The story starts in the 1970’s with an electrical appliance apprentice who was as short of money as he was of confidence. After struggling through school with dyslexia, Hirsch eventually dropped out in standard seven and, after completing an apprenticeship started working in a company in Durban North repairing appliances. “There was another guy in the business who sold appliances and we kept bumping heads. He wanted to push the margins up while I thought we should charge reasonable rates in order to keep customers happy. Eventually he suggested I go on my own,” recalls Hirsch, “But I kept making excuses for why I couldn’t – I had just got married, we’d just bought our first property, then we’d just had our first child. I wanted to have my own business but I just didn’t have the confidence to do it, until eventually he gave me the push I needed.”
In 1979 with the grand total of R900 in his pocket (approximately R14 800 in today’s terms), Hirsch took the leap and opened his first electrical appliance repair store in Durban North. “I had to pay R300 in rent and a R300 electricity deposit upfront, and I spent R300 on marketing before we opened – so on day one I was absolutely flat broke,” he recalls. The business did repairs and sold electrical appliance spares and on its first day made 30 cents. “In those days brown bread cost 11 cents a loaf and it was enormously symbolic that I was able to buy bread on my way home with the money I’d made,” he says.
Though small, it was a sign of success to come. Today Hirsch’s employs 650 staff, sells in excess of 70 000 units a month, owns a sizeable share of the household appliance, LCD and Plasma market and during 2007, did a R700 million turnover. Not a bad return on R900. Hirsch’s philosophy of keeping customers happy started to pay off. “I had been doing work in the Durban North area for three years and had built up a bit of a customer base. They all knew I was moving and thankfully some of them moved with me, but that’s not to say that there weren’t many lessons I had to learn in those early days,” he recalls.
One of them was about timing. “In summer, being Durban, I noticed all these air conditioners leaking and rusting so I had what I thought was a great idea. During winter I sent out letters to a whole lot of people offering to service their air conditioners at a special rate, and I then followed the letters up with phone calls,” he says. The response was a deafening silence. “For 42 letters, I received not one piece of business and I went home and told my wife I’d made a terrible mistake and obviously didn’t know what I was doing. But come the first hot day of summer, I got 25 calls from those people. It taught me an important lesson about patience and timing. Things don’t always happen overnight in business,” relates Hirsch.When his competitors opened shops in the same area, Hirsch doggedly kept his head down and focused on his own business. “I’ll never forget loading a fridge outside my shop one Friday afternoon and seeing one of my competitors driving off with a boat behind his car, shouting as he went that he was off to the dam for the weekend. I couldn’t understand how he was able to do that and I wasn’t. But I’ll tell you something else – he wasn’t in business six months later and I was, so it’s all about focusing and working hard!” he smiles. One thing he didn’t have to learn was how to serve customers, and it was his early passion for this that inadvertently led to the expansion of the business into appliance sales. He’d tell customers if an appliance wasn’t worth repairing, and while this meant that he didn’t get the job in the short-term, his honesty built up long-term trust. “Customers would tell me what new appliance they were thinking of getting and I’d tell them what I thought of it and whether spares were still available for that model, and eventually they’d ask me if I could get them the appliance,” he explains.
But where others might have seen the opportunity to make a quick buck, Hirsch had other ideas. He’d buy the appliance from the same store that a customer could visit, deliver it to their house, install it and then (and here’s the kicker) charge them the same price that he’d paid for it. “Yes, it’s true that I didn’t make any money doing it but it still made good business sense. Because people got to know us for our service, and they started coming to us for appliances so the business was able to expand its offering,” he says, adding “It started slowly with the odd fridge or washing machine, but it was an important move.” In every business there is usually one identifiable tipping point, a moment when, looking back, the entrepreneur can point to one single thing that catalysed significant growth. For Hirsch’s this thing came in the unlikely form of a microwave. “I had put two microwaves in the shop and they just didn’t sell, which really got to bother me because I’ve always believed that you buy something, sell it and pay for it in 30 days. But I realised that I really didn’t know anything about microwaves and that I’d never sell them if I didn’t understand them, so I took them home,” Hirsch recalls. Thrilled at what he discovered about the versatility of the product, he and his wife arranged a product demonstration for one evening, inviting 15 couples to show them what the product could do. “We sold 12 microwaves that night,” Hirsch recalls.Word spread and Hirsch’s quickly became known as the microwave experts, status which eventually enabled them to open a microwave cookery school at their new premises in 1983, the first store which the business bought on auction with a bank loan. “The school never made money in its own right but it generated a huge amount of business for the store,” explains Hirsch. It was in that store that appliance sales really started to take off. The business had a good mix, offering services and repairs for the appliances they sold.
