By Ann Meyer
If you think the growth of the Internet and text messaging have wiped out the need for phone calls, think again.
One of the fastest-growing small businesses in the nation routes more than 15 million minutes of phone calls in a typical month, and it’s not in the traditional phone business.
Chicago-based Ifbyphone is CEO Irv Shapiro’s second company to be named to the Inc. 500 list of fast-growing businesses, with his first startup, system integration consulting firm Metamor Technologies, achieving a rank of 389 in 1995. That company grew from $100,000 in annual sales in 1985 to about $32 million when it was sold to Houston-based Corestaff in 1997.
Shapiro has taken a similar approach to filling a gap in the marketplace with Ifbyphone, which provides a voice-based phone management and marketing automation platform for small and midsize companies. And Ifbyphone is on a similar trajectory, achieving annual revenue of $7.7 million in 2011, up from about $500,000 in 2008. Twenty-one Chicago-area companies were named to the 2012 Inc. 500 list, and dozens more made the Inc. 5000 list.
By assigning different phone numbers to specific marketing offers for about $2 each, Ifbyphone can help companies identify where they’re generating the most interest so they can zero in on the most effective marketing opportunities. It also tracks which keywords customers entered to find the client company, and by detecting where customers are calling from, it can route callers to a business’s appropriate location.
Suite of services
“That’s the tip of the iceberg,” Shapiro said, noting that the company helps its customers manage, measure and automate phone calls. It has rolled up a suite of offerings so its customers don’t have to look elsewhere for one component or another. “We’ll automatically call customers to remind them of deliveries, or tell them to renew their subscription or survey them on quality,” he said.
By offering a suite of services, Ifbyphone is blowing by its single-minded competitors, of which there are more than 100, Shapiro said. Many competing providers offer one service, such as call tracking, call forwarding or delivery notification. Less than a handful offer multiple services. “Part of the reason we’ve grown so fast is we’ve taken the Microsoft Office suite approach” to offering every managed phone service a business needs.
The company, ranked as the 249th fastest-growing company, achieved 1,442 percent sales growth during the past three years and a sales increase of 770 percent in 2011, according to Inc.com. More than 3,500 companies use the company’s services, paying from $50 to more than $10,000 per month, he said. But Shapiro sees even faster growth ahead.
Profits still to come
The 70-employee company, which has raised $17 million in two rounds of venture capital, isn’t yet profitable because it has been re-investing by hiring more sales representatives, Shapiro said. “Right now our investors want us to focus on the top line because we have such a high gross margin,” he said.
Shapiro stumbled upon the unmet need in the marketplace that led to Ifbyphone in 2005 when he was shopping online for a high-end digital camera and couldn’t believe the camera retailer’s website didn’t show a phone number. “I couldn’t figure out why someone selling products for thousands of dollars wouldn’t make it easy to call,” he said.
So Shapiro, who studied computer science at Washington University in the 1970s, began evaluating available technology for small and midsize companies to handle phone calls efficiently. While high-end technology was available, it was too costly for many businesses.
A market opportunity
“There was a market opportunity to build technology to allow midsize companies to handle customer interactions over the telephone as well as the best companies do it,” Shapiro says. “What we’re basically doing is applying Internet technology to telephone technology.”
It took about two and a half years to develop the technology and begin selling it. The service works on any phone as well as Skype, Shapiro said. While most customers learned of Ifbyphone from Internet searches, increasingly the company is gaining referral business. Shapiro’s target is to double the company’s size in the next year, assuming it can hire enough qualified people. The company recruits what Shapiro calls “SWANs,” who are smart, hard-working, ambitious and nice.
Landing a spot on the Inc. 500 should make it easier to find people, he said. “If we can hire the best people, we will build a great company.”