Crazy like a fox

Entrepreneur John Ilhan, founder of Crazy John’s, is just 42 and worth $310 million according to the latest BRW Rich 200. How has he done it? Ilhan tells Amanda Gome there’s no rocket science involved.

Entrepreneur John Ilhan, founder of Crazy John’s, is just 42 and worth $310 million according to the latest BRW Rich 200. How has he done it? Ilhan says there’s no rocket science involved.

Yesterday Ilhan was in the news again. After a bitter fight with Telstra, Crazy John’s ended its reseller agreement with Telstra on Saturday and by Monday was in bed with competitor Vodafone, Australia’s third largest mobile phone network.

Who: John Ilhan
Company: Crazy John’s
Talking to: Amanda Gome

Amanda Gome: You came upon your name Crazy John’s because people told you your marketing ideas were crazy. What were several crazy sales or marketing ideas that worked really well when you were starting up?

Marketing is so important when you are competing against some of the biggest corporations in Australia, like Telstra. Our success (Crazy John’s has 105 outlets) has been due to our innovation. There are too many examples to list, but Crazy John’s was the first in the business to offer mobile telephones for $1 each in an era when mobile telephones were certainly a lot more expensive. In the early days we held midnight barbecues to attract customers, and these proved very popular and were certainly very different. Events like these received media attention, which wasn’t bad for business at the time which only had a few stores.

How have you changed your approach to selling and marketing?

Crazy John’s might have grown enormously over the years, but in many ways our sales and marketing approach has stayed the same from the time we had just one store and I was behind the counter. That’s the simplicity of our business – keeping giving customers what they want and keep innovating. Remember, while we invest heavily in advertising and sponsorship that has significant grown brand awareness, like our recent sponsorship of the Crazy John’s South Dragons NBL team. The best advertising for any business is word-of-mouth, and Crazy John’s knows that if we always offer our customers the best service and product possible, then customers will come back.

How are you using your website to generate new business?

Crazy John’s is investing heavily in upgrading its website and we expect a far greater percentage of our customers to use the website in the future. Our new website will offer customers a range of services that go far beyond online sales, although that will remain important. We will also significantly enhance the content of our site so it becomes a genuine resource for product information, advice and assistance.

Business owners keenly feel a sense of isolation. You are the boss. What happens at the office party? Can you join in as one of the staff?

In the past six months, I have completed an Australia-wide tour personally seeing all of our staff as we participated in entertaining, yet informative tenpin bowling nights. Staff really value that personal interaction as it proves they are the most important asset I have in the business. They are our frontline sales team, which is why Crazy John’s invests so heavily in training staff. We also recently held the largest ever staff conference in Queensland, where once again the personal interaction between staff and senior management including myself was paramount.

What do you see as the biggest changes in your industry?

The telecommunications sector is one of the most competitive of any sector in Australia. There are always new products, new plans and new marketing initiatives being thrown at us from all sides. In addition to this, the relationships within the industry are also changing, including the new relationship between Vodafone and Crazy John’s. The key is to stay ahead of the competition and have a brand that is clear about what it stands for in the eyes of the customer. That’s where Crazy John’s has a distinct advantage. Customers know we stand for great deals and fantastic customer service. As our competitors throw everything at us, the important thing is to stay true to your own key values. Crazy John’s prides itself on always upholding the values of the customer, and our competitors will no doubt be even more determined in the future.

You say that credit cards will be gone in five years and the mobile phones will take their place. How will that change the banking and telecommunications industry? Who will go out of business?

Customers want convenience, and banking is no different. Mobile phones will be another very important channel to deliver financial services to customers and the finance community will embrace that, including banks and credit card providers. I don’t think anyone will go out of business. Instead, the integration between organisations will increase. Banks will relish the opportunity to enhance their connection with customers, and telecommunications providers will continue to develop to deliver a range of other financial products to customers in the future.

With these changes, what are the new opportunities for entrepreneurs?

Every change in customer behaviour offers opportunities to grow. In terms of telecommunications, the race will be on to deliver new products and services efficiently, safely and at a price advantage. The telecommunications provider that can do this the best will have a huge jump on their competitors.

What’s happening overseas – what is the cool technology in your industry?

