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i5 Technology: Glen Ansell

A young entrepreneur grows a global company that started out as a work-from-home deploying Microsoft CRM solutions.

Juliet Pitman

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Glen Ansell of i5 Technology

How do you turn yourself from a one-man business run from a home office into a multinational concern with a R70 million turnover in four years – without any capital injection? Glen Ansell knows how. The founder of i5 Technology has achieved something truly remarkable with the company, but he’s the first person to point out that it took diligence
and perseverance.

A busy year
With a BCom degree in logistical management under his belt, Ansell left South Africa after studying to seek his fortune in the United Kingdom, but quickly returned. “I come from a very entrepreneurial family and have always wanted to own my own business, so I used some experience I had gained in training in the UK and started doing training in Microsoft CRM products,” he says.

Starting off working from home, Ansell quickly gained a reputation and started to build up a client base. After two months he hired his first person into the business and after three months working from home, sub-let office space from another IT company. It was a busy year, and one in which i5 became a Microsoft partner and then shortly afterwards gained Microsoft Gold Certified Partner status – the highest certification a partner can achieve from Microsoft. Microsoft has been instrumental in i5’s success. “I don’t mind saying that without Microsoft, things would have been a lot harder,” says Ansell, “They have been exceptionally supportive of us over the years.”

Evolution
i5 specialises in providing business intelligence and customer relationship solutions based on the Microsoft platform. However, as Ansell points out, the focus has shifted and the offering diversified as the company has grown. “We started off doing CRM systems – support, marketing, sales and service – but over time we slowly added various different components to our offering that makes us more of a solutions-delivery business than a deliverer of products. So in the past where we might have provided a company with a software system like a CRM tool, today we will deploy holistic solutions that comprise multiple products.” As Ansell explains, today the company ensures that, in delivering such solutions to clients, each technological intervention is assessed from the five key perspectives of strategy, people, skills, systems, and infrastructure. Its primary competence lies in Microsoft Dynamics CRM and Information Worker, while its specialisation in customised CRM, intranets, portals and call centres has secured it prime position in the market as a niche specialist.

Position perfect
Looking back, Ansell says his biggest challenges lay in building a reputation as a credible service provider to big business. “At the end of the day, it all came down to the correct positioning to make ourselves appear less risky to larger organisations. So instead of positioning products, we positioned ourselves as thought leaders in this space, as business consultants and architects who could affect a business’s bottom line,” he says. Landing big name clients sometimes meant doing things on a risk-reward basis, something that the company is not afraid of doing even today. “This has worked particularly well for us and if anything we are moving towards doing more, not less, of this type of work. This is simply because we believe so strongly that what we do can make a tangible difference to a customer’s bottom-line,” he adds.

Attracting talent and developing skills
Reputation and positioning also played an important role in helping Ansell to attract top talent, no small task in an ICT sector experiencing a critical skills shortage. “Being a small, relatively unknown business makes it a real challenge to attract the kind of talent that is so critical to helping the business grow as I wanted it to. But one of our strengths has been that we really try to grow people rapidly from the inside and in this we’ve been particularly successful.”

He agrees that getting around the ICT skills shortage is not easy but it’s a challenge he tackled with characteristic innovation. “For a small company, recruitment fees are just not viable and the process is too time-consuming and ineffective. So we started our own recruitment company, of which we own 49%,” he says. The company also accessed graduates through Microsoft’s Graduate Development Programme and today has developed its own training course for graduates that combines experiential learning with formal training. “In this way, we skill people from the bottom up. From the top down, we are starting to send a lot of our managers to training and advancement programmes.” These skills development interventions have played a central role in the company’s success.

Rapid growth
Success has come with rapid growth. The company has consistently doubled revenues every year, and its staff complement has grown to more than 50 people in four years. “We’ve had to move premises on average every two years, just to accommodate our rapid growth,” says Ansell. In 2006, the company formed Rezonance. “In deploying Microsoft CRM solutions for customers, we realised that a lot of companies had the same requests for additional functionality and each time, we’d develop these additional things from scratch. It didn’t take long to realise that there was a gap there to enhance the Microsoft CRM solutions to meet client’s particular needs,” he explains. The company also acquired Fusion Factory, which propelled it into the Enterprise Resource Planning (ERP) space.

