5

New model: Can the TrustFord formula work for housing providers?

BUSINESS CONNECT / TRUSTFORDBUSINESS CONNECT / TRUSTFORD

ABOUT

Business Connect was launched by HouseMark in 2013 and aims to help housing providers to gain insights into the operations of successful businesses in other sectors. The ambition is to challenge social landlords to use these visits to public and private sector organisations to unearth new ideas and better ways of working, which can then inspire their own business planning process.

TrustFord is the world’s largest Ford dealership, selling 93,000 vehicles in 2013. It implemented a new business strategy in 2012. This publication reports on the lessons from a visit by HouseMark members to TrustFord in December 2014.

Ford refocused

Contents

Since emerging from the ‘tough years’ in 2012, the world’s largest Ford dealership has built a unified brand, new innovative spirit and customer-driven ethos. Business development director Tim Bundy explains the change of gear

ight HouseMark members have come to an unassuming office on a quiet industrial estate on

the edge of Hemel Hempstead. You would never guess the beating heart of the world’s largest Ford dealership lies within. The only slight clue for the sharp-eyed is the row of brand new Ford Kugas gleaming in the car park, but this is as far removed from a typical car dealership as you could imagine. Blink and you’d miss it.

One thing you certainly don’t miss once inside, however, are the huge letters spelling out “TRUST” sitting against the wall in the reception. “A legacy of our marketing campaign when we rebranded last summer to a single brand: TrustFord,” says Tim Bundy, TrustFord’s business development director.

Something else that makes an impression is TrustFord’s performance. Like all UK car dealerships, it may have had a tough few years during the recession when new and used car sales dipped, but for the past two years it has been growing. Its turnover in 2013 was £1.2 billion as a result of selling 93,000 vehicles and providing almost 1 million hours of vehicle servicing from its 68 UK locations (it doesn’t do all this from its Hemel Hempstead HQ …)

These figures make it the seventh-largest car dealership in the UK, despite the fact that its rivals sell all makes of new cars, while it only sells

Fords. TrustFord does, however, sell all makes of used cars.

Competition is fierce, so what can social landlords learn from a sector where margins are so tight that customer loyalty can often be the difference between the profit fast lane and the road to ruin?

Perhaps unsurprisingly, even if the social housing sector is less competitive, HouseMark members are very keen to hear more about customer experience and how such a large organisation manages to maintain a consistent approach, whether the customer is talking to a sales person or a mechanic (see “Driving Lessons” box on pages 5 and 6).

Bundy admits that a tendency towards short-term thinking – “Are we going to hit the sales target at the end of the month?” – perhaps meant that TrustFord did not always make the most of the opportunities its scale and expertise present. However, this all changed in 2012, as the business emerged from the “tough years” of the recent economic slowdown. “We sat down in 2012 to create a more coherent vision and define our primary offering,” says Bundy. “So we set out a vision to be driven by our customers – we wanted to make it easy for customers to buy and own a Ford. That became our mantra, and determined what we did.”

As part of this process, TrustFord’s senior management team set five strategic goals that are “vital for our

success” (see key learning points). Each strategic goal is the personal responsibility of one of the seven TrustFord board directors – Bundy’s is “fostering a spirit of innovation” (see later articles for the other four). “We will measure this by checking whether by the end of 2015 we deliver 10 per cent of our profits through innovative activities,” he explains. “So that means things we weren’t doing when we started this programme in 2012.”

The ideas that Bundy champions will be a mixture of those from the senior leadership team – such as, from the start

of 2014, offering to service any vehicle, not just Fords – and ideas from the “grassroots”. To achieve this latter aim, Bundy is currently sifting through more than 250 suggestions from colleagues from a pan-business ideas scheme launched last year through the intranet and in paper form – he’s keeping the good ones a closely guarded secret for now though.

Innovation doesn’t stop at ideas for generating more income though. Bundy and his director colleagues are also keen on becoming more efficient wherever

possible, and one key area is energy consumption. In addition to policies around working with suppliers, employees and customers, each of the company’s dealerships now has a target for energy reduction and an “energy champion” to ensure this is delivered. In 2014 these efforts delivered a saving of more than 850 tonnes of carbon dioxide. Bundy says proudly: “Our three biggest areas we are looking at are: gas, electricity and vehicle fuel usage. We have made some fantastic savings that are really driving us in the right direction.”

