Monday, April 10, 2006
Interview with Bernard Louvat, InQ
This morning, my interview is with Bernard Louvat. Bernard Louvat is CEO of Agoura Hills-based InQ (www.inq.com), and is a serial entrepreneur I've
spoken to before about his companies. InQ developing a service that helps
e-commerce operators close more sales and help ease the online purchase
process through online chat. I thought I'd catch up with Bernard and hear
about his latest firm.
Ben Kuo: What is InQ about?
Bernard Louvat: Basically we are a technology based service company providing turnkey online sales and marketing solutions to increase e-commerce revenues. We provide people on websites to sell product and services via instant messaging. We charge on cost per acquisition, not cost per lead, and offer a proven ROI solution to increase online revenue by more than 20 percent in the Fortune 500, in less than 30 days. Our services provide 20 to 1 revenue to acquisition cost, which is typically three times lower than the phone channel for our clients. Our solution has been has been adopted by industry leaders – including telcos, and companies such as Cendant and AOL. We focus on market segments that use sales people offline – retail, telecom, cable, financial services, travel, B2b, and healthcare.
BK: So you provide live people in a call center for your services?
BL: Our value proposition consists of three parts – a technology platform, which we bring to the table to manage the chat interaction, a hosted platform, and we operate a contact center with 55 reps in Los Angeles, that we train in cooperation with our clients on their products and services. We manage all the staffing and productivity. We also have a professional services group to work with design their online sales program. We are very metrics intensive and proactively launch our chat, and determine in real time on our web site a customer's behavior in a session or through previous data passed to us from our clients. For example, we may use business rules that are time-based – for example, if a customer is on a particular page for more than one or two minutes, we launch a chat, or if a customer had a predetermined traffic pattern on a site—for example, went from a specific page to another page, which will trigger a chat. Our information is collected via analytics software, and we help design business rules. We engage the customers by asking discovery questions, pitching services, and also bring them down to the order page. We walk them to the bottom of the funnel, and help them select products or services, or help them with a difficult sale. We've had terrific results from a conversaion standpoint, and have the capacity to increase online sales and increase the topline by twenty to twenty five percent. We have twenty clients, four of them Fortune 500, and the other are public companies. We also work with smaller online e-commerce sites that do around 20 to 25 million in online sales.
BK: It would seem this business is fairly labor intensive. How do you handle that?
BL: As we ramp up, where labor really scales is in the contact center. Our contact center is in LA, and in the next 3 months will open one up offshore. We will scale the labor offshore, while keeping on every client project a few reps in LA. The local representatives are key success factors for us is integration of our integration, management our contact center, and designing and optimizing campaigns. We're the only end to end solution that offers better execution than in-house solutions. We've competed against in-house execution using our live-chat license software, with vastly superior results.
BK: You've been at a few firms before InQ—I believe the last firm was Evolution Robotics. How'd you end up at InQ, and why did you join the firm?
BL: I was at Evolution Robotics, I worked with Bill Gross to start Evolution Robotics, which provides intelligent software solutions for the retail industry. There's a very strong team there now to develop that business, and I was looking at a business which was closer to my background in retail. Before technology, I started the Disney Store in France, and Office Depot in France, and for the last nine years in SoCal I worked in ecommerce at CitySearch and with my startup, BizBuyer. I found out about InQ by accident, as I knew the chairman, Dennis Cagan, who convinced me to look at the company. It also helps that InQ is seven minutes from home. I saw the opportunity to bring online the same types of sales interaction I had developed offline in my stores, where I was hiring and training sales people to approach consumers, pitch products/services/clothes with effectiveness. When you shop online, in product categories where you require some sales assistance –not commodity items like books and CDs--the abandonment in shopping carts is huge, because people get stuck. They spend time selecting a product or service and for some reason don't get over the finish line. We proactively and reactively engage those customers, helping them to buy, and increase performance. This has worked well in a number of verticals, and a number of clients from large to small.
BK: How is the company funded—who is backing the firm and where are you on funding?
BL: We're very bullish on the market. We're close to profitability, and want to accelerate our growth with a venture round of seven to ten million. Are two original VC funds are Hudson and Dolphin, and we want to bring in a Tier 1 California VC to lead the round. The round will provide growth capital to ramp the sales team and technology teams and there's lots we want to do on technology platform. Most of the websites out there that use sales people offline can use us on their website to increase their sales. We need the sales power to reach those websites. This will be our Series C, and will probably be our last round.
BK: You're a serial CEO, it seems like this is now your thing?
BL: Yes, I love it. Each time you do another startup you want more and more—how to make the next one successful, putting things together, building teams, and looking at new market opportunities. This one is a big one. The ROI is here and proven, ecommerce is still growing really fast, and e-commerce has bumped into a wall at the conversion level. This solution can unlock the next level of conversion and productivity.
BK: As someone who's done this several times, how do you make a company successful?
BL: I was reading your interview with Jim Armstrong last week—and have known Jim for years. In fact I was in his office two weeks ago pitching the deal. I liked his comment from his mentor at Austin—about investing in a idea early and way early. I've learned that the timing is the toughest thing to determine, particularly at the beginning. A business idea often makes lots of sense, but the toughest thing to figure out is if the market is ready now or not. I often encourage entrepreneurs to think hard about that. Talk to prospective clients and customers to see if this is something they want to buy now. The other thing is the simpler the idea, the better. An idea you can explain to someone if you are raising money or pitching for a sales, if it makes sense, is probably a good business idea. It's not if it takes time to explain, or is convoluted and complex. People have short attention spans, and are bombarded with companies to invest in or products to buy. Your business must resonate and make sense quickly with the buyer. Picking the right business idea for a opportunity is step 1. If it's too early or too convoluted, you are probably going to fail. If you are working on the right business concept, the next step is to put the right team together to execute right. The right team has two things: it's experienced, and has been around the block—and has learned a lot through success and failure. The need to have relevant business experience they can bring to bear and execute flawlessly. They can't just be just bright but have to learn the industry or learn the business, because in a startup you just don't have time to learn. They have to have done it before, and just execute flawlessly and rapidly, because time is always against in you in a VC startups, with money going out the door. You need to get results quickly, and get your next funding or show traction. Finally, be persistent in everything you do. As CEO you have to evangelize and really believe in it!
BK: Thanks, and good luck on your funding round
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