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Case Studies

Joe Public Advertising Agency: Gareth Leck & Pepe Marais

A start-up agency enjoys growth and accolades by being able to adapt to the changing needs of the market.

Juliet Pitman

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Gareth Leck & Pepe Marais of Joe Republic

Evolution is a word Gareth Leck and Pepe Marais, founders of Joe Public Advertising Agency, understand well. Since the pair started the agency as two twenty-something-year-olds in 1998, they have steered it through a rapidly changing industry and significant growth curve, making whatever changes were necessary along the way to ensure that the business was able to offer superb creative work that was always relevant to clients’ needs. This ability to recognise and react to the need for change has undoubtedly given them an edge in an extremely competitive sector.

Early days
Leck and Marais were both working in agencies in Cape Town when they got chatting about an idea for a new and unique advertising model. “It was called Take Away advertising and was quick, slick, no-frills approach to advertising,” says Leck. “Clients would walk in, get a cost off a board, give us a brief, get a quote on the spot and we’d get the job out really quickly,” he continues.

On the strength of this idea alone, and with no capital to speak of, he and Marais both left full-time employment to start the company. “People thought we were mad at the time. We had absolutely no money – I lived on my wife’s salary for the first three months and we didn’t draw any salaries until we could generate enough cash flow in the business to do so,” he says. But Marais adds an important point: “Naiveté was definitely an advantage in those days. We had an idea that we believed in and we went for it – we didn’t look at the thing too hard. What we knew was that the industry had a reputation for having a very ‘ivory tower’ attitude and we were idealistic enough to want to change that. We wanted to create an honest, down-to-earth, transparent agency that could still deliver great creative work, and the Take Away model allowed us to do that.” Working until the small hours of the morning, he and Leck did all the work themselves. “Our first clients were really small with tiny budgets,” says Leck, “But they got a level of work from us that was comparable to anything that a huge corporate with a massive budget could have paid for.”

Growth and challenges
The hard work paid off and as word spread, the business grew. “Our first client was a small retail chain in Cape Town called Full House – we created their name, logo and pay-off line. But I think because we were delivering huge value to clients, our name started to get known and we picked up bigger clients,” says Leck. Cape Union Mart and Kalahari.net were just two of these. After six months, the company hired its first employee and by the end of the first year, the staff complement was up to four, with the business averaging between 20% and 30% growth year-on-year following that.

“Huge challenges come with that kind of growth,” Marais comments, “I think the biggest one was leadership. We were coming off an entrepreneurial base where we hadn’t had the type of mentorship or experience you get working for, and being able to learn from, a leader. We were just two creative guys with a good idea, but all of a sudden we realised that we needed to play not only a creative, but an HR, leadership and business strategy role as well.” Marais adds: “In the early days you learn by making mistakes for the most part, but we worked hard on getting it right, employing business coaches and focusing on our personal development. We also try to give each other constructive criticism and feedback – we have a very open and honest relationship.”

Balancing act
The growth also meant implementing systems and bedding down structure, and as Leck points out, these are things many entrepreneurs battle with. “As things grow, you have to put operating procedures in place, but the trick is to strike a balance between that kind of structure and the need to retain an environment that fosters creativity. It’s a difficult tension – if you are too loose, the business doesn’t run effectively, but if you’re too tight it constrains creativity. It’s also something that you have to work on balancing all the time,” he says. He and Marais agree that the creation of an operations manual, documenting all the business processes for the Take Away model, was immensely helpful in focusing their minds on setting up the right kinds of systems.  

Shifting gear
But perhaps the greatest challenge precipitated by their growth was the need for change. The industry was starting to shift focus and more and more emphasis was being placed on the need for agencies to add strategic input to their creative work. At the same time, Joe Public was beginning to take on bigger and bigger clients, whose priorities differed from those of the smaller companies. “Bigger clients don’t necessarily want a fast turnaround time and low cost. These things aren’t as important to them as getting things right from a brand strategy perspective,” explains Leck.

He and Marais found themselves at a cross-roads: stick with their existing model and risk not being able to deliver on clients’ evolving needs, or make a fundamental change to the business. Although the writing was clearly on the wall, they agree that it wasn’t an easy decision to make. “We had to accept that Take Away advertising had run its course for us. It was a great idea and we made a lot of money out of it but it was clear that we had to shift focus because we were dealing with a different market,” says Leck. Marais adds: “The model wasn’t sustainable for us – we had grown out of it. In addition, from a cost point of view it was no longer working. Our operating costs were unrealistic if we wanted to maintain a certain level of quality and we just weren’t getting the returns that we needed. This forced us to investigate what the issue was and do something about it. But just because you know these things doesn’t make it easy to walk away from something unique that you created.” Fortunately however, the partners made the decision to shift focus to a more strategically driven model that could deliver on the new needs of the market and the bigger clients such as Clover, Tracker and eBucks that they had landed.

