of 350 sports camps spent $55,000 building an elegant, information-packed commerce site; this year it's shelled out an additional $25,000 improving and advertising it.

The site -- in conjunction with an existing robust database -- is producing superstar results: US Sports Camps, in Kentfield, Calif., has done $1.4 million in on-line sales over the past year.

The company specializes in one- and two-week sleep-away camps at which its participants receive intensive training in one of a dozen sports, including tennis, swimming, golf, and basketball. The camps are generally staged on college campuses and run by college coaches; the coaches hire their own staffs and teach the kids, while US Sports Camps manages marketing and administration. (A sponsorship arrangement allows the company to brand its programs Nike Sports Camps and clothe campers and staff in Nike products.)

Since it became a full-fledged business, in 1986, US Sports Camps has relied on heavy-duty direct-mail campaigns to attract young athletes, as well as advertisements in publications like Tennis Magazine and Golf Digest. "This is mostly a mom-and-pop industry where people will send out a black-and-white fax sheet saying, 'Here's when it's running, and here's what it costs,'" says founder and CEO Charlie Hoeveler. "We've always been much more professional. We have great-looking brochures with lots of photos to show people what a wonderful product we have."

It is also, Hoeveler says, "a perfect product for the Web." For one thing, the company's marketing is information intense: US Sports Camps fields hundreds of camps every summer, each of which requires a detailed description. Dates and programs change constantly. Campers have to register, and that registration information must move smoothly into the corporate database and from there to coaches on far-flung college campuses. Customers pay by credit card. And of course there's no physical fulfillment. The Web couldn't make more sense if it were programmed in Astroturf.

US Sports Camps' first noninteractive effort was a putter of a site, but the company went almost immediately to the wood. By adding on-line registration and payment features, last year it enticed 500 people -- almost all of them new customers -- to sign up and enter their credit-card numbers. By September, thanks largely to a $20,000 banner-ad campaign on Yahoo and the site's laudable ease of use, that number had climbed to 2,870. International business alone is up threefold. "I would love to see 40% or 50% of sales come through the site," says Hoeveler. "Our unofficial target this year is 20%."

Those sales gains are matched by gains in efficiency. The camp business is, obviously, seasonal, with almost all registration occurring between March and July. During those months, US Sports Camps bulks up its customer-service staff. But this year, "we've done 20% more business with 20% less staff because people are registering over the site," says Hoeveler. "What's more, the ratio of the total number of calls to the number of calls where people actually register has gone way down. Even if they're not willing to pay on-line, people go to the Web, they see all the prices and the dates, and they make their choices. When they call, they're ready to commit."

Campers can also make travel arrangements on the site, through a link to a San Francisco agency. "Sometimes a customer on the phone will ask to be connected to our travel desk," says vice-president Charley Biggs, who spearheads the Web effort. "We can't do that, because it's not in-house. If they use the Nike Sports Camps Travel Desk on the Web, it feels to them like they're working directly with us."

By creating Web-based access to its database, US Sports Camps has also practically eliminated the thousands of calls it receives from coaches checking their own camps' rosters. "In the past, if there was a tennis camp starting at Dartmouth on Sunday, August 10, we would have had to take all the registration data for kids going to that session, make a hard copy, and FedEx it out to the Dartmouth coach a week before," says Hoeveler. "Then during that week there would be all kinds of changes: last-minute campers signing up, people dropping out, travel changes, money coming in. So on the Friday before the camp we'd have to send out more FedExes with those changes."

Now coaches simply log on to a separate administrative site, enter their camp's pass code and a personal identification number, and get immediate access to their own up-to-the-minute rosters listing everything from campers' names and addresses to whether they need to be picked up at the airport. In response to this service, "every one of our coaches has said, 'Oh my god, you guys are unbelievable,'" says Hoeveler.

Moreover, US Sports Camps is adding features to the site, such as sports-specific bulletin boards, meant to attract campers even off-season. And it hasn't been lost on Hoeveler that people who visit at that time might be tempted to register early. The company can start signing up campers for next summer in December, the CEO says. "I just sent a message out to all 40 tennis-camp coaches saying, 'I'm going to be on your tail to get confirmation of new dates and prices because we are going to update this Web site. We would like to get those early deposits.'"

Hoeveler doesn't think coaches will mind the extra pressure, considering the exposure they get in return. When Mom logs on to find a tennis camp for Peter, she sees there's also a volleyball camp for Paul and a golf camp for Mary. "The cross-marketing opportunities are amazing," says Hoeveler. "More than one kid in a family often means more than one sport. With the site, we can capture all that business."

Livingston & Haven has the Clark Kent of Web sites. A casual surfer stumbling across the company's home page wouldn't give it a second glance. But beneath that drab exterior lurks the power of an industrial superhero.

The 52-year-old L&H, in Charlotte, N.C., distributes hydraulic and pneumatic devices: fluid-powered drives, valves, and other parts used in everything from elevators to airplanes. The company represents 20 major manufacturers and has about 8,000 regular customers, for whom it performs a variety of services. It sells them products. It repairs those products. It helps monitor their inventories so that, for example, Caterpillar never runs out of the controls it needs to make its earth-moving equipment actually move earth. The Web site helps L&H do all those things and more.

To date, only about 30 companies buy from L&H on-line, but revenues from the site doubled every month from March to June. The company hopes to have its 3,000 top customers, accounting for 70% of revenues, relying on the Web by the end of 2000. And why wouldn't they do so, wonders CEO Clifton B. Vann III. The Web site manages the customer relationship from soup to nuts, which means that customers need to depend less upon the 9-to-5 limitations of human help.

The Web site wasn't much of a stretch for L&H, which is unusually technology intensive for its industry, says Vann. Over the years, the company developed a powerful customer database containing elaborate purchase histories as well as information on the types of machines running at its clients' sites. So when the Web came along, all Vann's half-dozen IT folks had to do was give buyers a window through which to peer at the old data and plug in new information about themselves (hence the low development cost). The site that L&H debuted in January included a complete catalog, replacing the company's hard-copy version for a savings of $100,000. But far more interesting -- and more important to L&H -- is the activity taking place behind the scenes.

The site's organizational metaphor is the customer "room," a password-protected chamber furnished with live information on everything in L&H's database pertaining to that account: past order history, current order status, a menu of frequently purchased items, and customer-specific pricing. L&H sells some large -- and expensive -- hydraulic systems that it also repairs; customers using that service can check digital photos to see how their patients are progressing. The company also maintains lists of all the hydraulic parts used in its customers' machines -- regardless of whether the customers have ever ordered those parts from L&H. As a result, "if the customer needs a spare item, he doesn't have to crawl all over the machine looking for the number; we can just show it to him on the Web," says Vann.

