Last Christmas, LeapFrog had what could be considered a good problem. The Emeryville, California, company had introduced a fast-selling product called LeapPad, an interactive book that helps children learn to read. The device sold so well through toy retailers that many stores ran out of stock. As a result, customers turned to the company's Web site to buy the product.
But that's where things went bad: Because the company had never planned to take orders via the Web, LeapFrog didn't add e-commerce and fulfillment capabilities to its Web site until only a few months before the Christmas rush. As a result, LeapFrog couldn't handle the onslaught of orders. "It was a runaway success," remembers Mike Wood, 47, founder and president of the 130-person firm. "The retailers kept running out of the product, and we weren't prepared for the orders we were receiving on our Web site."
Jim Marggraff, president of LeapFrog's online division, says the company had a pretty small in-house customer care center. "[That made it impossible] to fulfill orders and respond to queries at the level of service we're used to," he says. It also didn't help that LeapFrog's phone system crashed during that time.