How we built a business out of recession - chapter 45 - moving on
The story of CitNOW*
This is the 45th chapter about CitNOW, the company started from a kitchen table in Winnersh, Berkshire. If you’d like to read from the beginning, here’s a link to chpt 1. Each chapter is a 5-minute read. It’s an early draft of a book.
CitNOW was founded by Andrew Howells and Donna Barradale in 2005, although the company was only registered in 2008. In February 2018, we sold the company to Tenzing, a UK private equity company. It has been sold again since.
He never forgave me. Why would he? Not that I cared, the company and its future were what mattered. Having taken control away from him, it must have felt like his worst nightmare. He hid it well. Having read the room, he knew opinion was not on his side, so he accepted the situation and got on with what needed to be done. There was no complaining in the following weeks, beyond a vexation that he’d now lost a good friend, which certainly couldn’t have been his fault.
Claudia, our new Finance Director, was able to join quickly. She’d been in a temporary contract, which was nearly as attractive as her automotive and software start-up experience.
Her excellent, new monthly board packs and presentations were soon being delivered, albeit the bad news still being presented, but in a clearer, more indefatigable way. She knew what needed to be done, as did we, and I’m sure she was aware of a certain sensitivity around decision-making with only Alistair for company. Everyone was keen to avoid a return to the bad old days, which would be difficult to repeat anyway, so soon after the last debacle.
Breaking the mould was the first step; the next was to remove cost from the UK. The account managers and the management hierarchy all went, leaving us with the problem of dealing with the fallout, now six people lighter in the UK, including another board member.
Initially, there had been concerns about fewer regular visits to the manufacturers or the bigger dealer groups. The cosy monthly meetings at head office and free visitations to their underperforming dealers had to stop because they weren’t factored into the monthly licence fee. New business was in short supply from our fully expensed account team with company cars, who preferred the comfort of dealing with account issues and writing daily reports. The time needed to generate sales simply wasn’t there. People were busy, but not on what was essential to the company’s or their future.
We couldn’t put the monthly licence fees up; we were already the premium-priced leader in the market with cheaper competition. The answer was to continue growing and serving our existing customers' needs more economically.
I’m also not blaming those who left. They were caught in the middle of a young company needing to change direction quickly. They were also being paid bonuses just for doing their day job. The sales side of their bonus was rarely, if ever, achieved because there was too much to do with the existing accounts. Catch 22.
We’d also kept changing the brief, trying to find a way to continue our excellent face-to-face customer service while still being able to afford to pay for it with new licence revenue offsetting the cost.
How would our customers react to these significant changes?
Angela reminded us that her business had always relied on telephone support from her Crewe head office, and it had never been an issue. If our bigger accounts needed face-to-face meetings, they would now have to be handled by board members. There was no longer anyone else.
The reality was that our customers didn’t seem too bothered. Less frequent meetings continued, but now they saw board directors rather than account managers. It was probably viewed as a good trade-off. Plus, our agendas were more likely to include new licence fee opportunities in their bodyshops or for web imaging of used vehicle stock.
The exceptional Sarah, who’d been with us a long time in various internal sales and administrative roles, took on all the dealers looking to cancel contracts (we still had a relatively low churn rate) and used our much cheaper field-based product experts when she needed an on-site freebie. Dealers were encouraged to buy a day’s training, with one of our trainers visiting the dealership, but these were difficult to sell when the dealer was in cancellation mode.
The only real wobble we had was with Motor Trader, one of the trade journals. I’d dealt firsthand with their editor before when we’d been shortlisted for an industry innovation award. I’d turned up in Croydon, at one of those featureless brown brick office blocks, to make a presentation to their judging panel.
The editor had been flanked by two elder statesmen in blazers, who would have looked more at home sitting in the lounge at The Royal Automobile Club on Pall Mall, sipping brandy. They smiled politely in all the right places, and we were awarded a ‘commended’ (not even a precious metal) on the night, which was basically an insult, given what we’d already achieved in the UK.
At the time of this near miss, we weren’t spending advertising money with them or taking numerous tables at Grosvenor House, Park Lane, for the award ceremony. When that changed, we won our fair share.
Someone was stoking this editor with rumours that we had a cashflow crisis, numerous redundancies were being made, and half the UK workforce had gone. I’d had several gun-to-the-head moments before with the press, and I managed to persuade this editor to come into the office for a meeting before he went to press the following week.
He’d never visited us in Wokingham before, and it would be easy to refute much of the bullshit which was now being spread quite effectively by one of our previous employees.
I didn’t blame the muck spreader. They were angry and had been totally mismanaged in the lead-up to our current decision.
Alistair insisted that he was at the meeting, which was mostly a bad idea, but could be spun as a good one. With him in the room and our Head of HR, three would have looked like we were trying to overt a crisis. I left them to it. A piece was posted, but it was much fairer and closer to the truth.
Importantly, no one saw any hares running.
We moved on.
*CitNOW was our company’s trade name before we sold it in 2018.