Also in the rooms are lists of customers' current inventories of L&H products. Every time customers use an L&H part, they let the company know by E-mail. L&H notes the change on the list and, when the volume falls below a preset floor, automatically sends out reinforcements. "It fits in with just-in-time theory," says Vann. "We can keep them fully stocked with items they're using just by looking at the movement of those items through their rooms."

The customer rooms have proved so effective that L&H has extended the concept to its employees. The company's staff site lives on one of the same servers as its external site and draws on the same applications. Every employee has a room furnished with some common information -- HR policies, links to FedEx -- and some more specialized features, such as a contact-management system for sales reps. Employees can even add links to outside resources, so when they sit down with that first cup of coffee, their favorite news sites are just a click away.

Maggie Smith's customers may not know much about art. Sometimes they don't even know what they like. So when those customers are choosing 150 paintings for a nursing home or 50 art posters for a corporation's headquarters, they want their colleagues' opinions.

"There are almost always multiple decision makers, whether it's a designer showing choices to the end client, members of an art committee consulting with one another, or branch managers who need corporate approval," says Smith. "The ability to show each other choices is essential."

But instead of dog-earring the pages of a catalog and routing it through the office as they once did, ArtSource's clients now direct coworkers and bosses to personalized on-line galleries. Clients create the galleries themselves by filling in on-line forms with their company information. Once a gallery exists, customers hang its virtual walls with works they may want to buy by clicking on images, in the way that consumers on retail sites place items in a shopping cart.

The galleries stay on-line as long as customers want, so a decorator designing a company's new Pittsburgh office can look back and see what's hanging in the Raleigh headquarters. When customers can't decide which of two seascapes will look best against a royal blue color scheme or need help choosing a frame, they can E-mail ArtSource. One of the New Berlin, Wis., company's seven in-house consultants -- all with backgrounds in fine art or interior design -- will log on to that customer's gallery and then E-mail back advice.

Many small-business Web sites evolve gradually as company owners gingerly test the digital waters. But artsourceonline.com, which launched in July, emerged full-grown like Minerva from Jupiter's forehead. "For the past year or so I've been having my reps talk to customers and ask them 'Are you on the Web?'" says Smith, who entered the corporate art market in 1989. As more and more of those customers replied in the affirmative, Smith decided it was time.

For years Smith and her staff had relied on the kludgey mechanism of taking orders by mail and phone. Once they received a request ("I'm looking for pictures of fire trucks for a pediatrician's office"), they'd sort through baskets full of playing-card-size images, reproduce a selection on a high-end color copier, and send them to customers by Priority Mail. Now Smith has migrated a streamlined version of that procedure to the Web. ArtSource customers plug in their own criteria (such as color, style, subject, size, and media) and the site returns thumbnail images of all the matches in ArtSource's inventory. Clicking on the thumbnails brings up larger renditions as well as information about the various pieces. If customers like what they see, they store the works in their galleries and invite colleagues to come in and play critic.

Within a few days of the site's launch, 15 corporate customers had created their own galleries, including Lexis-Nexis, which auditioned 150 potential purchases. Smith expects the new method will save ArtSource at least $30,000 a year in mailing and copying costs. Eliminating the print catalog will save $25,000 annually, and scrapping the twice-yearly updates to that catalog will save another $10,000. "We project that within a year half our business will be conducted at least partially through this resource," says Smith.

Last July, just a week before the site was scheduled to launch, Smith learned firsthand just how much easier the Web will make her life. A request from Nielsen Media Research for six pictures for a new office building sent the CEO and one of her sales managers to the company's picture baskets, where they culled through more than 200 images trying to match swatches of fabric sent by Nielsen. They chose two dozen images, made color copies for the client and black-and-white copies for themselves, and dispatched the package to New York.

Not long after they'd refiled the images, the customer called back and requested that ArtSource send color copies to the Atlanta office as well, which meant that Smith had to pull, arrange, copy, and mail all the images a second time. Then everything ground to a halt while the Nielsen folks waited for their facilities manager to get back from vacation. "One week later we would have been able to search by color group on the Internet -- it would have taken two minutes," says Smith. "Then we could have saved all 25 possible choices to a gallery where they could be seen by not only New York and Atlanta but also by the person on vacation."

And, in fact, a week later, when a Nielsen executive vetoed all of Smith's choices for his office, she quickly created a personal gallery for him and filled it with a dozen new prints.

Now that the ArtSource site is up, Smith is fleshing it out with a bargain-basement area, a "preferred clients" gallery where ArtSource's best customers get first crack at original work, and sample galleries for hot prospects. "From now on," says Smith, "we're training everyone in the company to think Internet first."

Company: WaterMark Group Inc.
Revenues: Under $100,000
Web address: www.atmmagazine.com
Site launch cost: $14,000
Current technology profile: Microsoft Windows NT Server, O'Reilly WebSite Professional Web Server, O'Reilly WebBoard Message Board, Microsoft SQL Server, Inline iHTML Enterprise, Red Hat Linux, Apache HTTP Server, T.c.X MySQL
Why we love it: This small vendor of automatic-teller supplies didn't bank on becoming a profitable on-line publisher, but now its Web magazine brings in 40% of revenues
Category of success: Innovation

Tom Harper joined Watermark Group in 1996 as a salesman. Three years later Harper still works for WaterMark, but now he's the senior VP and a magazine publisher. For a guy who had long harbored literary aspirations, it's an unexpected but welcome turn of events -- and one brought about entirely by the Web.

Alan Fryrear started WaterMark in 1994 as a business-forms and graphics company. A year and a half later, he hired Harper to head up a spanking-new ATM-supplies division, which sold things like receipt paper and printer ribbons to local banks and private ATM owners. Fryrear and his new vice-president soon concluded that WaterMark was missing out on a national market: it needed a catalog. The job of creating one devolved on Harper, the author of (unpublished) fiction and a former writer for radio trade publications.

That was in 1997, when Web pages were spreading like kudzu, and Harper figured that WaterMark should have an electronic catalog as well as a paper one. So he threw up a site listing WaterMark's products. To keep customers coming back, he added ATM-related stories lifted from a free industry news wire. The hit count spiked, and Harper -- trying to figure out why -- went out on the Web to see what WaterMark was offering that no one else was. No other site, it turned out, was dedicated to the ATM industry -- indeed, there was precious little information on teller machines anywhere on-line. "The publishing community obviously did not see in the ATM industry a large enough market to be worth servicing," says Harper. "What I saw was a small market that I could dominate. And the cost would be so low doing it on-line. I said, 'Boy, this is an opportunity!'"

And so ATMmagazine.com was born, a production of WaterMark Group but with its own identity and advertising-based revenue stream. For the first six months Harper lone-wolfed it, updating the content weekly with rewritten press releases and stories plucked from news services. He sold ads to vendors like NCR, Triton Systems, and Diebold, all of whose products WaterMark distributes.

