Connecting to customers still drives success

Growth companies in the late 1990s often were as much about riding the dot.com wave as anything else, leveraging technology to make hard assets and intense customer interaction obsolete. But two decidedly old-economy enterprises were among Providence Business News’ Fastest-Growing Companies Top List in 1998.
Newport Harbor Corp. and Collette Travel Group (now Collette Vacations) were 19th and 25th that year, with growth rates of 62 percent and 52 percent, respectively. Both companies are still going strong in 2008, with revenue of $42 million (versus $10.7 million in 1998) for Newport Harbor and $175.9 million (versus $100 million) for Collette.
The secret to their success? Both companies tend to follow the mantra of “make it simple and make it work.”
They deliver products and services that are the result of intensive research and development and they tend to customer service. They succeed by hiring the best employees and then giving them the responsibility and freedom that encourages creativity. And sometimes it helps for the entire enterprise to have a little skin in the game, either through family or employee ownership (or both).
The paths they are following conform to a growing body of thinking in business circles captured by the 2006 book, “small is the new big.” The Seth Godin work extols the virtues of breaking down business units at large companies into small, nimble teams, positioning them to unlock greater creativity, and in the process meeting the needs of customers more quickly and completely. And while Newport Harbor and Collette are not large multinationals, they empower employees at every level with decision making that results in products and services that anticipate and then deliver on customer needs at a very high level.
Both companies are in the hospitality industries, in other words, they are high-touch businesses. They deliver products – food, wine and vacations that are experiences to be savored. And the best way they can prosper is by making sure that every customer has a good enough time to go back and tell his friends about it. As is evidenced by their continuing success, these two companies understand this concept.
Newport Harbor Corp.’s Rhode Island waterfront roots stretch back to the 1920s. The business began as a barge company, transporting oil and coal. Today, the company retains its water ties. Its first foray into the hospitality field, in the 1980s, was with The Mooring Seafood Kitchen & Bar. And right next door the company opened the Newport Yachting Center. The company has branched out from there, covering all of Rhode Island, from Newport, to Tiverton, to Providence to now South County. Included among its properties is the Castle Hill Inn & Resort, 22 Bowen’s Wine Bar & Grille and Blackstone Caterers. And yes, it is still operating The Mooring and the yachting center.
Its Newport Exhibition Group puts on events that range from Octoberfest to the Taste of Rhode Island, as well as the Newport International Boat Show, the Newport Spring Boat Show and the Providence Boat Show.
The company is 60-percent family owned and has a seasonal work force of 1,200 employees.
When asked how Newport Harbor has grown and held that growth, President Paul O’Reilly said, “By hiring the best people that we can. And by trying with all our resources to understand what the public wants.”
Newport Harbor focuses its energy on local markets. The 18 senior managers know what Rhode Islanders want, both during the summer season and the winter. “We have a good sense of what people want in different parts of the state,” said O’Reilly.
As for employees – they own 40 percent of the company.
“The company is built on the success of each employee, from cooks and bartenders to upper management,” said O’Reilly. “We all have the incentive to succeed. Because of the employee ownership we feel that creativity in the workplace is increased.”
This ownership is called an ESOP, or employee stock-ownership plan. “So we have both employee ownership and an outside board of directors. We are very corporately run – profits and margins, financial planning, but we also retain the closeness of a family.”
The business plan of creativity and employee incentive coupled with full attention and knowledge of what it is the business is trying to sell cannot be emphasized too firmly. Some companies get it. But many don’t. Longevity helps establish a reputation, and with it brand loyalty. But in the this kind of business, the quality needs to be there every day.
Newport Harbor’s newest restaurant, Trio, is in Narragansett. The spot already attracts locals and non-locals with its seafood, but also draws them with a décor highlighted by murals of the rocky Narragansett shoreline and the town beach painted on its walls. You get the idea when you walk in that someone knew what the customer would enjoy.
At Collette Vacations, the focus is on designing and marketing tour packages.
“We try to sell a fun experience – that’s our approach and has been for many years,” said John Galvin, chief financial officer.
Collette works a niche market, namely the baby boomers that are looking to go away for a vacation – the United Kingdom, Australia, Canada and the United States. In the U.S. there are about 71 million baby boomers. “That’s our dominant market, the 50-plus crowd,” Galvin said.
Collette Vacations has been a family-owned company since the early 1960s. Family values still run deep, three generations in. “My father is the president,” said Nicole Sullivan, supervisor of communications. “My sister works in Australia for Collette. She puts together new products, new tours.”
“This creating of tours from the ground up is something we feel very strongly about. There are full-time employees, over 100 of them, tasting food at restaurants, staying at hotels – making sure everything is right before you even get there. It’s in our employees’ best interests to make sure your experience is the best it can be.
“The company’s been growing. We have no debt and solid demographics. Sure, today’s economy has slowed us some,” said Galvin. “We live here at Collette under a discretionary income. This year our profit margins have thinned. Fuel and the cost of energy – we can’t pass on the surcharges to the client. Just last year we recorded the highest revenue in the company’s history. But even so this year, we’re more than surviving. We’ve been around a long time. Our name is recognized.”
As successful as Collette is, however, it continues to push out new products. “We are working with the Smithsonian, putting together educational packages,” Galvin said. “We have 19 different tours, called Smithsonian Journeys. These apply well to a younger clientele. These tours have a significant educational component.”
To stay at the top, management at Collette Vacations works to maintain personal connections to employees. “My father takes a real interest in the people who work here,” says Sullivan. “He cares about them, what they do both at work but also at home. We do things together – picnics and environmental cleanups. We’re big believers at Collette of giving something back.”
And that spirit of giving back comes back around with a loyal customer base and increased business. •