The power of loveIt’s more important than ever to build an emotional relationship with customers

At your serviceThe key to after-sales is the “wow” moment

Driving lessonsWhat HouseMark attendees hoped to learn from TrustFord

Quick on the brakesFinancial rigour and effective cost controls are at the heart of a bold plan to boost shareholder returns

Ready to overtakeHow TrustFord is preparing to race up the Best Companies list

32

E

“

1

4

5

5

6

7

Key facts

TrustFord is owned by Ford and has 3,000 employees, mainly in England, Northern Ireland and the Channel Islands

The company sold 93,000 vehicles in 2013 and provided just under 1 million service and bodyshop hours

It replaced various local brands with the single TrustFord brand in the summer of 2014

TrustFord’s history stretches back to 1911 with Bougourd Brothers in Guernsey. They imported Model T Ford kits from the US and built and distributed the vehicles.

Key learning points

TrustFord has five key strategic goals:1. Deliver outstanding levels of customer experience2. Be recognised as an employer of choice3. Foster a spirit of innovation4. Be recognised as a good corporate citizen5. Achieve top quartile performance and enhanced shareholder value

Each of these aims has a specific measure, agreed by the board. For instance, being an “employer of choice” means being one of the Sunday Times’ 25 Best Companies to Work For by the end of 2015.

We wanted to make it easy for customers to buy and own a Ford.

That became our mantra, and determined what we did

Phot

o: S

imon

Bra

ndon

Supported by

54 BUSINESS CONNECT / TRUSTFORDBUSINESS CONNECT / TRUSTFORD

The power of love At your serviceCelia Pronto has built a 21-strong marketing team over the past three years, with the aim of forging an emotional bond between dealerships and their customers

After-sales managing director David McNamara is not interested in merely fixing customers’ cars – he wants to offer them a window into the mechanic’s world

Do you love your car dealer?” asks TrustFord’s marketing and e-commerce director, Celia Pronto, gazing at her

audience. It may sound incongruous, but this question is at the heart of TrustFord’s marketing strategy and of Pronto’s attempts to realise her strategic corporate goal of “being a good corporate citizen”.

“When I started in the business three years ago, my role didn’t really exist,” says Pronto. The 48 different dealerships all had responsibility for their own marketing budgets and there was no central marketing function to speak of.

To achieve the goal of becoming a “world-class retailer” and with the backing of the board, Pronto set about building a 21-strong marketing team that would be run centrally, but based around the country to support the dealerships. Pronto not only built this team to help the business achieve more, but did it within the existing marketing budget. Now it was time to help people feel the love for Ford.

“We did a lot of work to inform this,” she says. “We wanted people to have a relationship with a Ford badge and when they wanted to buy a Ford they would walk through our doors. When they walk into a dealer, what is it that creates that emotional relationship? What came out of this was that people wanted us to make it really easy for them. If we did, they would come back to us again and again.”

Pronto set out four key areas to ensure her team helped the dealerships achieve this aim. These are: building customer trust; making sure people feel the approach taken to them is personal, not contrived; being the most knowledgeable about Fords; and leveraging TrustFord’s scale to provide the best and most convenient service for customers.

Shaun Holdcroft London regional director, Hyde

We are just going through a piece of work looking at some changes

to our business model – particularly how to refine the service we offer to our customers. We are not that dissimilar to the car industry, in that we have a high-value product that people get very

excited about purchasing, and we offer a number of after-sales services that people generally are a lot less happier about. There is a big difference between the way the customer approaches the upfront purchase and the ongoing relationship. It is difficult to get satisfaction from calling a plumber to fix a leak. People would rather buy a nice meal or bottle of wine…

Nicola Hobbis Senior HR partner, Bromford Group

For us it is about what we can learn from other sectors, particularly the

top commercial organisations. I am interested in how TrustFord handles complaints – especially via social media. I am interested in how it uses technology in general to improve its business.

Nigel Barnard Executive director of operations, Westward Housing Group

We are doing a lot of work at the moment around customer

experience, incentivisation, etc. We are looking at what the commercial sector offers in these areas and at what we can pick up and translate that into our sector.

t’s a common experience at any car dealer: you drop your car off in the morning for a routine service and get a

phone call at lunchtime telling you the mechanic has found something more serious and it will cost an extra £500 to fix. You are annoyed, but have little choice other than to give the go-ahead for the work required.

David McNamara, TrustFord’s managing director for after-sales, recognises this frustration for customers and appreciates that it is not great for business. “The biggest issue here is ensuring that our customers know they are getting value for money,” he says, adding, “When you get your car serviced you don’t ever really see the value of what it is you are having done to your vehicle.”

There is a clear parallel here with the experience of housing professionals keen to improve the customer experience they offer, set against the tedium for tenants of initiating a housing repair. McNamara has an idea to change all this though for TrustFord and, like the pitch of any good salesman, it is one that will work on several levels and help create

the “wow moments” he wants customers to experience.

“I’d love to be able to give our customers more of a window into our world through video,” he says. “We could record the inspections we do for our customers and show them: ‘Here is the good, here is the bad’. If need be, the technician can to talk

to them about their car while it is up on the ramp.”