As the publication grew larger and assumed a more professional air, Harper hired a freelance writer to help out. His own journalistic efforts expanded to 1,500-word features. "I used reporting and writing to teach me the business," he says. "I just thought up as many questions as I could and turned the answers I got into articles. The industry was so young that lots of other people were as ignorant as I was, so we were learning it together." Wanting visitors to learn from one another, Harper created a message board where readers could hash over such subjects as getting into the cashless ATM business, printing coupons on the backs of receipts, and incorporating ads into their screens.

The publication boosted the supply division's sales: WaterMark's new on-line store benefits from a prominent link on ATMmagazine.com. Advertising has taken off as well. To date, WaterMark has sold more than 90% of its banner inventory to 10 major sponsors, and ad revenues are up to nearly $20,000 a month. Harper also sells hot links to industry vendors and associations, and classified ads (Is your drive-up kiosk showing signs of wear? Refurbished models available, cheap!) for a frugal $75, which buys a two-month run. Meanwhile, vendors who buy space in the magazine's virtual-trade-show area can create their own minisites, using a template provided by WaterMark.

Three years after Harper launched the site, WaterMark's original business -- sales of business forms and ATM supplies -- accounts for 60% of revenues; the rest comes from on-line advertising and services.

As ATMmagazine.com has loomed large in the business, Harper has staffed it up, hiring two editors from local newspapers and an ad salesperson. The editors now update news stories daily, and features are less product-centric, dealing with such subjects as Lloyd's of London's decision to scrap human tellers and the knotty issue of ATM surcharges. Still, even with the addition of professional journalists, investigative or controversial stories are rare. "There's not a lot of dirt to dig up," says Harper. "We're just serving the industry with information."

Now that the on-line magazine is thriving, WaterMark may spin off a print version, which would allow it to sell more advertising space and possibly subscriptions. And the site has led to some additional gigs for Harper. For instance, a London company discovered him on-line and asked him to serve as chairman of the first-ever European conference on ATMs and to write a book about the global ATM industry. "I've always been interested in publishing," says Harper. "Because of the Web I've been able to live out my dream."

Al Gore might want to consider using Tim and Betsy Small in his campaign ads. Compaero Inc., which the couple started in their basement 10 years ago, embodies two of the presidential candidate's favorite themes: the need to nurture an ever-more-powerful Internet and the need to dismantle the Rube Goldberg-esque inefficiencies of government.

Compaero, in Midlothian, Va., sells connectors -- electronic components that meet military specifications and are used to build everything from space shuttles to naval warships. The company had been an exporter, servicing the same few overseas aerospace companies year after year. But after attending an AT&T seminar on E-commerce in 1996, Tim Small realized he could get tiny Compaero's face in front of thousands of new clients, including -- in a reverse take on the globalization trend -- domestic ones.

Among the prospects the Smalls sought were U.S. military installations and agencies within the Department of Defense (DOD). Historically, the DOD had been obligated to conduct all its procurement through a federal clearinghouse -- a time-consuming, expensive, and often frustrating procedure. But recently, the department freed its procurement officers from that obligation for smaller purchases and even issued them government credit cards to further streamline the process.

Those changes opened up a huge new market for the Smalls -- as long as they could get exposure to crucial purchasing officers. And they did. Since the company launched its E-commerce site in February, it has received more than $250,000 in orders from 100-plus new customers.

"The magic is that we are transforming ourselves from doing a lot of business with a small number of customers to having a very broad base," Tim Small says. Until 1997 -- the year Compaero fielded its first marketing-only site -- 80% of the company's business came from 40 accounts. Now, Small says, Compaero has more than 200 active customers.

About 20% of those new customers are naval, army, and air force facilities -- the "dot-mils," as Small calls them -- who find Compaero's site through its banner ads on AltaVista and other search engines. "Some of our older customers are not on the Internet," says Small. "But the navy is there. They find all the information they need and place an order using a government credit card." And instead of waiting 180 days, the typical turnaround time for customers using the government's clearinghouse system, "we have it to them in a week or two."

Although Compaero's site isn't much in the looks or personality department, it is the ideal tool for procurement officers who may need to buy many connectors at one time in order to build a particular custom part. The site links to a 200,000-item database of connectors, relays, circuit breakers, and switches that the Smalls know are readily available from their favored suppliers.

Each piece comes with a mind-numbing roster of specs -- size, material, how the material will perform at different altitudes and temperatures, polarization and rotation data, and so on. Compaero's on-line catalog presents logically ordered menus of options that allow users to configure their particular needles with almost complete disregard for the mountainous haystack in which they reside.

Once the part is created, the database returns its price in various quantities, its availability, and a list of accessories that accompany the component. Like any business-to-business site worth its salt, Compaero's site also offers password-protected order-tracking and account information.

One of the site's most impressive aspects is the way it deals with special requests. If a customer bypasses the menus and simply types in a part number, and if that part number doesn't exist or isn't listed in the database, the order automatically becomes a special request for quotation and is sent directly to Small. Then Small or one of his eight employees searches for the item in question and responds within 24 hours. (The researcher either suggests a substitute part or finds the item by calling around to manufacturers.) "No matter what, we take care of them," says Small.

In addition, each part is accompanied by a diagram so that engineers designing the cockpit of a 747, for example, can see what size and configuration connectors they'll need to wire together the instrumentation. Small is transforming all of those individual diagrams into libraries of PDF files (files that are easy to exchange over the Internet and that anyone with a free Adobe Acrobat Reader can view). By the end of the year, he expects to have more than a thousand such files posted on the site, making it even easier for customers to choose the right product.

Small anticipates that customers and noncustomers alike will use the PDF files for research, and since each one will be stamped with the Compaero name, he hopes to convert a large number of those researchers into customers. "Every time a customer downloads or views one of these sheets, they are seeing it in the Compaero format," he says. "So we are using the Web to brand the name."

In September, Small was expecting another spike in traffic, thanks to a stepped-up banner program. Compaero's ads run on Yahoo, Lycos, and AltaVista and appear whenever anyone types in the words mil spec, short for military specification. Compaero is also experimenting with its first print ad -- in an issue of the publication Connector Specifier, which is distributed at the industry's largest trade show. Finally, the site should benefit from the attention of a full-time marketing manager: the Smalls' son, Robert, who was swept up by the project while on summer break from Virginia Tech.

Tim Small's own enthusiasm is so intense that he just barely manages to retain an even keel. "If this turns us into a $50-million company, then I can sit back and say, 'Wow, isn't that great?'" he says. "If it doesn't, I can still sit back and say, 'At least it's been very exciting.'"

Business owners with strictly local clientele generally want to know two things when it comes to building a Web site. The first is, why bother? The second is, assuming I bother, what should I do with it?