Ansell explains the thinking behind the acquisition, “Fusion Factory was very similar to our business but they were also involved in ERP, which was an area we wanted to get into. So acquiring them gave us access to strong, seasoned and experienced individuals in that space who had the resources and skills we needed to break into ERP. Its not an area where you can simply send people on a course to become specialists. CRM and ERP are very complementary so it was a move that made sense to us.” i5’s expansion continued into 2007 with another acquisition, this time of web design studio, Chameleon Technologies which, on being acquired by i5 was renamed BlackLight. The company brought a digital media and graphic design competency to i5, allowing it to deliver the most advanced visual aspects of the new internet in addition to its existing back-office functions.

Beyond SA’s borders
2007 was also the year that i5 took its first step towards becoming a multinational company, expanding beyond South Africa’s borders with the establishment of i5 WECA (West, East and Central Africa). “This has afforded us fantastic growth opportunities. We’ve deployed one of the largest Microsoft CRM deals on the continent in Nigeria and have done work in Kenya, Ghana, Togo and Malawi,” says Ansell. He explains how pleasantly surprised he was by what he found in these markets.

“We had no idea what it would be like – you don’t typically think of many African countries as having significant IT capabilities. But what we realised is that there is a booming market there that many South African companies are simply not leveraging enough.” The company has undertaken projects in the financial sector for major banks. “For Eco Bank we’ve just deployed a CRM solution over seven countries,” explains Ansell. “The demand is there for our skills but they just don’t have the supply. The business potential is huge.” The experience has proved to be an invaluable learning curve and one that set the stage for expansion into other countries beyond the African continent. “It really raised the level of our game, giving us the potential to be a true global player.”

Going global
After the African expansion and given Ansell’s ambition, it was almost inevitable that i5 would set its sights beyond Africa’s shores. At the end of 2007, the company opened offices in New Zealand. “This is part of a plan to develop a footprint in the Pacific Rim and this year, in 2008, we plan to open in Australia as well,” says Ansell. Research visits to these countries revealed an untapped market for enterprise-ready solutions based on Microsoft’s technology. He adds that the boom in South Africa in CRM and Business Intelligence (BI) development has put the country in a world leadership position in these solutions. “We believe there is probably ten times the potential market we have in South Africa and we’ll be applying our experience in CRM and BI in New Zealand and Australia,” he says.

Targeting new markets
In spite of global expansion, i5 hasn’t taken its eye off the local ball and in March 2008 launched hosting business, Virtual Box. “This is my stretch project and also my vision of the future of IT,” explains Ansell, describing what he calls ‘utility computing’. “Businesses are coming to realise that they don’t need to have their own IT division, and that they can stop trying to become IT businesses and rather focus on their core business. Instead of having IT as part of the business, they buy it as an enabler. We host the IT here at our offices where we have built in redundancy, UPS and generators. Businesses connect to us which means they don’t have to worry about IT. We manage it all in the background for them directly from our premises,” he outlines.

Taking on new roles
Perhaps one of the critical success factors of i5 is that Ansell has grown with the company and from this year, he’ll be taking on a new role as CEO of the i5 Group, handing over the MD position of i5 South Africa. “My strengths are around the building and creation of things and what i5 South Africa now needs is a strong operational and standardisation person. I want to focus on driving business growth and development, expansion, mergers and acquisitions,” he explains. He looks forward to exciting things on the horizon.

