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 ARTICLES IN THE PRESS


 Tape Measure. Video Distributor Puts Its Employees Before Anything Else
By Kari Lomanno
Inside Business - Hampton Roads
Monday June 9, 2003

Mario in the Tape Resources WarehouseWhen David Durovy, president of Tape Resources, discovered that some of his customer service representatives were having trouble with abusive clients, he took care of the problem in a way that reflected the company's core values.

He fired the customers.

"When you see one of the best girls in the industry crying after she gets off the phone you say, 'This isn't right,'" Durovy said. "That was kind of a bold step, but it set a precedent and it gave our people here the confidence that we really cared about how they were being treated."

The reps now have a referral list at their desks, and if they feel uncomfortable dealing with a customer they politely give the name and number of a competitor. It may cost the company a sale in the short run, but over the long haul the customer-firing policy has proved to be one more way the Virginia Beach audio and video distribution company sets itself apart from the competition.

Although it seems like a contradiction, putting employees before customers actually improves customer service, said Durovy, whose official title is "chief customer delightment officer." Workers who are happy with their jobs are more willing to deliver excellent service, which in turn makes for good business.

"The customers are secondary," said CEO Seph Barnard. "The employees have got to be number one because if they're happy, it will just flow."

Skeptics need only look at the company's track record to see evidence of the success of this philosophy. Last year, Tape Resources did just under $12 million in sales, up nearly 100 percent since 1998, when the company earned a spot on the Inc. 500 list of fastest-growing private companies in America. The company appeared on the list again in 1999.

Housed in a tiny office/warehouse on Baker Road, Tape Resources delivers over 2 million pieces of professional blank videotape and disks a year, shipping more than a ton of tape every day. Tape Resources has about 16,000 customers, from Fortune 500 firms to individuals with a camera. Some notable customers include the U.S. Senate, the Library of Congress, the White House, Sony, Eastman Kodak, Cox Communications, National Public Radio, PETA and Old Dominion University.

With such a prominent national presence and 500 to 700 new customers every month, one would think it would take more than just 17 employees to deliver excellent customer service.

Not when those employees are treated like family. The company break room features shelves and a refrigerator that are perpetually stocked with food and drinks. Each worker gets one "Duvet Day" each quarter, which allows them to take a free half-day off. When the company does well, workers get an extra month's pay each year. And bonuses are not just reserved for the sales staff - every employee, from warehouse workers to the accountant, gets a check when the company's sales increase. Last year, workers got five bonus checks, one of them worth 20 percent of their monthly pay.

The company did so well last year that it paid to send all of its employees and their families to Orlando for Thanksgiving.

"I don't know if you can go anywhere where the company takes you and your family [on vacation]," said Jennifer Wright, a customer service representative at Tape Resources. "We went to Sea World and got to swim with the dolphins at Discovery Cove."

Tape Resources goes above and beyond company benefits and bonuses. Sometimes it even helps with major family purchases. Wright and her husband were recently in the market for a house, and Durovy said his company was thinking about buying the house for them and selling it back to them at a better interest rate. In the end, the company gave Wright a special bonus to help with a down payment.

"I've seen people in tears on many occasions when they just say, 'This is an incredible company,'" Durovy said.

Barnard started Tape Resources in 1991 while he was working on his MBA at William and Mary. He was a partner in another video production company at the time, Features International, and he saw that the industry was going to change dramatically as computers allowed more people to produce films on their own. Tape Resources was created as "a hedge against the future," he said, but a year after it began Barnard decided he had had enough of the business world, sold his share of the company and left the country.

Six months later, Barnard got word that Features International planned to close Tape Resources, which was "bleeding money." Barnard had an attack of conscience and bought Tape Resources back for $500 and the cost of its debt.

"I didn't want to see somebody else killing off my baby, so we bought it back from them," he said.

Durovy, who had joined Tape Resources soon after it was launched, stayed on as sales manager while Barnard was gone. When Barnard returned, he gave Durovy 20 percent of the stock and the two men, along with Barnard's wife Dawn-Marie, worked to bring Tape Resources back to life.

They were successful. Over the next three years, sales quintupled to $2.8 million in 1996. By 1998, sales were up to $6.3 million. And things have continued to look up ever since. Even celebrities such as Bruce Springsteen, Bruce Hornsby, Chick Corea and Al Roker are customers.

"Everybody's a Spielberg these days, even Al," Barnard said.

Once a customer discovers Tape Resources, he becomes a customer for life. Rob Fleenor, director of audiovisual services at Norfolk Academy, has done business with Tape Resources for many years and said he won't buy from anyone else. He said he likes Tape Resources because he always gets the products he's looking for with no hassle.

"Why go anyplace else?" he said. The reps at Tape Resources are screened for their friendliness before hire. Rather than taking resumes from applicants, the company asks potential employees to call and leave a message about why they think they're the right person for the job. Only those who sound like they've just won the lottery will be called for an interview.