Bob Jones can answer both questions, and his responses aren't the obvious ones about boosting sales and encouraging repeat business. Since launching a site in February 1998, the owner of Quality Transmission Service, in Tempe, Ariz., has seen only two or three new customers a week bearing printouts of the company's Web-only coupons. That's not bad when you consider that in a good week the six-employee shop services only 14 to 18 cars, but it's certainly not putting Jones on a fast-growth track. And since Jones does only transmissions, he probably won't see those Web-won customers again for years.

But the Quality Transmission site, which Jones built on his own for a pittance after learning the basics from a friend, does something he considers more important than generating revenue. It raises the reputation of his industry -- and his own reputation as one of its fiercest advocates. "This industry is perceived very negatively by the public," says Jones. "Anything I can do to alleviate that is going to help the credibility of us as a company."

Quality Transmission's site is the very model of a local-business Web presence. It offers services to the residents of Tempe: those Web-only coupons, a map to the store, notices of job openings, and information on a school-to-work program that Jones supports. It inspires confidence: open the site and you're greeted by a link to the Better Business Bureau and the company's 17-point code of ethics. And it's informative: it includes instructions for self-diagnosis (Suspect a transmission problem? Check the fluid level and condition), frequently asked questions (How long does a transmission normally last?), and even a quiz (Transmission fluid that looks like a strawberry milkshake could indicate what?). "People don't know how transmissions operate, so they have a very uneasy feeling when they go to someone who is supposed to have an intimate understanding of the subject and that person tells them they're going to have to spend money," says Jones. "We've put these tools up there to give them a better sense of what's going on, so it's not so one-sided."

What Jones does to reassure his in-shop customers he's happy to do for the transmission-phobic world at large -- even if it doesn't net him a dime. Anyone who wants to "Ask Bob" an auto-related question is guaranteed a personal answer, usually within 24 hours. Visitors from Guam, Italy, Canada, Portugal, Germany, the Philippines, Brazil, and all over the United States have taken him up on it: Jones spends close to an hour and a half a day answering questions about funny sounds and sticky transmissions. "For me this is kind of a payback, like community service," he says.

But as much as the site has, Jones thinks, what it lacks is as least as important: namely, sales pressure. "Advertising is mostly a come-on," says Jones. "It appeals to the customer to make contact with the business, and then the business tries to sell the customer something he may not be in a position to buy. I have 35 or 40 pages on this site, and from that customers can learn all they need to know about me and this company. If they can decide for themselves, then I'm happy."

Vacation marketing has to be compelling. Very compelling. Resorts, tour guides, and organizers of treks through rain forests, deserts, and similarly exotic locales routinely ask customers to exchange thousands of dollars and their year's allotment of leisure time for the opportunity to be transported emotionally as well as geographically. If those companies' advertising fails to excite, consumers will stay home and use the money to buy larger televisions and subscriptions to National Geographic.

Well, the tour-and-ticket industry couldn't find a better traveling companion than Ex Officio, a 13-year-old manufacturer of apparel for those who venture forth, and the very model of on-line retail design. Like the best magalogs, the Seattle company's Web site isn't so much about selling clothes as about selling the whole travel experience. In fact, customers are four screens in before they even encounter a garment for sale. On most retail sites, that would be annoying. But at Exofficio.com the delay gives visitors time to soak up the dreamy vista of a mountain lake in Vietnam, a panoramic display of electric blue Caribbean waters, and a sunset so dazzling it makes you squint. As a result, when visitors finally reach the on-line store, the mundane act of clothes shopping has become the means to a more compelling end: I want to go someplace -- now!

Ex Officio's reinforcement of the "Away Is Good" message should be enormously helpful to the company's hundreds of business partners -- mostly outdoor-clothing retailers and travel companies -- who will be the primary drivers of traffic to the apparel manufacturer's site. Like many CEOs, Ex Officio's Joe Boldan did some serious brow furrowing over how to move to direct sales without twigging off his dealer channel, which includes retailers like REI and Paragon Sports. Boldan's solution was an ambitious affinity program that would make the Web site largely dependent on click-throughs from business partners, rewarding them with 15% of the sale price on purchases made by their referrals. "The retailers typically don't make a clean 15 points on their business, so it's great for them," says Boldan. "And it's terrific for us because we don't have to prospect."

It's also incredibly efficient for customers, who can search for a particular item or browse through practically labeled categories ("In Transit: What will you wear on the plane?" "Stay Dry: Waterproof/breathable outerwear that packs tight, travels light and keeps you dry"). Click on a category to pull up a list of products (and some more of that gorgeous travel photography). Roll your cursor over a product name -- the Active Zip turtleneck, for example -- and a thumbnail image of that shirt appears. Click on the item and you get the enlarged view with an order opportunity; a list of features, fabrics, and colors; and a testimonial quote from a satisfied customer. "We want people to know why we've included these features, why it's important that this fabric dries overnight, and how to pack without lugging six bags from hotel to hotel," says marketing manager Janine Robertson.

But Ex Officio wants its site to be more than just a store. "We want it to be a virtual community for travelers," says Robertson. Communities, of course, are equal parts content and interaction; the company achieves the former with its packing lists and tips and, more ambitiously, with a "Travel Journal" featuring monthly articles on popular destinations.

The interactive piece of Ex Officio's community is a forum through which travelers share advice and relate their globe-trotting experiences. Robertson is considering revving up the conversation by exhorting the company's tour-operator partners to solicit their customers' participation. "We felt it was important to link people not just to other sites but to each other," says Robertson. "Maybe they'll talk about what their favorite Ex Officio products are. Or maybe they'll talk about what's the best restaurant in Bangkok. Either one would be great."

Company: Results Accountants' Systems
Revenues: $12 million
Web address: www.ras-net.com
Site launch cost: $146,000
Current technology profile: Microsoft Windows NT, Microsoft Site Server, Microsoft SQL Server, Microsoft Visual Interdev, Allaire HomeSite, O'Reilly WebBoard, Webmaster ConferenceRoom, mIRC, Mal's e-commerce, Sausage Software HotDog Webmaster Suite
Why we love it: This on-line community turns a one-shot workshop for accountants into a lifelong commitment
Categories of success: Utility & Design

Paul Dunn would be the first to admit that an Outward Bound program for accountants sounds like something out of Monty Python. That's just fine with the founding chairman of Results Accountants' Systems (RAS), who desperately wants his normally mild-mannered clients to break out of their conservative shells and become, in Dunn's words, "heroic." And if he has to dress them up like pastry chefs and have them compete to build the tallest layer cake to achieve that, well, then layer cakes it is.