Help from mentors
“I have been incredibly lucky to have had some amazing mentors in my career and because of them, I didn’t have to bump my head so often,” says Glen Ansell. His advice to all entrepreneurs is to learn from others more experienced in business than yourself. He lists the following as organisations that have helped him on the road to success:

  1. South African Chapter of Entrepreneur’s Organisation: They have provided me with my own private board of directors with whom I can share the pains and challenges of the business and off whom I can bounce ideas. Being able to share various experiences makes you realise that you are not on your own and that your problems are not as unique as you think they are.
  2. Endeavor: This Ngo has provided me with tremendous entrepreneurial support, connecting me to relationships and networks of some of the greatest business minds across the world. They have provided me with business advice, and investment and market opportunities.
  3. Microsoft: Being a Microsoft partner has meant so much to i5. They helped us tremendously in the first two years to build the business by creating leads and opportunities.

Ansell’s advice for success in business

  1. Be open to the advice and information that more experienced people can offer. Don’t think you know everything.
  2. You don’t have to make a mistake to learn from one.
  3. Delegate – it’s vital if you want to grow.
  4. Invest in the development of your staff – great people make a great and successful business. 
  5. In business there are obstacles every day. Tackle them with diligence and perseverance.

Timeline

  • April 2004: Glen Ansell starts i5 as a Microsoft CRM product trainer. Works out of home
  • June 2004: Hires first employee
  • July 2004: Moves into sub-let office space
  • 2004: Becomes a Microsoft partner
  • 2004: Gains Microsoft Gold Certified Partner status – the highest certification a partner can achieve from Microsoft
  • 2004 turnover: R600 000
  • 2005: Company employs 12 people
  • 2005: Sub-lets larger premises
  • 2005 turnover: R4 million
  • 2006: Rents full-floor premises in Bryanston. Wins Microsoft Dynamics Partner of the year, Microsoft Information Worker Partner of the year and the Microsoft Winning Customer awards. Establishes Rezonance Software and acquires Fusion Factory
  • 2006 turnover: R22 million
  • 2007: Wins Microsoft Independent Software vendor of the year award
  • July 2007: Acquires CT Digital and forms BlackLight, graphic design and media company. Establishes i5 WECA (West, East and Central Africa)
  • December 2007: Moves into current premises and i5 New Zealand is launched
  • 2007: Turnover exceeds R35 million
  • February 2008: Glen Ansell joins global Endeavor network
  • March 2008: Launches Virtual Box, hosting service
  • The Future: 2008 projected turnover: R70 million

Juliet Pitman is a features writer at Entrepreneur Magazine.

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Case Studies

Starbucks Coffee Is All About Culture… For A Reason

CEO Howard Schultz reveals how Starbucks does it.

GG van Rooyen

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Howard-Schultz

Vital Stats

  • Player: Howard Schultz
  • Company: Starbucks
  • Market cap: $85 bn
  • Established: 1971 (Schultz purchased the brand in 1987)
  • Website: starbucks.com

When Howard Schultz was raising money for his first coffee shop called Il Giornale (later to be renamed Starbucks) he was finding it hard to land investors. The reason was simple: Schultz was trying to create a coffee culture where none existed.

The idea that the man on the street would pay a premium price for a cup of Italian coffee with a name he couldn’t pronounce seemed nothing short of preposterous. But that wasn’t the only reason people weren’t willing to buy into his idea. Schultz, you see, refused to talk like a proper capitalist. He kept emphasising the fact that he wanted ‘to do good’.

Related: How tashas Built A Recession Proof Business

Schultz recounted the trouble he had finding investors during a recent visit to South Africa for the local launch of Starbucks. He spoke at a Q&A session hosted by the Wits Business School.

“My wife was eight months pregnant at the time,” says Schultz. “Her father actually sat me down and said: ‘My daughter is pregnant, and she’s working. You have a hobby. You need to get a job.”’

But, as is so typical of entrepreneurs, Schultz persevered and eventually got the funding he needed.

“The first time someone gave me $100 000, I couldn’t believe it,” he recalls.

Since those early days (the shop opened in the mid-1980s), Starbucks has grown rather prodigiously. Consider the following: By the late 1980s there were 11 Starbucks stores that employed about 100 people. A few years later, in 1992, the company went public with a market cap of $270 million. Today, it has around 24 000 stores in more than 70 countries. And its market cap? A cool $85 billion.

While growth is good, it has a tendency to birth a ravenous monster that is impossible to satiate.