The launch of new mobiles excites everyone as customers continue to expect more and more functionality. The convergence that means mobiles will be able to do everything a PC and a television can do is certainly the way of the future. The launch of the iPhone in America last week generated large amounts of media interest and attention, which illustrates the interest in the happenings of the industry. Crazy John’s will be bringing to Australia some new innovations in mobile technology in the very near future never before seen in this country. So watch this space.

What’s the biggest threat facing your business?

The biggest threat is always not continuing to innovate and change. Crazy John’s quickly established a reputation for being a market leader for great deals and customer service but the competition always tries to copy. Staying ahead of the competition means not being afraid of continuing to offer the customers something new and better, and that’s what we have to always do.

What is the riskiest thing you have done in business?

I started Crazy John’s with no stock, one shop and $1000 in my pocket. I think that is definitely risky!

Are you a short-term thinker?

It’s easy to get caught up in the day-to-day management decision-making, but what’s important is to have a balance and continually think long-term and about the big picture. I have a fantastic senior management team that is able to look more and more after the day to day, allowing me more time to be strategic in planning for the future. That’s the way it should be for my board and myself as the founder.

How far do you plan out? Six months? Two years? And how do you plan?

There is no one fixed rule for this. Sometimes opportunities for sponsorships or marketing come up with just a day’s notice and you have to act right there and then, but the fundamental shifts in our business approach or customer service are sometimes more than a year in planning. You have to be flexible enough to know when to act quickly, but at all times have a team within the organisation planning long-term change.

What is your favorite service provider? Business coach? Accountant? Why?

I don’t have a business coach, but the two people who have had the biggest effect on my business life are my fellow board members – my managing director Brendan Fleiter and chairman Barry Hamilton. I thank them so much for their assistance over the years.

If you had your time again, what would you outsource?

Nothing. I would not change a thing.

What do you do when people are not marching in the same direction?

I always believe in being honest with people who work with me and it becomes obviously very quickly when staff or senior management are not marching in the same direction. The important thing is you cannot let the situation go on for long. You must tackle it quickly and talk to them about it and offer them options if they don’t also recognise the situation as well.

Business owners usually feel great loyalty to their staff. What happens to you when it is not returned? Are you hurt personally?

The loyalty of staff is very important, and if they do not wish to be loyal, then there is little you can do. It does hurt personally if loyalty is not returned, but I’ve been very lucky to have a core group of staff that have been very loyal. These are people who have been with me from the start and you cannot beat that sort of commitment.

Do you see the nasty tall poppy syndrome at work in Australia?

On a personal level I’ve had nothing but support and encouragement from the people of Australia, including the media. I am very thankful for that.

You have taken on some major players. What have you learnt fighting bigger companies?

The key is to be true to yourself and be clear what you represent to customers. Your competitors might have deeper pockets and spend more on advertising and marketing, but if the customer knows what you stand for they will still come to you, no matter how big (or small) you are.

Are you tempted just to walk away?

Never. I am passionate about what I do, and I want my customers to always get the best. I would never walk away from that.

When has been the most difficult stretch where you spend nights staring at the ceiling?

In the early days it is no secret that things got tough and I could have lost the business. I can tell you there were times when it was difficult to get to sleep at night. But the way to counter that anxiety is to work even harder, especially when you know deep down you are offering something the customer wants. The important thing is to take each small step forward and realise the growth little by little and celebrate the wins no matter how small.

In the tough bits, what did you tell yourself at 3am to get back to sleep?

I would always remind myself that if this was my passion, and if I cared about the customer, that this would work, and it would be successful. I knew I had the right model for success.

How did you juggle cash flow in the early days?

Cash flow in the very beginning was very tight; I used to sell telephones from a brochure, and then lock the store while I went to actually purchase the telephone, before delivering the telephone to the customer. It just shows the power of what Crazy John’s were doing right from the start that customers would believe enough in me that they would buy a phone without even being able to touch and feel it.

Running a business is relentless. How do you overcome mental and physical fatigue?

I don’t think there is fatigue if you are doing what you love doing. If the business you are running makes you happy, and the work you do is your passion, you will never feel fatigue.

What personal values that you hold dear flow over to your business?

My family and friends are everything to me and I think the concern I have to do the best for them spills over into how I treat the customer. They are my extended family; they have helped me build a business. Just like if you look after your family they will remember; the same is true for customers. That’s why I enjoy the personal interaction with customers and still drop into stores whenever I can.