The cake-construction contest was the crowning event of a recent RAS boot camp, the Pleasanton, Calif., company's signature educational program, held seven times a year in the United States, the United Kingdom, and Dunn's native Australia. The camps, which extend over four intense 14-hour days, are meant to stretch participating accountants' conceptions of themselves and their profession, while showing them how to help their own clients become more profitable. "The typical accountant is a historian -- he'll tell you what you did last year," says Dunn. "We're teaching them that they should be helping their clients create history."

Since RAS's launch in 1992, almost 7,000 boot-camp grads have walked away from the program bearing fond memories and an assortment of books. But there, with those typical conference take-aways, it ended. And that left Dunn dissatisfied. Dunn, a former marketing maven (his partner, Ric Payne, is the accountant), yearned to create a "brand," and he knew that one-shot deals do not a brand make. "We wanted this to be a lifetime partnership with our clients," says Dunn. Such a partnership would benefit RAS's customers by providing them with a fount of continuing education and support. And it would benefit RAS by creating a perpetual revenue stream.

What Dunn envisioned was a kind of petri dish in which to grow the RAS culture. So the company launched a Web site and populated it with articles, white papers, discussion forums, and help areas that Dunn and his staff monitor. The idea was that for a $285 monthly fee accountants could extend the boot-camp experience -- the educational and communal aspects of it anyway -- on-line. Some material lives on the site's surface, but the richest veins lie buried beneath passwords in what Dunn calls "the inner sanctum."

In addition to access to the inner sanctum, the monthly fee buys clients the right to describe themselves as "Results Accountants," an accreditation that didn't exist in the company's early years. Although that title matters a lot to boot campers, who like the punch it adds to their marketing materials, Dunn believes they value the on-line resources at least as much. "There is no question in my mind that if we didn't have the site, the revenue wouldn't be there," he says.

And the revenue is indisputably there. Of the 1,100 or so accountants who passed through boot camps last year, some 700 signed on to become Results Accountants. Virtually all of those devotees use the site -- many of them regularly. In addition, old RAS clients that the company hadn't heard from for years are availing themselves of the new services. To date, about 700 former clients -- accountants who went through the boot camps before the Web site made becoming a Results Accountant possible -- have signed up to either attend the boot camps again or, in most cases, pay for additional educational materials to bring them up to date with recent grads.

Last year Dunn, who felt that the site itself needed some updating, hired Web-site manager Paola Dovera to rethink its look, structure, and navigation. Taking the idea of community literally, Dovera created RAStown, a collection of buildings whose faces reflect their functions: RAS merchandise is sold in the mall; information for business owners is housed in the Chamber of Commerce; on-line resources are found in the Library. Discussion groups, held in the Café, are lively and decidedly international in flavor. "We could have an accounting firm in Boston that's working with a new client, and they could ask boot campers around the world, 'Has anyone ever worked with a manufacturer of belts before, and if so, what are some of the consulting protocols that you've used?'" says Dunn. Scheduled chats, which draw upwards of 100 people, deal with subjects as broad as how to get clients to commit to an extended business-development process and as narrow as how to use a particular piece of software.

The site has also provided some unexpected benefits. Last year, for example, RAS spent $80,000 to mount a conference for its alliance partners -- state societies and their educational organizations. But a hurricane shut down the host city of New Orleans, canceling the event. "So we did it on the Web," says Dunn. "It went great."

Company: Business Response Inc.
Revenues: $19 million
Web address: www.regcen.com
Site launch cost: $10,000
Current technology profile: Apple PowerBase 200, Adobe Illustrator, Adobe Photoshop, MetaCreations Painter Classic
Why we love it: A first-of-its-kind service assumes the burden for companies that are plagued by product-safety problems
Categories of success: Utility & Innovation

A product is recalled. The courts settle a class-action suit in the plaintiffs' favor. These are the times that try CEOs' souls.

Donald Kornblet can't save his customers from such unpleasantness, but he is using the Web to prevent the associated administrative headaches from turning into migraines. Kornblet founded Business Response Inc., a St. Louis­based customer-support, telemarketing, and business-services company, in 1986. Those innocuous-sounding "business services" are, in fact, critically important: Kornblet helps his customers notify their customers about product recalls, legal settlements, and corporate acquisitions.

"If the Food and Drug Administration or the Consumer Products Safety Commission determines that you have a product that is going to be recalled, you have to put together a notice program," explains Kornblet. Such programs, designed to alert affected consumers and let them register for recompense, generally include direct mail, point-of-sale announcements, and ads in traditional media. More recently, "government agencies have seen the value of expanding notice efforts to the Web," says Kornblet.

But processing claims for thousands of consumers who register on-line can be a labyrinthine task. Administrators must solve the nontrivial problem of moving customer-registration information into appropriate databases and other back-office systems. Then there's the whole poisoning-your-well factor: no company wants bad news living cheek-by-jowl with its marketing material. "They want to be able to separate their product-safety message from the product information that is the core of their site," Kornblet says.

So in February, BRI added the first-of-its-kind Internet Consumer Registration Center to its portfolio of claims-administration services. Consumers who are due to receive a settlement or who own a product under recall access their program information by typing in www.regcen.com followed by the name of the remediating company and then register for their program on-line. BRI processes the data and fulfills their claims by sending them checks or replacement products. More than 30 of Kornblet's customers -- large and midsize corporations in a variety of industries -- are using the service, which includes design of the on-line notification announcements. Customers pay BRI a setup fee of $1,500 to $2,000, plus between $5 and $10 for each consumer who registers through the site. (As of September, approximately 1,000 people had done so.) "We would hope that the Consumer Registration Center will generate annual billings of $750,000 to $1 million within two years," says Kornblet.

In addition to plumping up BRI's bottom line, the Internet Consumer Registration Center burnishes the company's star among the Washington lawyers who typically advise corporations embroiled in safety-related travails. "These lawyers are very sensitive to what government agencies want in respect to notice, and they see this type of offering as a plus," says Kornblet. "It speaks to our expertise in the field, and as a result the lawyers may be more likely to recommend us to their clients."

Company: Pinnacle Decision Systems Inc.
Revenues: $6 million
Web address: http://hq.pinndec.com/inc (employee site)
Site launch cost: $9,000
Current technology profile: Microsoft Windows NT, Microsoft SQL Server, Microsoft FrontPage, Microsoft Visual Interdev
Why we love it: This software company's staff site eases new employees in and lessens current workers' growing pains
Category of success: Utility

We've all had those first days on the job. No one knows where you're supposed to sit. You don't have a telephone extension. The HR department ran out of copies of the employee handbook last week. You're tempted to jump back into that revolving door before it stops moving.