“We have to add $2,5 billion in revenue every year for the next five years just to maintain our current growth rate and satisfy Wall Street,” says Schultz. “And to do this, we will need to add 80 000 employees over the next 12 months. Essentially, we’re launching a new massive company every year.”

Yet, despite this, Starbucks manages to maintain its unique culture. Just as when Starbucks was a far smaller operation, it is known for stores manned by high-energy individuals who have a clear love for the brand. How has the brand managed this? Schultz attributes it to the following seven core principles.

Starbucks-franchise-south-africa

1. Partners not employees

Howard Schultz’s father worked as a truck driver, delivering and picking up cloth diapers in the days before Pampers. When he slipped and seriously injured himself, he was summarily retrenched. Schultz wanted to create a very different company.

One of the reasons he didn’t adopt a franchise model was that he wanted to be able to offer each employee at least some stake in Starbucks.

When the company went public, each employee became entitled to a portion of their annual salary in the form of stock options. That is still the case today, which is why Starbucks employees are called ‘partners’.

“Success is best when it’s shared,” says Schultz. “At Starbucks, we always ask: What’s in it for our people? Starbucks is accused of being great at marketing, but it spends very little on marketing. It’s all about the experience we offer in the stores.

Managers and leaders must do everything to exceed the expectations of our people so that they can exceed the expectations of our customers.

Related: Howard Blake Stays Hungry With His Innovation Strategy

2. Regular interaction

The management of Starbucks does everything in its power to engage with employees regularly.

“We travel extensively, and the amount of face-time management has with employees across the globe is really unusual for a company of Starbucks’s size,” says Schultz.

Schultz himself, for instance, sat down with each and every new Starbucks employee in South Africa during his recent visit.

Starbucks also has what it calls ‘Town Hall Meetings’ all over the world, during which management interacts with employees in an open and informal manner.

“We tell employees that they are free to speak up during these meetings without fear of retribution. We want honest opinions,” says Schultz.

Starbucks-franchise-layout

3. Respecting (and cherishing) employees

Howard Schultz is a humanist at heart, and this is reflected in the culture of the company that he created.

“The universal language of Starbucks is a deep sense of humanity,” says Schultz. “Building a company is a lot like raising children. You are imprinting a company with a culture and a set of values. Now, if a child falls, what do you do? You pick it up and comfort it. You don’t scold it. You need to take the same approach in business.”

4. Protecting the culture

Being tolerant of failure, however, does not mean the same thing as indulging bad behaviour. In fact, Starbucks is fiercely protective of its culture, and it doesn’t tolerate bad behaviour.

“We teach employees that they have a voice, and that they should speak up when they see someone doing something wrong. You can’t enable bad behaviour because it will erode a company’s culture.”

Related: Don’t Let Expansion Ruin A Great Company Culture

5. Spending money on employees

According to Schultz, the management teams of most large companies would be horrified to discover the amount of time and money spent on Starbucks employees.

“We have been very innovative with technology, and we have created a massive digital eco-system. Interestingly, though, we spent as much time and money focusing on the things that were employee-facing as the ones that were customer-facing.”

Starbucks-storefront-layout

6. Rewarding the right things

Schultz famously stepped away from the role of Starbucks CEO for around five years, and during that time the culture of the company quickly deteriorated.

“The company lost its way. The people who were managing the company — who were all good people — were measuring and rewarding the wrong things. Things such as profit and stock price became the focus. In any business, you need to continuously ask: What is our core purpose for being? Otherwise you lose your way.”

Schultz believes that his big mistake was not selecting a successor from within the culture. When he eventually retires, he intends to choose someone from within the operation who is in touch with the culture of the brand.

7. Being human

The film Fight Club famously depicted Starbucks as the epitome of the faceless corporation taking over the globe, but the company is actually quite unique in its willingness to speak out and engage with people on a social (and even political) level.

“We are very outspoken as a company. We feel that we live in a time where the rules of engagement have changed. What I mean by this is that we need to do more for the communities that we serve. The question we ask ourselves is: What is the role of a for-profit public company? Looking at this question has resulted in us taking on social issues such as same-sex marriage, gay rights, gun control and racism.”

