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Q & A FRANK J. FEITZ

Chairman Keeps ABI on Course in Stormy Industry

December 14, 1987

Frank J. Feitz began a recent interview in his Irvine office by taking two telephone calls. Somehow, the interruption seemed appropriate for a businessman who has spent more than 20 years in the telecommunications industry.

Feitz is chairman of ABI American Businessphones, a company that sells telephone systems to small and medium-size businesses. Feitz founded the company in 1982 and has led it on a fast-track expansion. The firm's annual sales have soared from $726,000 in 1982 to $27.1 million in the fiscal year ended June 30.

On Friday, ABI announced that it is being acquired with TIE/Communications, a Shelton, Conn., phone equipment manufacturer that has been the Irvine firm's principal supplier. Feitz will continue to head ABI, which will become a subsidiary of TIE.

The Irvine firm has been consistently profitable in a tough, rapidly changing industry littered with business failures. Its track record has landed it on several rankings published by national business magazines. In May, ABI placed 15th on Business Week's list of the best small companies in the nation. The firm ranked 44th on Inc. magazine's 1987 list of the 100 fastest-growing small public companies.

Feitz, 45, lives in Laguna Hills with his wife and five children. Before founding ABI, the native New Yorker was a consultant advising big companies about phone systems. In 1980, he wrote and published a book titled "Bum Connection," a critical look at the telephone industry. In three months, he sold 990 of the 1,000 copies he had printed--at $79 each. Feitz said the book inspired him to start his current company.

In a recent interview before the acquisition announcement, Feitz spoke with Times staff writer David Olmos about the telecommunications industry in an era of deregulation and how his company won national recognition. And in a follow-up interview last Friday, Feitz explained his decision to sell ABI to TIE. Q: Why did you decide to merge with TIE/Communications?

A: It will give us the ability, in my opinion, to really enhance our growth and have a company with strong resources to help us grow. This transaction will take three to four months to complete. At that time, we will be in a position both financially and internally to start growing again. I really look forward to that.

Q: You have often said that service is the key to success. What exactly do you mean by that?

A: Service starts before you ever make a sale. You have a sales representative who's knowledgeable and, hopefully, treats the client with respect, determines the client's needs and then designs the phone systems to meet that need. And the next step of service is to make sure that you process that order properly, making sure that the installers are well trained, that they're courteous and that the people who are going to train the user on the phone system are familiar with the equipment. You treat the client courteously.

In the old-fashioned business, the client was always right. And it's true.

Q: To what lengths have you gone to provide service to a particular customer?

A: I've completely replaced systems that the customer was unhappy with. We've had several clients who have had floods. We replaced their entire systems in under two hours.

A large major account, which I won't name because I don't want to embarrass them, bought a system from another vendor. They bought 62 telephones. At 9 a.m. on the day the system was supposed to be installed, the vendor didn't have the equipment to do the job. They called us up. By 5 p.m., they had a completely operating phone system. So whatever it takes to do the job, that's what we are going to do.

Q: Has American business forgotten what service is all about?

A: I think that people tend to talk about service but don't perform it. You go to an automobile dealership, and I'm not picking on that industry, but the person writing your order is normally not courteous. You bring your car in, it takes six days to repair it, and you go back to pick it up and find out that three of the repairs aren't done. And usually they won't tell you. You find out later it wasn't done. That's not good service.

I tell our clients we're in a long-term business. If you buy from me today, hopefully you'll be my customer for the next 20 or 30 years.

Q: As a consumer, how do you respond to bad service?

A: When I get bad service somewhere, I usually very nicely tell them that I'm unhappy. In some cases, I'll sit down and I'll write the president of the company to tell him that I had expectations about the product and about getting a certain level of quality service, but that I didn't receive it.

Q: Can you give an example?

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