Value over price

Qual­ity – and guts – pay off

Finweek English Edition - - Business Strategy - MARC ASH­TON marca@fin24.com

UN­LIKE MANY EN­TREPRENEURS, Ayanda Mbanga didn’t al­ways ex­pect to be work­ing for her­self. “En­trepreneur­ship is some­thing I’ve grown into and I’m thor­oughly lov­ing it,” she says. That may be the sin­gle most im­por­tant les­son – or­ganic growth, that is – Mbanga has learnt since start­ing Ayanda Mbanga Com­mu­ni­ca­tions, widely re­garded as one of South Africa’s fastest grow­ing play­ers in the re­cruit­ment ad­ver­tis­ing in­dus­try.

But with the me­dia in­dus­try evolv­ing at such a high speed, ad­ver­tis­ing agen­cies have de­vel­oped a rep­u­ta­tion for a high turnover of staff and clients. Client re­ten­tion of­ten de­pends on the abil­ity to ne­go­ti­ate the best deal for ev­ery­one in­volved. “Not as easy as it looks,” as Mbanga likes to put it.

How­ever, she’s quick to add “it can be done”. In­deed, while it’s true most en­trepreneurs bat­tle un­der the pres­sure of man­ag­ing staff and stay­ing mo­ti­vated, Mbanga seems to have what it takes. “Pres­sure to lead by ex­am­ple makes me a bet­ter per­son,” she says. “If I be­come a slacker, ev­ery­one around me slacks. I’d like ev­ery­one who has worked at Ayanda Mbanga Com­mu­ni­ca­tions to re­mem­ber it as the best place to have worked in their ca­reer.”

She may just get her wish. Last year was a golden one for Mbanga and her team, hav­ing won the 2007 Sun­day Times Grand Prix award for re­cruit­ment ad­ver­tis­ing. “Those are the Lo­eries of re­cruit­ment ad­ver­tis­ing,” she says proudly.

But it wasn’t all smooth sail­ing. What­ever your per­spec­tive on en­trepreneur­ship, a risk is a risk and Mbanga’s ven­ture into en­trepreneur­ship took a lot of guts and grit. Af­ter qual­i­fy­ing with hon­ours in jour­nal­ism at Rhodes Univer­sity, Mbanga joined lead­ing ad­ver­tis­ing agency Saatchi & Saatchi as a copy­writer. Two years later she’d worked her way up to MD of its re­cruit­ment ad­ver­tis­ing arm and was look­ing for a chal­lenge.

As it turned out, Saatchi & Saatchi saw the need to in­tro­duce an em­pow­er­ment as­pect to their busi­ness and looked over­seas to find some­body to head the new ven­ture. At that point Mbanga saw an op­por­tu­nity in the mar­ket and took it. “There was a gap in terms of black-owned busi­nesses in the re­cruit­ment ad­ver­tis­ing in­dus­try. This was in 1998 and black eco­nomic em­pow­er­ment was still a rel­a­tively new con­cept. Peo­ple loved the idea of sup­port­ing small black-owned busi­nesses – es­pe­cially those with women at the fore­front.”

Mbanga bought a 30% stake in the busi­ness and then, armed with a cou­ple of Saatchi clients and a lot of en­thu­si­asm, stepped out into the world of en­trepreneur­ship. In 1998 Ayanda Mbanga Com­mu­ni­ca­tions was launched with four staff. Ten years later it has of­fices in Cape Town, Dur­ban and Jo­han­nes­burg, em­ploys 34 staff and turns over in ex­cess of R100m/year.

Now Mbanga is in line for an­other award, hav­ing been nom­i­nated as a fi­nal­ist in the Ned­bank- spon­sored 2008 Busi­ness­woman of the Year Awards next month.

She’s cer­tainly earned her stripes in the in­dus­try, even though she wishes she’d cul­ti­vated an abil­ity to ne­go­ti­ate favourable terms with sup­pli­ers or con­vince a tricky client to take a chance on the busi­ness be­fore strik­ing out on her own. Ul­ti­mately, that will de­cide whether your busi­ness stands or falls, she says.

For­tu­nately, she’s a quick learner and Ayanda Mbanga Com­mu­ni­ca­tions is on solid ground. Its client base in­cludes Edgars, En­gen, Sho­prite and Heineken. She con­cedes that re­tain­ing clients such as th­ese de­mands an abil­ity to ne­go­ti­ate with the role play­ers and meet ev­ery­one’s needs. But her per­spec­tive is wide enough to in­clude a car­di­nal rule of thumb: run­ning a busi­ness is a con­stant learn­ing curve – par­tic­u­larly in the highly com­pet­i­tive re­cruit­ment ad­ver­tis­ing in­dus­try.

Look­ing ahead, Mbanga says if she wants to re­tain her blue chip clients she will need to con­stantly seek ways to show the value that her busi­ness adds. She says: “Cur­rently, there are in ex­cess of 30 re­cruit­ment ad­ver­tis­ing com­pa­nies in SA. We’re ranked in the top four of th­ese but client re­ten­tion is be­com­ing an in­creas­ing prob­lem due to price wars.”

Mbanga at­tributes much of the prob­lem to the fact that the in­dus­try fo­cuses more on price and less on qual­ity of ser­vice. Her strat­egy? “The plan go­ing for­ward is to show our clients how we can add value to their busi­ness and then ac­tu­ally do so.”

Con­stant learn­ing curve. Ayanda Mbanga

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