For example, Starbucks recently unveiled its first store in Ferguson, Missouri (which has been plagued by racial unrest) as part of a plan to support efforts to rebuild and revitalise communities.

Read next: 5 Inexpensive Ways to Create a Company Culture Like Google’s

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Case Studies

How Merchant Capital And Retroviral Were Built To Sell

Entrepreneur chats to Dov Girnun of Merchant Capital and Mike Sharman of Retroviral. We explore why their companies attracted funders, and how the relationship can be used to grow their businesses.

Nadine Todd

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Dov-Girnun-of-Merchant-Capital
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The Tech Based Business

Know your business’s numbers inside out, and don’t try to bluff your way through any questions that relate to numbers.

Dov-Girnun

Vital Stats

  • Player: Dov Girnun
  • Company: Merchant Capital
  • What they do: Lending solutions for SMEs
  • Est: 2013
  • Investor: Rand Merchant Investment Holdings
  • Shareholding: 25%
  • Visit: merchantcapital.co.za

Less than two years into his business, Dov Girnun attracted the attention of Rand Merchant Investment Holdings (RMIH), a financial services investment company that includes the founders of FirstRand, Laurie Diepenaar, Paul Harris and GT Ferreira. These are no small industry players. On an investment level, they’re the funders who backed Adrian Gore when he launched Discovery and Willem Roos when he started OUTsurance.

How had Girnun found himself in the position to pitch to investors at this level? Months earlier, RMIH had launched a fintech incubator called Alpha Code. The idea was to find pre-revenue start-ups that would be the next game-changers. Their research brought them to Merchant Capital.

“We didn’t exactly fit their mandate because we were already operational and profitable,” says Girnun, “but they still really loved the business. They’d been researching the fintech space, and had recognised the potential in SME lending, which is our focus. They really wanted to invest, but at the time I was unsure if I wanted to dilute my shares further.”

Girnun already had an investor, the Capricorn Group, whose investments include Hollard, Nandos and Clientèle, and until this point he’d been careful to maintain his shareholding. His relationship with Capricorn was excellent, as the investment team added huge strategic value to the business over and above capital, and so he hadn’t been actively seeking additional funding.

And then a new opportunity presented itself. “We realised we have golden data on the SME space. How could we cross-sell to our base and monetise that data? We started chatting to RMIH, who were aligned to our thinking.

“Once I realised the value RMIH could add to our business, my whole perspective shifted. Here was an investor that could potentially help me to build a billion dollar business. I’d be diluting shares, but building a much bigger pie.”

Related: Funding Growth with Dov Girnun

The price of equity

Girnun is referring to the investment lesson that equity is cheap early on, and very expensive later, when a funder holds more shares of your business than you do. If you look for funding later, your valuation is higher, you’ve got a proven track record, and the same amount of money secures fewer shares. Sell too early, and the exact opposite happens.

This had always been Girnun’s view, but an understanding of how far the business could potentially go with RMIH’s backing was changing his mind.

There was just one challenge. While RMIH’s investment team loved Merchant Capital’s business model, investments need to be signed off by the board, which meant Girnun and his co-founder Daniel Moritz, needed to pitch to them in person, so that they could see their energy, passion and vision for Merchant Capital.

Serious, seasoned investors don’t make this easy. They need to see your passion, and how well you understand your business. They’re not there to make the experience easy.

“Even though I knew they were interested in my business, I still found the experience extremely daunting. There were very few introductions, handshakes or jokes. I was expected to launch into my pitch, and I knew that even though I had been given 20 minutes, the first two minutes would be the deciding factor. If I didn’t grab their attention in that time frame, they wouldn’t be investing in me and my business.”

Tapping into investor concerns

“I had just returned from the Endeavour international selection panel in San Francisco, and I think this played a major role in the success of my pitch,” says Girnun.