No one has those kinds of days at Pinnacle Decision Systems, a 13-year-old consulting and software-development firm in Middletown, Conn. Before reporting for work, new hires receive a URL for the company's employee site, succinctly dubbed "HQ." In the comfort of their living rooms they can read up on policies and procedures to their hearts' content, study the company org chart, and even submit orders for their business cards, nameplates, and Pinnacle T-shirts. And if they're curious about their new colleagues, they can loiter for a few minutes in the virtual lounge, where employees swap personal news and recipes.

The HQ site is Pinnacle's way of easing the painful organizational stretch that comes with rapid expansion. The company's head count grew by about 40% in the past year, and more than half of the employees work at regional offices or client sites. "When we were small, people felt as though they working for Steve and John," says chief operating officer John T. Mulvaney, who founded Pinnacle with CEO Stephen R. Brown. "Now that we're larger, we've got different layers of management, and we've distributed the responsibilities. But a lot of people still want to feel like they're working for Steve and John, and they want to understand what's going on in other regions. That's what this Web site provides."

Although the HQ site functions like an intranet, employees access it over the Web. And they do so often: like all good intranets, HQ is the conduit through which most of Pinnacle's routine operations flow. All the company's forms -- from insurance applications to expense reports to procurement requests -- are on-line; employees fill out the forms and submit several of them over the site. That has reduced both the amount of paper Pinnacle gobbles and the number of picayune calls HR reps field. And, says Brown, now that HR folks are freed from many administrative tasks, they can concentrate on the important things, such as recruiting. The sales force, meanwhile, consults the site for Pinnacle's most recent marketing materials and an archive of responses to requests for proposals. And employees in all departments visit HQ to sign up for technical training sessions.

But information traffic at Pinnacle isn't one-way; Brown and Mulvaney also want to tap employees' creative powers. The founders are particularly interested in ideas for new products, an area of growing importance to the company, which in the past offered only consulting services. (Today about 20% of revenues derive from two software products -- a Y2K program and a golf improvement system -- that were created in-house.) Last spring Brown and Mulvaney added to the HQ site a brainstorming area that acts both as a reminder of the premium placed on new ideas and as a central repository for employee inspirations. "We've gotten 15 to 20 ideas from the on-line form, which is quite a lot," says director of information technology Stacey Kivel. "Before the Web, people wouldn't know where to go with their ideas: to Steve or John or marketing or myself. And I think that sometimes it's intimidating to call someone with an idea. You find yourself saying, 'Oh, never mind, this is silly.' When you're on-line, it feels anonymous, even though it's not."

The HQ site also makes it possible for Pinnacle's longtime open-book-management policy to work as well in practice as it does in theory. In the past, regional directors would try to review the company's numbers during monthly staff meetings. "But there's never enough time, and this isn't the easiest kind of information to digest in half an hour," says Brown. "Now we put it all on our site, and people can spend as long as they want on it. It's up-to-the-minute. And it's not just numbers: our vice-president of finance adds his own comments associated with those numbers. So employees get a kind of state-of-each-region: how well they're doing, whether they're hitting their goals or not."

All that utility notwithstanding, the site is not without its softer side. It announces birthdays, anniversaries, new hires, and new babies. There's a classified section for those anxious to unload (Tina Moroni is giving away her pool table) or to load (Kivel will gladly pay for a nice set of used golf clubs). A photo gallery offers the obligatory embarrassing snaps. Employees even vote on where to hold company outings, a welcome change from the days when headquarters declared August 18 Golf Day and that's that. "People used to feel left out if they worked at client sites or in another region," says Kivel. "Now everyone knows who's been hired, who's pregnant. We try to put in the latest gossip. Even if people don't see each other all the time -- maybe especially if they don't see each other all the time -- they love to know what's going on."

Company: ReloNetworks
Revenues: $150,000
Web address: www.relonetworks.com
Site launch cost: $5,000
Current technology profile: Microsoft Windows NT, O'Reilly WebSite Professional, Allaire ColdFusion, Inline iHTML, Adobe Photoshop, Adobe Illustrator, Microsoft Visual Basic Pro, Microsoft Access
Why we love it: Information-rich relocation site has helped this start-up close every one of its corporate sales
Category of success: Utility

It is a truth universally acknowledged that moving sucks; ergo, moving lots of people sucks exponentially. Brian Boettcher discovered that fact in the summer of 1998, when as a management trainee at mutual-fund company Franklin-Templeton he was asked to supervise the relocation of 200 employees from around the country as part of a grand expansion. Well, the expansion never happened, but in the process of preparing for it, Boettcher became a relocation expert, particularly adept at the urban survival skill of finding rentals.

In January, Boettcher launched ReloNetworks.com, a hand-holding, arrangement-making, bumpy-road-smoothing service for corporations reshuffling employees to the Bay Area. When movers-to-be fly into San Francisco, a ReloNetworks employee leaves her office in Mountain View, Calif., and meets them at the airport or hotel. She then spends a day squiring them around town, showing them pre-scouted rental properties, ushering them to appointments with school principals, and pointing out hospitals and supermarkets. After that initial tour, company representatives are reachable by phone to answer questions or otherwise help the transplants get situated.

In order to sell his services, Boettcher knew that he had to prove intimate knowledge of two things: the moving process and the Bay Area. Fortunately, he had amassed volumes of information on subjects like communities, attractions, and housing opportunities in the course of setting up Franklin-Templeton's vapor move and then ReloNetworks itself. And since ReloNetworks' services are so personalized, Boettcher determined it wouldn't cannibalize the business to give all that information away. "I figured that regardless of whether people used my services, I wanted to help them out," he says. It appears that he's helped a significant number: by July, ReloNetworks was drawing 8,000 visitors a month without advertising, aside from its sponsorship of the San Francisco Chamber of Commerce's weekly fax report and a briefly run ad in TechWeek.

But Boettcher didn't want people to visit his site solely to do research; he wanted them to visit it to do things. So in February he partnered with a company called Homefair.com, and together they offer an assortment of interactive relocation tools. Visitors can consult a salary calculator to determine how much they'll need to earn in San Francisco to maintain their standard of living (no surprise: a lot). They can use another calculator to estimate what it will cost to ship their lives across country or call up a timeline for orchestrating their move. They can even compare their current hometown's cost of living, crime rate, and general demographics with those of other cities, read school reports, and find out what kind and how much additional insurance they'll need to buy.

The tools, which Homefair.com offers to other sites but customizes for ReloNetworks, cost Boettcher only $100 a month. While that's a minute investment for so much functionality, even more advantageous is ReloNetworks' arrangement with the company TravelNow, on whose site visitors can make car, air, and hotel reservations. In that case, Boettcher collects 50% of the profits from every ReloNetworks-referred reservation. At press time TravelNow was just preparing to roll out domestic air reservations. "That is when I expect to begin seeing significant revenue from our affiliation," says Boettcher.