"That's what the customers are going to see, not a resume," Barnard said. Tape Resources is known for its guaranteed delivery philosophy, even when the company is not at fault. Once, a customer received the wrong order due to a miscommunication about the product, and Barnard and Durovy spent the next four hours trying to figure out how to get the package to the customer on a Saturday. "The shipping cost us more than the whole sale," Barnard said, "but you know he's not going to ever buy anywhere else again."Every shipment from Tape Resources comes with a complimentary bag of M&Ms, just one more detail customers have come to love. "I think most people just accept mediocre treatment because that's all there is," Barnard said. "I don't think we're that great, but the bar is sure low. We do what we expect everybody should be doing."

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 The Toughest Part of Managing Isn't Figuring Out What to Do. It's Knowing What to Ask!

An excerpt from HARD QUESTIONS, 1998 INC. 500 Magazine

Inc. 500Now that we're not a start-up, how do I promote teamwork?
When Seph Barnard decided to energize his sales staff last year, he created a familiar enough incentive: adding a commission to be calculated on top of the sales staff's salaries. But the step nearly destroyed esprit de corps at Barnard's company, Tape Resources Inc. (#426), which sells blank video tapes and audio tapes to businesses such as television stations and production companies. ‘"Cracks started to appear in morale," recalls Barnard. "There was resentment over it. Tensions appeared in the office that we'd never had before."

A surprised Barnard junked the system, which had sparked resentment throughout the business. Still, that experience spurred him to rethink his compensation strategy and ultimately to institute a new incentive system that has rewarded teamwork, not to mention pushed sales up to $4.7 million in 1997, about 70% above 1996 sales. Although Tape Resources sells a commodity.. most popular tapes, from manufacturers such as Sony, EMTEC, and Panasonic, carry price tags ranging from $10 to $25..., the company has never competed on price, relying instead on service such as a guaranteed in-stock program and speedy delivery. Half of its dozen employees are sales-people, who work the phones from the company's office in Virginia Beach, VA, filling orders from repeat customers as well as from new ones corralled from direct mail campaigns and trade magazine advertising.

The commission system that started in July 1997 caused problems on a number of levels. Salespeople who once cooperated with one another became reluctant to spend time away from the phones, helping out on other tasks. They didn't like it when a colleague serviced a customer they had helped earlier, thereby taking the commission. "People got territorial over it," observes Barnard. Meanwhile, employees in shipping and other areas, who were not included in the commission plan, simply felt left out.

The spark that caused Barnard to reconsider his compensation system was a three month period at the end of 1997 when the entire sales team worked together to win a sales contest sponsored by EMTEC. The award: a trip to Cancun. Having seen the entire sales staff rally around a common goal, Barnard resolved to spread the incentives for teamwork to the company's six other employees.

Barnard wanted an incentive program that worked in concert with the company's existing compensation formula, in which employees receive an extra month's pay at year's end if the company meets its financial targets. To be consistent, he added a monthly bonus, offering 10% extra pay if monthly sales are 20% above the previous year's level, 15% extra if sales are 30% higher, and 20% extra if sales are 40% higher.. Sales rose at least 20% in four out of the first six months of this year— meaning that employees got a 10% bonus.

With all employees participating in the bonus, the divisions among people and departments evaporated.. "We're all in this together," says David Durovy, the vice-president of sales, who points out that people in the shipping department who stay late to fulfill last minute orders deliver the kind of customer service that distinguishes the company from its competitors.. "In the shipping department, the orders they get out benefit them as well as the salespeople.."

Barnard now circulates a daily report on sales to every employee, enabling each one to see how he or she is doing relative to the same period a year earlier. "On a slow day," he reports, '"people will say, "We haven't gotten an order from these customers in a while... Why don't we call them?"'

An extra months pay plus monthly bonuses can be expensive, and super-star salespeople may fare better under a commission system... But Barnard believes that his company's system accomplishes its intended purpose: helping create teamwork and pushing sales and service to higher levels.. "It has provided me with tremendous peace of mind that the whole machine is working well," he adds.
- S.D.S.

Copyright 1998 INC. 500

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 Teamwork, Fun and National Recognition

Business & TechnologyBeach based tape and data media firm makes Inc.'s list of top 500 small companies. Melissa Gundel, Staff Writer- Virginian Pilot

Tape Resources, Inc. owner Seph Barnard believes in rewarding employees for their hard work. Those rewards come in many forms: bonuses, tuition reimbursement, child care benefits and a well stocked refrigerator with workers' favorite snacks. Now Barnard's Virginia Beach company has been rewarded by being named to Inc. magazine's top 500 list at No. 426. The magazine's annual ranking recognizes the nation's fastest growing private companies.

