Brand portfolio

JB: Your brand mix mirrors the market share of manufacturers you partner with.

RF: Yes, but it doesn’t mean we only have large market share manufacturers, we will probably have more of them. What we’re trying to do is keep perspective. I’m not really interested in what the market share is today, but what the market share is in five years’ time.

JB: You’re confident you can make that prediction?

RF: No, but you’ve got to try your best. We made a call five years ago as a team that we thought Hyundai would succeed in the UK and so we took on the franchise. If you look at the product coming out of Ford there isn’t a man in the world would bid against the company and there are some fantastic General Motors’ products. So you’ve got to pick your moments haven’t you?

JB: Why did you pick Hyundai and not Kia?

RF: No real reason. It could be part of our business. Kia is a great franchise. Its aftersales absorption is increasing rapidly.

JB: How will your brand portfolio develop?

RF: In the next five years we’d look to have some specialist marque, a premium brand. We’ll work with a German brand in the next five years. We said for the first five we wouldn’t because I wanted to make sure the company was mature enough to be able to do it. I wanted the confidence the business was mature enough in terms of systems and processes to deliver what the specialist marques want.

JB: Are premium brands more profitable?

RF: They’ve got a high return on sales generally, although not always as it will fluctuate. But their investment levels are high. So the question is, do you get a high return on your investment? And it depends on which franchise and at what point
in time.

Training

JB: Another stated aim of the group is to invest more in training per head than any other motor group in the UK. Is this true?
RF: I have no idea because I don’t know what the others spend, but certainly we don’t skimp on training. We are training fanatics.

If we train everybody, it means we can hold everybody accountable. Most people respond very well to training, so we have aftersales training programmes, management training programmes, sales training programmes. And the training budget is increased every year. If we have a bad month, we don’t cut the training spend. It’s a separate cost centre.

JB: What’s more important, classroom or on-the-job training?

RF: On-the-job training is probably more important. The senior team spends a lot of time talking to people, showing them things, not telling them what to do.

We try to learn from our mistakes using our complaints system. Before a complaint gets signed off I get a report outlining the cause, who caused it, what lessons have we learned and is the customer happy. This is a way for our general managers to learn about root cause analysis, and yes we can improve and that goes for every complaint that we get.

JB: If your training budget goes up every year, is the benefit, the return that you get back, definitive?

RF: Some of it isn’t measurable, some of it is. The direct sales training is measurable, so for example we do 60 or 70 mystery shops every month, with video cameras, to measure the sales process – and it entails each area of the business. If you scored below 40% you’re put on a week’s training.

If you score above 90% you get £100, if you get 95% you get £150, above that, you get £250. Our average scores on mystery shops have gone from 51.5% to 75% in two years.

JB: In which part of the business is the effectiveness of training not so measurable?

RF: The culture. How does the management interact with colleagues? Do they lead? Are they leaders or not? Is the culture right? Are they shouting and swearing at each other? Are they supported? To address this we have started a colleague satisfaction study, which I introduced because it made good sense. It showed that we have strong values and culture within the business.

There were low return rates of the survey from some of the acquired businesses, so I think we need to work on increasing the levels of trust and integration. I think there’s a bit of work to do on aftersales.

JB: If the impact on business culture of training is less discernible would you consider cutting back on it?

RF: I’m not keen because the culture drives everything. The negative effects would show up in customer complaints, in colleague turnover and poor levels of customer satisfaction. I don’t sense that we have a lot of culture issues and I think colleague satisfaction survey backs that up.

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