In an era when virtually every company touts its devotion to putting customers first, David MacDonald says he can't think of a more ironic situation than that "so many of them actually use technology to create distance between themselves and their customers."

The president of Softchoice - a Canadian success story with a lower profile than its achievements merit - is talking about the maddeningly oxymoronic greeting "Please hold, your call is very important to us," and the often- fruitless punching of successive numbers in what seems like an electronic wilderness.

No one knows how many business people and would-be customers are stymied by this technology every day. But the average amount of time being spent on hold was partially quantified in a recent CNN survey.

For senior executives in the United States, it's 17 minutes per workday, or well over 70 hours a year.

Brennan O'Connor, Business Edge
Softchoice president David MacDonald says he expects gross revenue will hit $1 billion this year.

Not so at Softchoice, a Toronto-headquartered supplier of computer software and hardware. "While everybody else was saying everything should be on the web," MacDonald says, "we built a model based on one-to-one intimacy with customers."

Execution of that model begins with every phone call being answered by a human being, usually before the second ring. And if all the sales reps are busy, an overhead bell automatically alerts other personnel, including top managers, to grab the phone.

That may sound like a ruinously expensive practice compared with having robotic voices handle calls. MacDonald says it's anything but.

"Our expense-to-revenue ratio is lower than that of all our competitors. And that intimacy in the time we spend one-on-one with customers, on the phone and in person, often results in us getting a larger share of their IT spend. So, we think the extra expense is actually a wise investment," MacDonald says.

Softchoice's strategy is literally right on the money, says Brendan Calder, effective executive in residence and adjunct professor of strategic management at the University of Toronto's Joseph L. Rotman School of Management.

"Back in the '80s, people came up with the term 'high technology/high touch' as a competitive edge. But then everybody forgot about the high-touch part," he says. "I used to run call centres, so I'd say Softchoice's (live-response policy) is a real winner."

It must be. Since its founding in Toronto in 1989, Softchoice has catapulted to cross-border success in the $300-$400 billion US North American computer industry, expanding to 35 call centres in Canada and the United States and about 500 employees.

MacDonald - who spent 18 years as a computer executive, finishing up in Rochester, N.Y., running Xerox's North American outsourcing operations before taking the president's post at Softchoice in 2000 - says the company is Canada's top business-to-business supplier of Microsoft products.

Its domestic customers include Rogers Communications, TD-Canada Trust and the Bank of Montreal, while U.S. customers range from the giant Nordstrom department store chain to the Internal Revenue Service.

Softchoice's average annual growth over the past five years is an enviable 28 per cent and MacDonald says the annual gross revenue of the company, which has been publicly traded since 2002, is projected to hit $1 billion this year.

(Revenue in 2004 was $630 million, up from $548 million in 2003, while net earnings were $12.8 million in 2004 compared to $3.5 million in 2003.)

Ipsos-Reid Canada named Softchoice 2004 Call Centre of the Year, noting "on average, customers rated their experience with Softchoice anywhere from 12 to 32 per cent higher than other participating organizations, including major retail and financial institutions."

What MacDonald calls his company's counter-intuitive business model doesn't end at having people answer the phone.

If callers occasionally hear a dog or two barking in the background, that's just part of the employee-friendly culture that's been in place since co-founder David Holgate first began bringing his springer spaniel to work in 1989.

Holgate has since left the company. But its other co-founder, Jone Panavas - now Softchoice's vice-president of people says: "Back then, we were pioneers because it was still pre-Internet and no one supplier was dominating the field. So it was really difficult for people to find information about what software to buy."

Spotting an unfilled niche, she says the two partners "spent two years, plus a lot of money and effort, devising and implementing the pretty sophisticated systems that are still the same ones we use today. I remember David saying that if we built the infrastructure correctly, it would last forever."

Only time will tell if Holgate's prediction turns out to be accurate. But for the ensuing 16 years, MacDonald says the infrastructure has been ticking along very well, as has the internal culture Holgate and Panavas dreamed up.

"We like to say that we don't manufacture products, we manufacture customer experiences. And the enhanced environment we maintain for our employees pays off in creating tremendous customer experiences," he says.

The most eyebrow-raising aspect of that environment is the Friday afternoon refreshment cart that rolls through the Toronto office, which is located in an open-concept warehouse environment in the Liberty Village business district near King and Dufferin streets. On the cart are not only soft drinks and juices, but pretzels and beer.

At many businesses, MacDonald says, "employees run out the door on Friday afternoon to go have a beer, not necessarily together. We like to keep everybody relaxing together. It's a great opportunity for us to say thanks for their hard work."

A special thanks - not to mention "going down in our company folklore" - went to an employee about five months ago, MacDonald says. The sales rep "answered the phone, found out it was a wrong number, but managed to turn it into a $10,000 sale."

That calibre of nimble resourcefulness, together with management's strategic acumen, have propelled Softchoice's fortunes along at quite a clip.

In 1995, it began expanding throughout the United States and MacDonald says its 22 centres there now account for about 60 per cent of overall revenue.

In 2002, Softchoice began selling not just computer software but hardware as well, a business segment that now accounts for about $200 million annually. That same year, the company got its corporate foot in the door of the U.S. federal government market by buying U.S. counterpart Beyond.com. With that acquisition came the IRS account, which encompasses a whopping 110,000 computers.

There was a milestone this year when Softchoice bought 3-SOFT, Quebec's largest corporate reseller of software. "That brought us up to a 30-per-cent share (of the IT industry) across Canada," MacDonald says.

Along the way, Softchoice has managed to keep customers, such as Scott Wilson, manager of IT procurement in the Oakville office of international engineering project management company AMEC, happy to keep coming back.

"I do all the purchasing for our 16 Canadian offices, which covers about 3,200 computers, and we switched to Softchoice about three years ago," Wilson says. "They are unlike any other vendor I've dealt with. Most will tell you anything you want to hear and do everything you ask for the first six months.

"I've got three words to describe their (Softchoice's) service: Above and beyond," he says.

That level of satisfaction is precisely why Softchoice is doing so well, MacDonald says. "We are passionate about customer service and we use technology not to keep customers at arm's length but to bring them closer."

(Terry Poulton can be reached at poulton@businessedge.ca)