Tape Resources, a national distributor of professional blank video tape, audio tape and data media, was the only Hampton Roads company to make the grade. The company, located on Baker Road, sells Sony, Fuji, Maxell, Panasonic & EMTEC brand professional tape to TV stations, video production facilities and the government."It's a rather boring business, but it is gratifying," said Barnard, 42, who is originally from South Africa.

Tape Resources started out as a subsidiary of Features International, a television production company that Barnard and then partner Stan Jeter founded in 1986. The business was growing fast and Barnard wanted to spin off another business. "I started Tape Resources as a kind of subsidiary to hedge our bets for the future because of the great advances in technology," he recalled.

But by 1992, Barnard was getting burned out and he sold his stock. He married his current business partner, Dawn-Marie. But as hastily as he made his decision to leave, he wanted back in. Toward the end of the year, Features decided to close down Tape Resources. "It was just bleeding money at that point and was in the startup phase," Barnard said. "When I heard they were going to close it down, it was like the baby I had birthed and I couldn't bear to see it happening. So I bought it back from Features."

With his entrepreneurial spirit eating away at him, he tried to get things back on track with Tape Resources. "It was really slow going in the early days," he said. "I committed spending all of my time at the office and got a little aggressive on direct mail marketing." To help, he brought former commercial real estate guru David Durovy, now vice president of sales, on board. Durovy owns 20 percent of stock in the business, while Barnard and his wife own the other 80 percent.

Though there was a lot of rejection in the early days, Barnard strived to be different. He wanted his business to stand out. While seeking his executive master's degree in business administration at the College of William and Mary, Barnard was inspired by a Domino's Pizza spokesperson. "He talked about customer delightment, not customer satisfaction," Barnard said. "No one goes and has a meal and says at the end of the meal, "I'm satisfied." If you have a great meal, you are delighted. That made the lights go on for me." Instead of great customer service for the business, which does the majority of its business over the phone, Barnard decided on what he calls "outrageous service."

Customer delightment is the company's benchmark.
"When we teach people to answer the phone here, they are critiqued on it" said Durovy. "When they answer the phone, I say to them: 'Imagine the lottery or your boyfriend or husband is calling and you haven't seen them in six months, how would you feel?'" If that doesn't work, mirrors are set up in front of desks to get that smile across the employees' faces.

"We provide tape, but we also provide a loving, caring, sweet person who knows about the people we deal with,"
said Melanie Nelson, a sales representative. "We know what cars they (the customers} drive, where them children are going to college. They've really become part of our family."

The genuine friendliness has paid off. Though 80 percent of their business is small business, their larger accounts consist of Coastal Training Technologies, Metro Video and CBN. National accounts include Compaq, Gateway and Cox Cable. "I'm not surprised they are being nationally recognized," said Scott Wheeler, president of Metro Video Productions. "They are a very exceptional customer service organization and have helped us out many times with quick turn-around and real personal service." Sales have also fast forwarded each year. Sales in 1993 were $562,000 and sales for fiscal year 1997-98 was $5.7 million - criteria that helped them get their ranking. To make Inc.'s list, the companies must have been independent and privately held through 1997, had at least $200,000 in base year sales and showed a sales increase from 1996 to 1997. Companies must have generated sales revenue for at least six months in fiscal year l993.

"We just sneaked in. We really tried to keep a sustainable growth,"
said Barnard. "We weren't trying to grow fast. One of our guiding principles is we don't strive to be the biggest, but the most profitable." Barnard attributes the success to repeat customers and his team. "I'm proud of the team. No one person could have achieved this without the other," he said. "I have my strengths, yet it was a team effort and there was no way I could take the credit for it." But he believes in keeping his staff of 13 well compensated. "Co-workers are the No. 1 priority," he said. "If our team is cohesive and together, that would automatically flow into the customer service."

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 Virginia Beach Firm Lands on Inc. 500

INSIDE BUSINESS - November 1998

StaffTape Resources Inc., based in Virginia Beach, has been named one of the fastest-growing companies in the country by Inc. magazine, which recently released its annual ranking of the fastest growing 500. Tape Resources, which was number 426, is a national distributor of professional blank video tape, audio tape and data media. It sells Sony, Fuji, Maxell, Panasonic and EMTEC brand professional tape to TV stations, video production facilities, corporations and the government.

The company, which was founded in 1991, is the only Hampton Roads company included in Inc.'s listing. Its saIes for the fiscal year 1997-'98 were $5.7 million. In 1993, sales totaled $562,000.

One reason for the company's rapid growth, says its president Seph Barnard, is that "we put principles before profits." The staff of 13 tries not only to satisfy customers but to delight them with what Barnard calls "outrageous" service.

Employee satisfaction is also a goal. Said Barnard "We're not in business to have fun but that doesn't mean we can't have fun in business."

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