For the first few years the computer division at Harvey Norman did not experience year-on-year 140% growth.
It grew very slowly. At first, not one of the big brands wanted to do business with us. For our business to be successful we knew we had to leverage the reputation of the big brands to build credibility in the market place. Credibility builds trust; trust reduces fear in the purchasing cycle. Hence, the team and I sat in my office and pondered how we were going to become the market leader in our marketplace, exploding sales in the process. I remember writing down 3 words:
- Compaq
- IBM
- Apple
If we were to be successful, we needed the three largest names in the industry – or the CIA – to sell through our stores. We put together a strategy and identified the vision. We pitched this vision to the proprietors and told them that in the next 3 years, Harvey Norman stores would be stocking Compaq, IBM and Apple. However, Apple had a cult following and did not want to destroy their reputation among their existing loyal and supportive channel partners by having their goods sold in a discount store. IBM simply said ‘No.’ The vision started to look like a pipe-dream and seemed to be slipping from our grasp.
We persevered, and we were determined.
The smaller suppliers who supported us were given full page adverts in the major newspapers with the adverts cutout, sent to Compaq, IBM and Apple with a note that read, ‘This could be you!’
We realised that to achieve our vision, IBM and Apple needed some convincing. What better way was there than to tease them with the very real opportunity of highlighting their brand name in a full page advert in a major paper.
Once I sent a bottle of Anti-Dandruff shampoo with a note saying, ‘It won’t happen overnight, but it will happen.’ We even went as far as sending purchase requisitions for stock and following it up with a phone call to the sales representative. I said, “Your Company is in the manufacturing game and you need volume to feed the machine. One day your boss will come to you and ask, ‘Why are you not selling to Harvey Norman? Why are we missing out on this opportunity?’ ” Several years later, Compaq, IBM and Apple had come on board and sold their stock in Harvey Norman stores. The division’s sales rose from $12 million to $565 million in 9 years. We had achieved the vision and placed Harvey Norman among the giants of computers and communications retailing in Australia.
Achieving a goal requires a vision. At the beginning, not many people believed computers sold through Harvey Norman would be successful. But Gerry Harvey saw the potential in the original business plan. We later, presented the vision to the proprietors and over time, they came on board. Eventually, so did our preferred suppliers. We dogmatically stuck to our vision and saw it come to pass.
In selling your vision, describe in clear detail where you want to head and how you want to get there. People are attracted to vision and will support you. Once you have your team, they will assist you on your journey. You will, achieve your goal.
Activation exercised!
Go back to when you started the business. What was the vision for the business? If you didn’t have one then, write one now. A significant reason why Harvey Norman came to dominate the computer market was not due to the size of the stores or a strong product offering. It was the result of a simple marketing initiative.
On August 24th 1995, Microsoft was about to launch its latest operating system – Windows 95. In the computer industry this was like the second coming. No one thought the Microsoft Windows 95 launch would be big in Australia until after the ‘real launch’ in America. Then, one of the proprietors suggested we take advantage of the difference in time zones and launch Windows 95 at midnight, a few hours prior to the launch in the US. It meant we would be the first company in the world to sell the program.
At first I dismissed the idea but later, realised its potential. We pitched the strategy to the other computer proprietors who thought we were idiots. However, even against quite strong internal opposition I stuck to my guns and placed adverts in all the major media outlets and implemented an aggressive public relations campaign. The increasing media interest leading up to the launch created such expectation a week out from the launch we knew our gamble had paid off. This was going to work! People began to queue outside the stores hours before. Then, midnight struck. There was a mad rush. People fell over themselves to get the new Windows 95 program. All the major television stations and news outlets filmed the event and interviewed the proud new owners of the program. During that first month, we sold 82,000 copies. The campaign also meant Gerry Harvey was interviewed by the Today show, where he proclaimed, “I love Bill Gates. I wish he would bring out Windows every year!” It was a huge success.
Harvey Norman, nationwide, became firmly established as the place to buy your computer equipment.
The principle is —just have a go.
One of the great things about Harvey Norman is it has a culture that allows people to try new ideas and then gives them some leeway if they make mistakes.
Entrepreneurial companies are built by people taking risks and learning from the experience. When we decided to launch Windows 95 at midnight, it was risky and we were not 100% sure it was going to work. I do however remember thinking to myself, “…just have a go.”
Tony Gattari is the former General Manager of the Harvey Norman Computer Division. Today he is the CEO of Achievers Group and each year, speaks to tens of thousands of business owners around Australia.
To find out more about Tony Gattari, visit www.AchieversGroup.com.au
