Joel Hopwood and Matt Lee
Learning good business management the hard way.
Joel Hopwood and Matt Lee of Shopper Media Group learned good business management the hard way. They had been running a successful multi-million turnover business when their one major client pulled the plug. They talk about how they rebuilt.
The pair had met at Tesco - owned customer data science firm Dunnhumby, specialising in customer analysis and marketing. They had been there six years and “had a wonderful time”, but had spotted a gap in the market to allow big brands to get closer to consumer at the point of purchase.
No-one was particularly interested in this under-the-radar part of the brand/consumer relationship. Groups such as WPP didn’t cover in-store marketing. Joel says: “We saw it as a good opportunity and thought we should set up an agency, bringing advertising instore.”
They wrote a business plan, resigned on amicable terms with their company (agreeing not to compete) and started their business, from a spare bedroom and with just £1,000 in the bank. They had only been in business a month, had barely finished their website, when they got the ‘golden ticket’ – a phone call from Sainsbury’s asking them to trial their idea exclusively across its stores.
In the excitement, they didn’t worry too much about formal contracts. For some time, this didn’t matter. Says Matt: “We did a few test campaigns for them and the idea proved so powerful that we had £1m turnover in the first year. By year three, we had a team of 30 with office space.”
The idea had been right: “We worked with a ‘who’s who’ of food and drink - Unilever, Mondelez, Procter & Gamble – and they saw it grew their brand sales significantly. The business grew so fast it was like a machine,” says Joel.
There were dissenting voices, however. Joel says: “Our CFO took us on as a retirement project. He was much more experienced than we were, and said we needed to consider diversifying beyond Sainsbury’s, but we were so blown away by the sales and it all happened so quickly, we didn’t want to jeopardise it.”
By year four, they were on track to hit £20m in sales, then they found out they were being fired - by a press release. Matt: “I’d taken a week off to go to New York. It was my best friend’s wedding! We had no contractual protection. They gave us a four-month notice period.”
They had no idea what to do next. Should they send everyone home? They had lots of advertisers with work in the pipeline. They found that their staff had some protection under the TUPE (Transfer of Undertakings Regulations) legislation, which say companies have some obligations to the workforce if they change a supplier, but that didn’t help in the longer-term.
As it was, the group’s chief financial officer had guided them to run the company extremely prudently. They could afford to pay people for a year or longer. Joel says: “We got round a table and said, “let’s do our original plan”. We kept half of the team, while also making It clear they had the right to transfer. We were also clear our plan might not work. But everyone signed up. That was in 2013.”
It worked. They landed a prime deal with Liverpool-based Shop Direct Group, then Heathrow Airport, then Co-op. They exceeded the size of the original business within three years and now have 120 employees, £45m turnover and plans to hit £100m. The group was recently shortlisted in the Sunday Times Fast Track for the second time.
Joel says: “We learned an enormous amount from the harsh realities of our experience. I was an idealist. I was glad it happened the way it did because we grew a much better, more profitable business.” However, it cemented a belief for both of them in the value of ethical business practices and this informs the way the business is run.
Matt says they treat suppliers like customers. “They need us, we need them”. He doesn’t like the traditional larger/smaller company relationship. They don’t use their position to beat up smaller suppliers and both are clear that the relationship needs to be sustainable on both sides. “We always remember those people who were there for us, who were there to support us in growing again, including some of the big name brands.”
This extends to the way they treat their workforce, with clear values running through the whole company. They aim to be flexible, allowing colleagues to find the path and shape their own responsibilities. Joel says: “For us, this is a common sense practice to retain good people. Even where people have left, we have had a lot of lovely letters saying they have never worked anywhere like it.”
The group has now separated into two main group structures – a media buying agency and a media sales agency. It also has a third company, a nascent technology play. Joel describes this as their ‘big bet on the future’ allowing media agencies to do more, faster. He adds: “There is a lot of potential growth here, but it is certainly a huge learning curve.”
Stay honest stay hungry stay foolish have fun – Shopper Media Group
In this episode, Co-founder Joel Hopwood of award-winning retail marketing agency; Shopper Media Group, talks to Nick Travis on how the niche concept came about with business partner, Matt Leah. Joel reveals how the business was built with only just a grand in the bank, as well as challenges faced along the way - equipping them with a healthy amount of resilience.
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