“One of my judges, a hugely successful venture capitalist from Sillicon Valley, really explained the significance of the elevator pitch to me. Imagine you’ve gotten into an elevator with the CEO of Goldman Sachs, he said. If you’re lucky, you’ve got seven floors to get them interested enough in your business to want your card, and maybe even a meeting. They can’t possibly learn everything about your business there and then — they just need enough for their interest to be piqued.

“Because you don’t know how much time you have, or who you’ll be talking to and what their area of expertise is, you can’t just learn a pitch off by heart, and you certainly shouldn’t have a power point deck that you rely on. Both are very bad ideas. Instead, you need to know your business so well, inside and out, that you can tailor your pitch to the person you’re talking to, based on what they care about.

“Because of this piece of advice, I was able to tailor the first two minutes of my pitch to the RMIH board and what they care about. If I grabbed their attention, I’d be able to hold it for the next 20 minutes, which actually ended up being close on two hours. If I hadn’t, we would have politely shaken hands after 20 minutes (if not earlier), and been on our way.”

It’s a simple, but incredibly important lesson: Know your business’s numbers inside out, and don’t try to bluff your way through any questions that relate to numbers.

“You have to know your unit economics — are you able to distill the essence of your business economics on the back of a napkin? You need to know the high level stuff and the minute details, and they all have to be at your fingertips. If they aren’t, you have no business trying to sell your company or attract investors.”

Related: Bootstrapping Is Much More Fun Than Investors

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Case Studies

How AutoTrader Anticipated Change

AutoTrader South Africa is an online behemoth, boasting more than three million visitors each month. Not that long ago, though, the brand faced the very real possibility of extinction.

GG van Rooyen

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Autotrader-George-Mienie

Vital Stats

  • Player: George Mienie
  • Company: AutoTrader South Africa
  • Established: 1992
  • Visit: www.autotrader.co.za

Key learnings

  • Trends are out there to be identified. Being caught unprepared is unacceptable.
  • Change needs to be tracked through the use of a measurable KPI.
  • Don’t be afraid to act pre-emptively.
  • Do research. Know your customer.
  • Create an unprecedented user experience.

By the mid-2000s, it was becoming clear that the world was changing. The internet was going mainstream, placing massive pressure on industries that only a few years earlier had seemed untouchable.

The print industry in particular was coming under threat, with readers moving to the internet for information. Things didn’t change overnight, though. The general decline in readership was steady but quite slow.

Like a frog sitting in a slowly-heated pot of water, it was all too easy to ignore the evidence. AutoTrader South Africa, however, was not willing to accept death by attrition.

Related: Fake It ‘Til You Make It: How These 10 Entrepreneurs Did Just That

Measuring change

Autotrader-technology

“When it comes to the digital realm, you can never complain that some development impacted you unexpectedly. The writing is always on the wall, provided you’re taking notice,” says AutoTrader CEO George Mienie.

Long before the global shift to digital mediums started to affect AutoTrader in a real way, the company began to prepare for the inevitable.

“We knew it was coming. The shift to digital was already starting in places such as the US and Europe,” says Mienie.

“We also knew that we needed to measure this shift in a reliable way. When it comes to managing difficult change, you need a KPI that you can reliably measure.”

Comparing unique users of a website to the circulation of the magazine wasn’t reliable enough, since it was impossible to truly know how many people had used any given copy as a reference when shopping for a vehicle. Some other KPI was needed.

“We settled on leads to dealers. We wanted to track how many people had actually contacted vehicle dealers thanks to the magazine, versus how many had contacted a dealer because of the website,” says Mienie.

Finding a KPI

Tracking website leads and comparing them to magazine leads sounds like a simple idea, until you actually start to think about it. If it’s hard to know how many people used a single copy of AutoTrader as a reference, how do you figure out how many leads the mag has generated? It was a conundrum.

Tracking leads on the website would be easier, provided you were willing to harm the user-friendliness of the site. AutoTrader wasn’t willing to do this.

“We could track website leads by forcing every user to fill in some kind of form before gaining access to a dealer’s details, but we weren’t willing to do this,” says Mienie.

