How we built a business out of recession - chapter 48 - the art of the deal

The story of CitNOW*

This is the 48th 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.

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Photo by Daniel Lincoln on Unsplash

Alistair wasn’t happy. He presumably expected everyone to go all gooey-eyed over the Ford deal he’d negotiated. That didn’t happen.

I use the term negotiated loosely because the base price was lower than it should have been. A coach and horses had been run through our price list, and it came lavishly garnished with caveats.

Why not leave it to the Sales Director to do the job he was paid to do? Gordon had plenty of experience and deals aplenty. He was even known to have had the occasional nightmare about needlessly heavy discounting. Instead, he’d been relegated to a bystander at the fateful meeting.

Complex pricing negotiations were nothing new to the business. However, it was disrupting our transition to Salesforce as part of our future-proofing efforts, with the expectation that we might earn a few brownie points when the due diligence process began.

In the meantime, the inputted price and sales data now resembled a Swiss cheese, because the rules around discounting — the same rules that the rule breakers had created — had been torn up into a hundred pieces.

This deal was different, was a regular excuse. It meant the order couldn’t be processed under the rules-based system that Salesforce represented, and others, including Donna and her team, had to try to sort it out. Otherwise, invoices couldn’t be generated.

It wasn’t the first company where I’d witnessed poor sales discipline. It was often accompanied by unruly salespeople strutting around like peacocks when they brought in a new order. This was, of course, the only thing that mattered. They somehow felt safely elevated to an almost untouchable position. Any issues with their discounting nonsense, a small incidental, could be resolved by someone who hadn’t been honoured with a company car and certainly couldn’t afford two weeks in Tenerife every year.

Perhaps it’s all changed now? What hasn’t is dropping your draws to win an order. It’s still a sign of weakness and illustrates a profound lack of skill. It means they don’t know what to do when a buyer raises an objection. Every buyer says no; they ought to because they’re trained to get a good deal, which doesn’t necessarily mean the lowest price possible.

In my youth, when I sold Duracell batteries to Asda Non-Food Managers, I was dealing with highly motivated people who had been on courses entitled, How to Say No to Salespeople. We weren’t even allowed to negotiate the price. High street salespeople were not entrusted with such responsibility. Instead, we debated planograms and additional manufacturer stands.

I wasn’t in the room that day, but I know I would have tried to resist talking about price until I absolutely had to. There is so much more to discuss, which could impact what was ultimately agreed upon. Once a price is on the table, it can only go one way. Down.

What was good about Ford was the fact that we’d earned our place in the room with the Head of Europe. He’d witnessed the effect, or it had been brought to his attention, and now he wanted it in his dealerships. Getting the deal, even one I didn’t like, was the culmination of a lot of team effort.

Doing the deal wasn’t difficult. Getting there was the hard bit.

It reminds me of John Feinstein’s best-selling classic about the PGA Tour, A Good Walk Spoiled.

He asks the question as to which player has the more difficult putt to make? The one on the 18th green on the last round of the last day of the season. The putt needs to go in to keep that player on the Nike Tour** for another year. Or a player already on the PGA Tour also on an 18th green. This player might see his prize money reduced substantially if he misses. But there’s always next time. He’s already earned the right to play at the highest level.

Knowing that I would leave when the right deal came along, I also started succession planning. Marketing had never been a big team; three or four people at most, trying to justify its existence within a sales-led culture. It still served an essential function, helping to grow the UK market while also supporting Europe as it gained in importance.

Claire fitted the brief perfectly. She lived locally and had been the Marketing Manager at Zyxel*** for some time. She proved to be a good choice and is now the Group Marketing Director, which she thoroughly deserves. I’m sure there were one or two bumps in the road which she’s since had to negotiate.

With Claire in place, I was able to explore other sales opportunities and assist the training team with the regular roadshows, which we offered to dealers who wanted to learn more about the benefits of CitNOW or needed a quick refresher. It was a time I enjoyed immensely because we were now playing on the PGA Tour, to borrow a metaphor.

Gordon was flat out chasing the low-hanging fruit in Europe, which left me to pick over missed opportunities in the UK. Because it was our biggest and most advanced market, anything new was most likely going to happen here.

Over the years, several attempts were made to launch new products to increase the average revenue per user (ARPU) or dealer, in our case. Bodyshop had tried and mainly failed because the imaging market was owned by Audatex.

The other was website imaging, which was ripe for change because it still relied on photographers visiting dealers once a week to take digital images of the new, used car stock that had arrived since the last visit.

All that was about to change when I visited an Inchcape dealership in Telford.

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*CitNOW was our company’s trade name before we sold it in 2018.

**The Nike Tour was an old developmental tour for the main PGA Tour. It is now called the Korn Ferry Tour. Many of the players were travelling between competitions in camper vans because their prize money barely paid their entry fees and living expenses.

***Zyxel is a networking company. We’d used plenty of their routers and access points in the early days.