The idea of a FaceTime video phone call from a mechanic might not work for everyone, but it doubtless would for many, and this is McNamara’s point, as he tries to deliver on his corporate goal of giving an outstanding customer experience.

Pronto adds that to be able to deliver this, TrustFord must understand its customers and what makes them tick. “I’m not just thinking about the fact I’m selling you a car. If you are a mum I might be selling you safety, as that is what you care about for your family. If you are servicing a van, you care about productivity.”

A crucial final piece of the marketing jigsaw was the decision to rebrand the company to TrustFord last summer. This was no mean feat as the business had grown from its early days in 1911 as a collection of dealerships with strong local identities. However, Pronto stresses that the business had to better realise the strength of its scale. “We spent time understanding what makes us tick and how we want our customers to feel,” she says. “We couldn’t have delivered the rebrand as quickly as we did if we hadn’t had those internal fundamentals against which to make our decisions.”

Underpinning all of this, and in addition to its regular customer satisfaction surveys, Pronto’s team has undertaken research on the steps and thought processes that people follow when buying a car. As a result, Pronto is able to make two key points. First, that people are increasingly happy to research and buy cars online – TrustFord sold 1,900 cars this way in 2013. Second, that although “as recently as two years ago people were going to eight or nine dealers before buying a car, now it is down to one or two”. If a customer loves their existing car dealer, guess where they will go?

“We want to ensure our customers want to come to us and also recommend us to their friends and family,” he says. “Wow” moments, allied to investment in state-of-the-art technologies and a variety of practical, additional services (see key learning points), are McNamara’s ace in the hole.

A “wow” moment, McNamara explains, is when “a customer comes in and thinks ‘Oh, I’ve never had that before’, and it is the kind of thing that comes up in conversation when they are talking to a friend”. He gives an example of a salesperson who saw that a customer’s disabled young son was fascinated by a particular car in the showroom and offered to take the boy out for a spin. Efforts such as these are now recognised through the TrustFord company recognition scheme, Moments of Truth (see page 7).

For McNamara the future of his business is clear: “You have got to innovate. If you stand still in this industry, you will eventually go backwards.” If TrustFord did housing, you suspect video-taped repairs to a leaking communal roof would be just round the corner.

“I

Key learning points

TrustFord has not shied away from reorganising its business structure in order to ensure it can deliver its strategic aims. The introduction of a central marketing team and the rebranding of the business were big steps, but crucially the company carried its staff with it when making these changes

In addition to “good corporate citizen” policies for working with suppliers, employees and customers, TrustFord also supports a number of charities. In 2014 it raised £60,000 for Cancer Research to fund a specific piece of equipment

TrustFord now actively encourages customer complaints in person, on paper, by email or social media. Pronto’s team collates these complaints, ensures they are dealt with and that any trends and lessons are acted on.

“

“

It is difficult to get

satisfaction from calling a plumber to fix a leak. People would rather buy a nice meal or bottle of wine …

What came out of this was that people wanted us to make it

really easy for them. If we did, they would come back to us again and again

David Hingley Researcher, Campbell Tickell

I’m interested to hear from a different sector and one that I

know very little about. I want to hear ideas about how TrustFord works and also what other approaches housing providers are taking.

DRIVING LESSONS WHAT DID ATTENDEES WANT TO TAKE FROM TRUSTFORD’S APPROACH?

Phot

os: S

imon

Bra

ndon

Key learning points

In addition to investing heavily in equipping its mechanics and technicians with the skills and modern kit they need, TrustFord offers a variety of other car-servicing features to appeal to customers:

– Mobile servicing: “We are looking at how we can go to our customers to service their vehicle”– Smart repair: to fix scuffed alloy wheels– Brakes for life: free brake pads in perpetuity for all customers who buy a used car, whether they are a Ford or not.

76 BUSINESS CONNECT / TRUSTFORDBUSINESS CONNECT / TRUSTFORD

Quick on the brakes How to overtakeFor finance director Stuart Mustoe, the key to boosting shareholder returns is a rigorous approach to cost controls – and always being ready with a plan B

With revamped recruitment and staff-engagement strategies, TrustFord is hoping to surge up the Sunday Times’ Best Companies list

ocial landlords are now very accustomed to the phrase “stress-testing”. Yet while, for many housing associations,

this remains a largely hypothetical exercise in exploring the resilience of the business should interest rates suddenly rise or a development go wrong, for TrustFord it is imperative.

“The margins in our industry are tight – around 1%,” says Stuart Mustoe, finance director at TrustFord. “Our plan in 2015 is to grow our volumes, and in our budget discussions we have been going over what happens if those volumes aren’t there. You always have to have a plan B. If the market toughens, what can we do?”