And ReloNetworks' site, which is maintained by a full-time Webmaster, grows ever bushier with information. The company recently launched an on-line bookstore with selections on Bay Area culture, schools, adventures, and single life. A members section boasts an extensive guide to merchants, an assortment of coupons from local establishments, and ReloNetworks' most valuable offering in this housing-hungry market -- a list of rental properties, updated weekly.

Seven months after launch, ReloNetworks had 25 major clients, many of them wooed and won by the breadth of Bay Area expertise displayed on the site. "We printed out the entire Web site and included color copies in all our presentations," says Boettcher. "The site has played a significant part in every single one of our closings." Although the site has generated no direct revenues beyond a couple of hundred dollars from travel reservations, Boettcher is mulling moneymaking options, such as spinning off the apartment-listing service into its own company. "I still look at everything as a service," he says. "But I know that as the number of visitors goes up, I'm going to have to start looking at the site as revenue."

You know the sort of person -- not especially smart or attractive or kind -- whom capricious fate nonetheless rewards with good fortune at every turn? If Chris Graff's Web site were a person, that's the sort of person it would be.

Graff is president of Pinnacle Building Systems Corp., a manufacturer of customized modular homes and the entrepreneur's 16th start-up. Unlike those who testify eloquently that the future of business is spelled "W-E-B," Graff admits that "for us having a site was more of a 'why not' kind of thing." He recalls the day shortly after the Bristol, Ind., company's launch in 1997 when "a couple of young local guys knocked on the door and said, 'We'll put together a Web site for you for $200.' It was a minimal investment. We figured, what can it hurt?"

That first site was neither a thing of beauty nor a joy forever. "It was real chintzy," says Graff. It consisted of a couple of line drawings, a mission statement, and a smattering of bullet points about the company. The idea was to throw up any old thing and just let it hang there while the sales force scared up business the usual way -- pounding the pavement and calling builders. Graff figured he could improve the site later. His expectations were nonexistent, so disappointment was impossible.

But a funny thing happened while Graff wasn't working on the Web: the Web was working for him. People who wanted modular homes and commercial builders were constantly being tossed up on the site by search engines. Those people bought Pinnacle's products: $2 million worth in the first year. "We thought we might get a deal or two off the site, or that a builder might find us," says Graff. "What it's achieved is beyond anyone's wildest expectations."

Last year Graff wisely decided to lavish more love -- and money -- on the site. So he spent the princely sum of $1,500 on an upgrade, adding photos and product specs and a bit more information about the company. "It's not that creative. But it's complete and current and easy to get around," he says.

Surfers apparently agree with that faint praise. In 1998, Pinnacle's sales from Internet leads rose to $5 million. And that's with little promotion, aside from including the URL in the company's traditional media ads and printing it on the plastic wrap that protects a house en route to its final resting place. "We spend $50,000 a year to advertise on radio and in trade publications and newspapers," says Graff. "We spent about $1,000 on the Web site, and it contributes many times more dollars to the top line."

Graff says Pinnacle's Web success has been more than a pleasant surprise: it's been salvation. "We're two and a half years into this, and we're within a few percentage points of being right where we projected we'd be saleswise," he says. "Our traditional methods of selling turned out to be far less effective than we had anticipated, so the Web made up for that shortfall. And if we hadn't made up for that shortfall, we would probably not have survived the start-up phase."

Lisa Thomas and Gary Erickson assume that most of their site visitors are already fans of Clif Bar the Product. Now they want those visitors to be fans of Clif Bar the Company, as well.

After all, the two have built a distinctly lovable business around their energy-packed snacks, complete with a warm-and-fuzzy birth legend. (The original recipe was inspired by Erickson's mom, and the company is named for his dad.) The Berkeley, Calif., company also has a dedication to social causes and a corporate culture that provides employees with in-house physical trainers and climbing walls. By conveying those virtues to their customers over the Web, the founders hope that athletes buying a Clif Bar will feel a personal connection with its maker -- much as the less nutritionally virtuous feel when they select a pint of Ben & Jerry's Cherry Garcia from the freezer case.

Clif Bar's owners have done everything possible to make their site down-home and welcoming. The result is a work of branding so effective that after just two minutes on the site a visitor who had never heard of Clif Bars could produce a list of flattering adjectives about the company, beginning with authentic. "As a consumer, I always wonder when I'm buying a product whether there's a real person behind it," says CEO Thomas. "On the site, people can see that the Clif Bar community is real; it's not concocted. And they can be a part of it."

And they apparently want to be part of it. The site doesn't sell product, and until recently Thomas and Erickson did nothing beyond including the URL on the bar's packaging to advertise it. (In September the company began buying banners on Garden.com.) Yet Clif Bar on-line receives a million hits a month, and 25 to 30 people a day submit anecdotes about their first encounter/continued love affair with the energy bar. These aren't mere "like your product -- keep up the good work" notes, either, but the kind of testimonial -- detailed and personal -- that writers of advertising copy kill for.

Thomas can't explain why people are so willing to open up -- after all, the forum areas on many company sites are as untouched as an Egyptian tomb. But she circulates almost every message to the entire company and makes sure at least one person responds. "Sometimes a story is so touching that a lot of people write back. A customer submits something to a Web site and then suddenly gets these messages from six or seven real people," she says. Correspondents include the participant in a Clif Bar­sponsored AIDS bicycle ride, who described the prospect of nutrition-bar-enhanced pit stops as the sole thing that kept him going through 330 miles of rough terrain; and a recent stomach-surgery patient, who rejoiced at finally finding a snack that he could eat after five months of sweetlessness.

The customer comments, almost all of which are displayed on the site, simply fall into the company's lap. But Webmistress Sarah Wallace works hard to corral the rest of the content. Wallace spends a good deal of her site-feeding time begging articles from nutrition experts, athletes, and the company's employees. While the experts' articles on such subjects as exercising at high altitudes are informative, it is the sweat-soaked tales of athletes' and employees' exploits that supply inspirational and emotional fodder. (One section of the site is devoted to the company's association with the Tanqueray AIDS Ride. Just try not to feel good about an organization that not only sponsors such an event but also provides every employee who participates with paid time off, transportation, and a personal trainer.) "Thematically, I see the Web site as being a Clif family album," says Wallace. "We tell the stories of our employees, the stories of our athletes. We give people all the elements that can't be described on the product itself because the package is too small."

Wallace is also behind the site's design -- an appealing blend of vibrant colors, unstudied photographs (Thomas and Erickson biking in the East Bay Hills), and animated grace notes. The Java-scripted rappelling rock climber, shimmying dancer, and Flash-animated speeding roadrunner that introduce the company's product pages are a rare display of technology's whimsical side.