Retaining identity
So how did a company that’s in the business of brand positioning cope with the shift in its brand focus? Since inception, Take Away advertising had been its key differentiator so what did the change mean for Joe Public’s identity?

“It’s an interesting question, but I think it’s true to say that even though we changed our model, we didn’t change who we were,” answers Leck. Marais explains further: “As our name suggests, when we created Joe Public our ethos was about being down-to-earth, being in touch with consumers and customers. It was based on the principle of advertising for people, by people. Yes, the Take Away model was a key differentiator for us but at the end of the day, it was simply a vehicle for the delivery of these values. We outgrew it as our clients grew but our values are the same today as they were when we started out. We’re still about delivering down-to-earth advertising that reflects the fact that we understand clients’ needs and are in touch with the market out there.”

Remaining relevant
The shift in focus meant that the company almost had to prove itself all over again – this time without the key differentiator of the Take Away model. Leck and Marais approached this challenge by ensuring that the agency embraced strategically-driven creativity wholeheartedly. “What’s kept us in business all these years – and what will continue to keep us profitable – extends beyond mere creativity. Yes, creativity is vitally important but you need to combine it with a real understanding of a client’s business. Too many creatives don’t place enough emphasis on this. They’re out of touch with what clients need and what the clients’ market is – and this means that the advertising, no matter how creative it is, doesn’t deliver results for clients and is therefore not relevant. And if the ad doesn’t work for clients, you can’t pay your bills. It’s as simple as that,” says Marais.

Leck points out that the business goes to extra lengths to conduct consumer research and bases its work on sound consumer insights. “There are two clients you need to understand – your own client and then their customers, which is the market that your work is targeted at. The starting point is having good relationships with your clients and treating them as business partners,” he says, adding, “We’ve also structured our team in such a way as to reflect the diversity of the different markets out there. If you have a team that’s diverse in terms of age, race and skills, you’ll always have someone who has insight into a particular market segment. But if your team is homogenous, you’re never going to be able to speak to the diverse markets South Africa has.”

Performance measurement also plays a key role in keeping Joe Public’s work relevant. Leck explains: “We score our own work, which can be pretty tough sometimes because it exposes where your weaknesses lie, but it’s the only thing that really keeps you in touch with a client’s needs and expectations.” But when clients talk, you really have to listen, he adds. “It’s not enough to just be enthusiastic about getting feedback from clients – when you get it you really have to listen to it and act on it, implementing the changes suggested,” he says. Just as their industry is constantly evolving, Marais and Leck look forward to taking on the challenges of new growth and changes in the future. “We now know that we can adapt and we’re not afraid of change. In fact, we embrace it. We’re excited about the possibilities that wait for us on the horizon,” they say.

What it takes to make it in advertising

  • Tenacity: this is not an easy business and you’re only as good as your last ad so there’s a huge amount of pressure. To be able to take it you need to be passionate about advertising and creativity
  • Your first objective should be to understand your client’s business – great creativity is just the vehicle through which you achieve business objectives for your client
  • All advertising work has to be results-driven
  • Listen to what comes out of client assessments and make changes accordingly. The point of getting feedback is so that you can take action
  • Personal development is very important if you want to run an effective business – be open to the fact that you don’t know everything and that you will make mistakes. Take criticism and learn from it. Draw on the resources of other people, whether they are professional business coaches, your partners, staff or friends
  • Don’t be afraid to put systems in place – procedures and structure are necessary to help you manage the changes that come with growth

Timeline & Achievements

  • 1998: Launched the company with no clients, no money, armed only with big dreams. Staff complement was 3 at this point.
  • 1999: Did major campaigns for MWeb and Investec. Won a D&AD and Loerie Gold for corporate identity as well as a host of other creative awards.
  • 2000: Secured the Kalahari.net account. Rated by Financial Mail as “The Emerging Ad Agency of the Year 2000”.
  • 2001: Had by this time grown to 20 people with annualised billings of R30 million. Secured Ocean Basket, Spier and Robertson as new accounts.
  • 2003: Was voted as one of “South Africa’s Most Promising Companies 2003”, by an annual publication produced by the Corporate Research Foundation.  Also added the Mahindra car account to our books.
  • 2004: Merged and re-branded an existing agency in Johannesburg. New clients gained for the year included Clover, Italtile and Tracker.
  • 2005: Gained the eBucks account.  At this stage, staff had more than doubled to roughly 50 people.
  • 2007: Secured new accounts Nintendo, Planet Fitness and the Legacy Hotels group and won 14 local and international creative awards.

Juliet Pitman is a features writer at Entrepreneur Magazine.

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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