Keeping up with customers’ changing needs and new ways of doing business is essential for a company’s long-term viability. But the businesses that really thrive are led by CEOs who don’t just want to keep up, they’re always looking to stay ahead of the curve.
Among them is Steve Bonnici. The founder and CEO of Urgent Couriers has adopted an ethos of innovation, diversification and sustainable business practices. Having worked in the courier industry for five years during the 1980s, Steve was in his mid-20s when he backed himself to go it on his own.
In 1989, he founded Urgent Couriers and has nurtured the company through the subsequent economic upswings and downturns. Keeping the business going through tough times has required both nimble thinking and a sustainable business model.
Thanks to developments in technology like email and e-commerce, the last decade has seen Urgent Couriers’ customer base change completely. The delivery of documents between professional services firms once accounted for 70% of business. It’s now shrunk to around 20%.
“Lawyers were once our biggest clients,” says Steve. “Now it’s physical product. You have to change and reshape yourselves to take advantage of that. Diversification has been our mantra for the last few years.”
In 2011, Urgent Couriers diversified into trucks, buying Inter City Couriers with its fleet of four trucks. Now there are ten servicing a growing division dedicated to quickly transporting pallets of product.
In 2014, Urgent Couriers consolidated its Kingsland office and Morningside warehouse into much larger premises in Penrose. The company has introduced a new service to meet the rise in online shopping. Urgent Tonight provides fast and convenient same-evening home delivery for online purchases.
With this purchase of the Penrose warehouse, Urgent Couriers successfully entered the third party logistics market. This new vertical integration of storage and distribution has been another significant growth area, says Steve. Clients include organic soft drink Karma Cola, for which Urgent does all the Auckland distribution, as well as online companies selling cosmetics and tech products.
“Our niche is really those that need fast picking, packing and real accuracy down to individual item picks. Not all are online businesses, some are B2B companies. There’s been a trend away from having your own big shed and making it a variable cost, so you can seasonally adjust your lease costs based on how much storage space you require.”
Despite the imperative to adapt to shifting consumer demands, Steve has stuck to some key non-negotiables. During the global economic downturn, some of his business decisions weren’t the most profitable, but they were based on more than just money.
Among them is his stance on paying his drivers fairly. As contractors, courier drivers receive a fixed percentage of the fee for each delivery, and Steve has long campaigned to change industry attitudes and protect drivers’ livelihoods.
“The biggest ongoing challenge is that our industry doesn’t pay its drivers responsibly,” he says. “Couriers are contractors so they’re not covered by minimum wage legislation. When clients negotiate hard to get courier fees down, they’re effectively negotiating for a pay cut for the drivers. We’ve taken that seriously. It’s probably impacted our growth – and it eroded our margins during the GFC – because we don’t take on clients who aren’t willing to pay enough. That’s been our biggest challenge and a soap box I’ve stood on for a long time. Paying your drivers well is the right thing to do, and it ensures a better quality of driver who likes to come to work and provides a better service.”
Another business fundamental for Steve is environmental sustainability. Urgent Couriers was an early adopter of low emission vehicles and became New Zealand’s first carbon neutral courier company in 2007.
“We paved the way in that area, and it helped differentiate us in a crowded market,” he says. “We’ve also shaken the industry up to the point where there’s now another carbon neutral courier company. If we hadn’t taken that stance, that wouldn’t be the case.”
Urgent Couriers’ innovation extends to its focus on cutting-edge technology. The company has a dedicated development team and builds its own software. It’s unusual for the industry (not to mention costly), admits Steve, but it’s enabled Urgent Couriers to stay ahead of the competition.
In 2011, Steve and his team developed a new cloud-based CRM (Customer Relationship Management) system called Exsalerate. It was originally created to meet Urgent Couriers’ needs but Steve realised it could be an ideal business. Exsalerate combines a range of forecasting, reporting and tracking tools designed to optimise the sales process and improve client retention.
“We needed a reliable CRM system but we couldn’t find what we wanted at a reasonable price point,” Steve explains. “In 2010 when we first started looking, all the CRM systems out there were expensive and complicated. For us, even as an $8-9 million turnover business back then, I couldn’t justify that. I knew there would be other SMEs in the same position so I thought, why don’t we build one ourselves? It can’t be that hard.”
While not initially built as a Xero add-on, Exsalerate has been on Xero’s catalogue since May 2014, and around 80% of sign-ups are now via Xero.
“We wanted to keep it really low cost and not get too technical. But our thinking quickly changed as we realised the power of these sorts of programmes is actually about who you integrate with,” Steve comments.
“Our first test clients were other business owners I talked to who were willing to give it a whirl,” he explains. “Naturally, we weren’t going to sell it to Urgent Couriers’ New Zealand competitors so we took it to some courier-owners conferences in the US and sold it up there. They all said the same thing: ‘we should be using a CRM system but they’re all too complicated and expensive.'”
Revenue from overseas sales of Exsalerate recently surpassed New Zealand revenue. While the exchange rate has played a role, Steve says SMEs understand the Exsalerate structure, which isn’t based around individual contacts but around businesses.
When we built it, we didn’t look at everyone else’s and the features they had or we’d just be a poor relation of existing systems. We built it to satisfy our own needs,” he says.
While it’s still early days, sales are steadily growing and the potential for the software is significant.
Having fine-tuned the system, Steve is finally ready to offer Exsalerate to Urgent Couriers’ customers. He’s also now working with Brendon Cutler, Business Advisory Director at Hayes Knight, to introduce it to Hayes Knight’s clients.
“Steve has a real entrepreneurial outlook,” says Brendon, “but he’s incredibly personable and he cares about his team and customers. He’s always looking to grow and improve his business and this CRM product is just another example of that. We believe that Exsalerate is full of potential, so we’re collaborating on this project and looking at new opportunities through our international affiliates and our contacts with firms in Australia and further afield.”
Steve says this willingness to help businesses explore new opportunities is one of the things he likes most about working with Hayes Knight.
“They’ve always been a really good firm to deal with, and I like their progressive, proactive approach to working with their clients in ways that extend well beyond just doing our annual accounts.”
Steve next to one of Urgent Couriers’ low emission vehicles.