The 211-site network – it added its latest centre in Slough this month – is still looking to grow, and rapidly if the right opportunities emerge, but is putting more focus on raising profits (2005: £5.7m, forecast to rise to £6.8m last year). Key to this is increasing business from existing customers, attracting new customers and raising productivity.
Chief executive Duncan Wilkes, who headed a £49m MBI for Nationwide last February, says: “We saw a business that had been put together quickly through acquisition – that had been the priority of the previous management. Now we want to take it to the next level.”
Wilkes wants to raise customer retention from 43% when he started to more than 60% by 2008 by exploiting customer databases and improving service levels.
One quarter of the network has been mystery shopped to uncover good and poor practices, while customers have been surveyed via focus groups to provide a better understanding of their needs.
A customer skills programme was set up last year to train staff who have contact with car drivers, including receptionists, managers and mechanics – 450 have completed the course so far. A set of ‘golden rules’ dictate how they treat customers. Retention has already risen to 47%, while complaints have been halved to one per 1,000.
Last year Nationwide increased fleet business by 13% and retail by 8% and it wants more this year. “We are hungrier for fleet business than dealers because of the rates that fleets operate at,” says Wilkes.
Affinity programmes – Nationwide has deals with AA, Tesco and More Than - will help to grow business. An internet booking scheme launched in September is already bringing in £50,000 of repair work each week from some 300 customers, 70% of which are new to the business.
Productivity is the third part of Nationwide’s strategy. Last year the number of jobs per mechanic rose by half a job per week (Wilkes won’t reveal totals), and the target over the next three years is to raise output by another two jobs per mechanic per week.
Bonus incentives will drive the improvements, while Nationwide is also investing in its infrastructure and tools to provide better conditions for staff to raise efficiency. It spent £1.3m last year and has earmarked £1.8m for this year.
Wilkes is also looking for further network expansion. “It doesn’t get controversial until we get to 350 sites minimum,” he says.
“When we look at the demographics, the UK will sustain 500.”
His timescale is “as fast as we can”. Adding single sites will grow the network by around 20 per year; but the preference is for larger purchases. Wilkes, who has just issued a press release advertising the fact he is looking to buy, claims there are 99 chains – businesses with more than three sites – in the UK: some of these would accelerate growth.