“Today, the average user spends a phenomenal amount of time on our site. A typical visit lasts 12 minutes, and we believe this is because our site is easy to use. While KPIs are important, they shouldn’t come at the expense of the user. Everything should be done to make the experience for the client or user as pleasant as possible.

“With this in mind, we give our software engineers a lot of freedom. They don’t need to seek permission to improve the site. If they’ve been working on something that they think will improve the website, they can run with it. You never want bureaucracy to stand in the way of improvement.”

Related: 11 SA Entrepreneurs on What They’ve Learnt About Managing Staff

An innovative solution

Autotrader-team

In order to effectively measure leads from both AutoTrader magazine and the website, the company came up with a very elegant solution called Call Tracker.

The solution was so elegant and transparent that even regular consumers of AutoTrader probably wouldn’t have noticed its existence.

How does it work? The number that you find for any given dealer in the AutoTrader magazine or on the website was not the same as the regular number of that dealer, although, the number was dedicated to a dealer.

Instead, it is a technology that redirected the call through the company to the dealer. Thus, giving AutoTrader the ability to measure leads via phone to the dealer, which was the most-used way in which consumers got in touch with dealers in those years.

Importantly, the company regularly placed a different number for specific dealers on the website and in the magazine, meaning AutoTrader could track exactly which platform a lead was generated from, and give the dealers useful insights into his/her dealership’s response.

AutoTrader had in essence created a reliable but simple KPI, using sophisticated technology at the time, that could be used to track consumers’ migration from print to digital.

The watershed

As mentioned, the migration of users was fairly slow. AutoTrader had started monitoring the trend in 2007, but it wasn’t until 2013 that the website took over from the magazine as the core focus of the business.

In the mid-2000s, the company had printed around 230 000 magazines each month, and managed to sell 55% of those on a regular basis.

Today, it sells about 30 000 magazines a month. However, as magazine sales have declined, the number of visitors to the website has skyrocketed, with more than three million visitors to the website every month, opening more than 40 million pages.

Related: 5 Wrongheaded Attitudes Stunting Your Growth As An Entrepreneur

New competition

The migration of AutoTrader magazine advertisers (sellers) and consumers (buyers) to the website wasn’t guaranteed. Getting buyers and sellers of the magazine to embrace the AutoTrader website required hard work.

“As a magazine, we had a big advantage: Potential competitors were faced with very high barriers to entry. We had the capability to compile a 600-page magazine, print it and distribute it weekly. Any new competitor would have found it hard to match us,” says Mienie. “The internet, however, obliterated those barriers. Suddenly it was much easier to compete with AutoTrader.”

AutoTrader wasn’t afraid to pre-empt the digital shift. “You need to be willing to eat yourself. One of the things we did was to place the website prominently in the magazine, knowing that it would eat into sales. We had to take a short-term hit, but we knew that we would benefit from it in the long term.” The company also placed a huge emphasis on the user experience.

“You need to be the best,” says Mienie. “You need to lead the charge and be first to market with every new development. You also need to know and respect your consumer and dealer. We believe in creating a site that is easy to use and offers more content than you’ll find anywhere else. We also make it a priority to know the consumer’s car-buying journey and car sellers’ needs.

“But, the game is changing again, fewer and fewer consumers are using the phone, and to an even lesser degree email, to get in touch with dealers. Our research over the last year shows that more than 52% of car-buying consumers don’t phone or email a car dealer, but simply take the address and visit the dealer directly.

“When it comes to managing great change within a company, research is incredibly important. But just doing research isn’t enough you need to use it effectively. The temptation exists to hog research because you don’t want competitors to get hold of it. That doesn’t work. We know exactly how much time the average consumer spends studying vehicles before buying a new car. We also know how much of that time is spent online (15 hours), and how much is spent in the physical world visiting dealers (14 hours), and this trend is shifting rapidly toward less time in the physical world and more time searching online, which means the consumer has pretty much made his choice before he leaves his screen. We give that info to our salespeople, who in turn give it to our clients (car sellers). Information needs to be disseminated.”

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