That sense of whimsy extends to other elements, such as the wonderful "Build Your Dream Bar" contest that invites visitors to choose from menus of fruits, nuts, and spices to configure the energy bar that most floats their boats. Each quarter, Clif Bar employees vote on the best recipe; then company chefs whip up a batch and send it to the winner. A month after the feature went live in July, more than 100 people had submitted their own formulations. "We've had some very good ones," says Wallace. "Then we've also had some combinations like watermelon-buttermilk. I somehow don't think that one will win."

In the coming year, the company will expand its nutrition infomation and create more content in tandem with the social organizations it supports. (Each organization now gets a brief write-up and a link.) The founders will also begin selling Clif Bar promotional items -- hats, T-shirts, and the like. But although the company has the technical wherewithal to embark on a broader E-commerce strategy, selling its bars directly to consumers is not on the table. "We're certainly not ruling out the possibility, but we're naturally concerned about disenfranchising dealers," says Thomas. "And doing large-scale E-commerce would really change the kind of company we are. At this point in time it's enough that we're extending the cult of Clif outside the walls of Clif Bar."

Company: Advanced Radiant Technology LLC
Revenues: $300,000
Web address: www.advancedradiant.com
Site launch cost: $18,000
Current technology profile: Microsoft Windows NT, Live Picture PhotoVista, Macromedia Flash
Why we love it: A heating guru wins local customers and far-flung admirers by waxing eloquent on his art and craft
Categories of success: ROI & Local Site

Paul Pollets understands the power of appearing authoritative. His friend Richard Trethewey commands enormous authority as the heating and plumbing expert on the popular PBS series This Old House. When Trethewey discusses radiant heating on the show, as he does frequently, Pollets gets the chance to parade his own expertise; viewers who take to the Web seeking more information about these state-of-the-art systems often run across his company, Advanced Radiant Technology.

In radiant-heating systems, water circulating under the floor or behind wall panels radiates warmth into a room, heating it more evenly than traditional temperature-control systems. While radiant heat was no stranger to the homeowners of ancient Rome, it's still something of a head scratcher in the United States, where only 2% of the population use it. Customer education, therefore, is paramount, and here is where Advanced Radiant's unusually lucid site succeeds brilliantly: visitors come away understanding what radiant heating is, why they would want it, and why they should buy it from Pollets. That's no mean feat when you consider that the average Web site is written so abysmally that visitors wonder whether they need a different browser to read it in English.

"I know how to write," says Pollets, a pipe fitter by trade and an environmental designer by education. "And I have the advantage of working with a partner who is extremely well-versed in advertising and marketing. We locked ourselves in a house for two weeks, 60 hours a week, and we wrote that Web site."

That marathon session occurred in November 1997 while Pollets was launching his company. Having settled in Seattle, where software millionaires grow thick as Douglas firs, the CEO had assumed the Web would be critical to his business from day one. That was fine with Pollets, especially given the alternatives. "Traditionally, the yellow pages have had an iron grip on plumbing and heating contractors," Pollets says. "They charge you outrageous prices, and all you have to show for it is that you own a portion of a page and maybe get a few phone calls." Pollets still spends $15,000 a year on yellow pages ads, which net him about 40% of his business. By contrast, the Web site, which cost him $18,000 -- about a third of which is defrayed by suppliers -- brings in about 50%. (The other 10% comes from word of mouth.) "There's no doubt in my mind that the Internet is the single best way to get the message out about this company," says Pollets.

But Advanced Radiant's site isn't just winning customers; it's also deepening relationships with the company's suppliers, who typically have been slow boats to the Web. Hoping to raise his suppliers' profiles while defraying his own costs, Pollets has offered to build pages on his own site pumping manufacturers' products. "Initially, the manufacturers were hesitant; they were only familiar with yellow pages ads, radio, TV, and print," he says. "But with the success of the company and the traffic on the site, [boiler manufacturer] Viessmann stepped up to the plate and was willing to help pay co-op costs for an expanded Viessmann section." Now Pollets expects to wring even more income from those pages by letting noncompeting heating contractors use them on their own sites for a fee.

In the end, Pollets says that the best Web marketers will be those with the highest-quality products and the eloquence and skill to tell their stories well. "I have to use the Web site to beat on my chest and do it graciously and diplomatically," he says. "I can't be haughty. I can't be arrogant, because surely I'm the most expensive. The idea is to show off your workmanship, show off your craftsmanship, so that people come away saying, 'Of course I'll pay more. Look what I get!'"

Company: Atkinson-Baker Inc.
Revenues: $13 million
Web address: http://www.depo.com/
Site launch cost: $1,500
Current technology profile: Microsoft Windows NT, Microsoft Universal Data Access, Microsoft FrontPage, Sausage Software HotDog Professional
Why we love it: The industry's first-to-the-Web court-reporter scheduling service saves lawyers and employees time and trouble
Category of success: Utility

There are great business sites that serve their customers. There are great professional sites that serve their industry. Sheila Atkinson-Baker's site serves both.

Atkinson-Baker's clients are lawyers; her industry is court reporting. As most of us know, either firsthand or from watching David E. Kelley productions, not all testimony occurs in the courtroom. Often lawyers want to know prior to a trial what a witness is going to say. They need someone impartial to take notes and type up the transcript. That's when they call Atkinson-Baker. The 12-year-old Glendale, Calif., company sends its employees out to record the proceedings of thousands of depositions every year. The company's two biggest challenges are finding the best possible reporters and managing a tangle of schedules and logistics.

Both of those applications, of course, are ideal for the Web. But that wasn't obvious in 1995 when Atkinson-Baker launched the site. Moreover, she had made several earlier attempts to lead her legal clients to computers and found them unwilling to drink. A system that instantaneously translated a reporter's shorthand notes into English and transmitted them to a lawyer's laptop was slow to catch on. "Lawyers tend to be set in the way that they do things," she says.

But that didn't faze the CEO. Atkinson-Baker already possessed mountains of information -- such as the rules of discovery in different states -- that clients need when they reach the deposition stage. She didn't expect that many lawyers would be doing research on the Web, but among those who did, she knew she could establish a reputation for legal expertise and technological proficiency by making that information Web accessible.

She also hoped to attract competent reporters by becoming the everything-you-need-to-know resource for the whole profession. Forget the layout of a steno keyboard? Worrying about how much all that reporting equipment will cost? Atkinson-Baker's site would become the Rome to which all roads lead. The professional-development area has already paid off richly: in the past year alone the company has hired 30 court reporters who applied for work after consulting career information on the site.

And now that law firms are catching up with the rest of the corporate world, the company is rolling out some of the time- and labor-saving services its CEO started mulling four years ago. In January it launched a password-protected service that lets legal clients schedule court reporters, check calendars, and view invoices on-line.

In the next month or so customers will also be able to retrieve complete case data and transcripts, a big time-saver for both the customer and Atkinson-Baker.

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