Further growth was on the way, with the second Hirsch’s store opening a year later in Central Durban. “And then came a very important lesson,” says Hirsch. Keen to move into Pietermaritzburg he purchased an existing business similar to Hirsch’s. At the time it seemed ideal, having both the location and the middle management structure that Hirsch’s, as a growing business, was keen to implement. “We thought it was a deal made in heaven but what we discovered is that the business we took over had a very different culture and philosophy to ours. We took over staff who were used to doing things differently to the way we did things and it was a real struggle. Eventually, after three years the managers’ restraints were up and they left to establish their own store,” he says. What did the experience teach him? “Not to buy other people’s businesses!” he replies. More than that, however, it highlighted how important culture was to Hirsch’s. It’s something to which Hirsch has an almost fanatical devotion: “People often ask me what the secret to success is and I tell them there’s no secret. You just have to focus on the basics, and customer service is a basic. It’s the philosophy on which the Hirsch culture was established. We have always tried to remember and implement the little things, like greeting a customer, smiling, walking them back to the till and carrying their parcels to the car. These aren’t insignificant things – they are the fundamentals on which success is built.”
He concedes that instilling this culture in staff is not an easy task, and one that’s made even more challenging as a business grows. “It’s something we experienced when we expanded out of KwaZulu-Natal into Gauteng, opening our first store in Fourways,” he says. Hirsch and his wife now commute regularly between the Durban head office and Gauteng. Their Gauteng home is, in fact, 12 steps down the passage from his office, above the Centurion store. “We learned that you just have to be here if you want to instil a particular culture in your staff. It doesn’t happen on its own – it’s something you have to actively manage and work on. Staff come from different businesses, each with their own unique culture, and you have to work at getting them to live out your culture,” he explains.
Leading by example and remaining hands-on are also essential to getting it right. Hirsch’s huge plate glass office window overlooks the shop floor and he takes every single call personally. “Although I have to be in the office a lot because I do all the buying, my door is never closed and customers can come up and see me any time they like. I’m also on the floor every Saturday and work all the trade shows myself (my son calls me The Mascot!),” he quips. Every store has the photographs and cell phone numbers of the managers and the Hirsches clearly displayed. “Each invoice has his wife and partner, Margaret Hirsch’s cell phone number at the bottom, prompting customers to call her directly if they have a problem. We’d rather know about a problem immediately so we can deal with it and keep customers happy – that’s what it’s all about,” he adds.But while the Hirsches are hands-on and the business is still very much a family-run concern, they understand the need to hand over as well.
The move to Gauteng came at a time of dual growth in KwaZulu-Natal and necessitated the implementation of certain structures and systems. “We used to have head office – which is run pretty mean and lean – and then store managers but we now have a regional manager for Gauteng and KwaZulu-Natal as well and they each have a team that works with them,” says Hirsch, adding that the key to handing over is employing good people who he can trust. “There are also people who’ve been with us for years and I have no problem delegating things to people I am comfortable can manage them and have the best interests of the business at heart,” he says.
It’s a sound philosophy and one that will stand the company in good stead for the growth that Hirsch has planned for the future. “We’re opening in Modderfontein in the new Greenstone Mall, and are planning to move into Cape Town by 2010,” he says. The biggest challenge on his plate right now? “Changing people’s negative mind-set about the country. It’s a challenge for us all but I always tell the story of cows and rhinos. A cow will always choose the greenest grass and avoid terrain that’s difficult. A cow moves with the herd. But if you live in Africa you have to be rhino. You have to be really thick-skinned – you can’t let those negative arrows puncture you. And when you want to move ahead, you have to charge at your target. My advice to entrepreneurs? Focus on your goal – be a rhino.”
Breaking into new markets
The move to Gauteng proved particularly challenging for Hirsch’s. While the brand was well-known in KwaZulu Natal, most people in Gauteng had never heard of it. “Breaking into a new market was an enormous learning curve. Firstly, our advertising and marketing strategy had to change. In Durban we’d advertise in the big daily papers which would go out to all areas, but in Gauteng we realised that people like to shop in their specific area, so our marketing had to be far more focused and targeted,” says Hirsch, adding that the company also made extensive use of radio advertising.“I think that our presence at consumer exhibitions has also been hugely beneficial. We’ve always done it in KZN and continued to do it in Gauteng. People talk about what they’ve seen at shows and word gets around,” he says, adding, “It took about three of the big shows and all of a sudden people recognised the brand and knew where our store was.” Because Hirsch works the shows himself, future customers also get to meet the man behind the brand, which goes a long way to helping establish the human family-feel that characterises the company.
Back to sales basics – Allan Hirsch’s sales principles
You don’t get a second chance to make a first impression – when you greet a customer, smile and introduce yourself with confidence.
Sales is about listening – ask questions and listen to the answers a customer gives you. They’ll tell you what they want and if they don’t know, the right kinds of questions will help them decide. Product knowledge is absolutely essential – every morning our sales people get briefed on any new products or price changes and they are expected to take notes. Motivate your sales force – people are motivated by the success and advice of their colleagues so we ask one person to give a short motivational talk every morning.