For Mustoe, finance director in a business where daily cashflow requirements can, in busy periods, fluctuate by £40-50 million in a matter of days, that means cutting costs and quickly. He says that variable costs such as training are one option, although even this is not easy, as “management training and leadership training – they are the things that are going to drive your business”.

Mustoe says the business simply has to challenge itself honestly as to whether it

can afford a particular investment. “If a business can do this, it will always have a plan B to adopt, he says. “For us, it’s not, ‘Oh dear, the market’s gone – what are we going to do about it?’ We will be ready to execute plan B if the market takes a turn.”

Such financial rigour will be music to the ears of TrustFord’s main investor, Ford Motor Company itself. Mustoe has responsibility for delivering the last of the five key strategic goals (see page 3): achieve top-quartile performance and enhanced shareholder value. The measure of success here is delivering a 25 per cent return on shareholder funds invested by 2016. Growing the profitability of the business and increasing turnover is at the heart of this.

Having been at TrustFord since leaving university 17 years ago, Mustoe is now in charge of a 170-strong team at nine UK locations. He is confident that he and his colleagues have done all they can to ensure that the company’s various operational teams have the financial knowledge to be able to control costs and act quickly if required (see key learning points). Indeed, knowing all the work he and his team are doing in other areas of

Leander Cox Head of customer experience, Peabody

We are doing a complaints strategy and a customer

contact strategy at present. Also, I am looking at customer experience and I am visiting a variety of businesses to find ideas of how to influence

the Peabody customer experience. We are now trying to be more commercially focused. Great brands like TrustFord and the ideas they have show us that it isn’t just about housing for us. It has to be about the brand and customer perception of that and your performance.

Chris Withnall Development and assets director, Bracknell Forest Homes

I went on the Greggs and Birmingham Airport visits

last year, both of which I found very interesting. We are looking at our service offering at present. In the housing sector, you can provide a good, excellent or

less good service, but it is not differentiated by price. What we charge for our product is controlled so why do we do what we do? What generates customer satisfaction?

John Hinchliffe Financial controller, Bromford Group

I just want to have a look at other businesses and see what makes

appy staff equals happy customers equals happy profits – that’s our mantra,” says Celia Pronto, TrustFord’s marketing

and e-commerce director. It sounds simple, but Pronto and her fellow directors have spent many hours deciding how best to ensure TrustFord’s 3,000 employees do the job with a smile, not a frown.

Pronto says: “The HR team’s strategic target is for TrustFord to be recognised as an employer of choice. The goal is for us to be listed in the upper quartile of the [Sunday Times’] 100 Best Companies mid-size list by the end of 2015.”

In the most-recent survey, published in early 2014, TrustFord finished just outside

the top 100. However, Pronto is confident the work the company has undertaken in the past two years will see it break into the 100 in the 2015 survey and make the top 25 in 2016. What this has meant in practice is working closely with consultants from Best Companies – the organisation behind the lists – to understand where TrustFord needs to improve its performance and, crucially, how to do this.

Many housing associations may feel this approach is old hat, given they occupied nine of the top 10 places in the 2014 list of the Best Not-for-Profit Companies. Yet TrustFord’s zeal for the task is impressive. It has conducted a number of surveys of all of its staff and meticulously pored over

the results to identify not only areas where it can improve that will score highly in the Best Companies assessment, but also other areas that are important to its staff.

“A key insight was that we found that sales managers and service managers – the glue in our business – were really key in driving engagement. Yet they were not

the business, he jokes he has “the easiest of the five strategic goals”.

A HouseMark delegate asks what Mustoe sees as the biggest risk to the business. Mustoe considers this for a few moments before replying: “Product. We have all our eggs in one basket with Ford, so if we haven’t got the product, we haven’t got a business.” He then adds with a smile: “But we have an excellent new Mustang 2.3L Ecoboost coming through that we’re all pretty excited about!”. Stress, what stress?

ensuring employees in their teams were as engaged with TrustFord as they might be,” says Pronto. As a result, TrustFord has focused on its “organisational clarity” – stripping out initiatives to leave only what is most important – and on committing its managers to ensuring that their teams are engaged with the wider business.

An important step in carrying teams with it is the company’s Moments of Truth employee recognition scheme. This launched a few years ago to encourage a focus on better customer service, both internal and external. It has now been refined to encourage colleagues and customers to highlight exceptional customer service and culminates in an all-expenses paid break at a luxury hotel for those staff voted best of the best.

In addition to working with its existing staff to boost engagement, Pronto adds that TrustFord has overhauled its recruitment process. Finding and keeping good mechanics and sales people is particularly difficult. Although sales staff are paid upper-quartile salaries, they are expected to sell 180 cars each year, or 15 a month. Recruitment now includes an online assessment, a visit to an assessment centre and – only after these steps have been passed – an interview with a prospective manager. There is also a new induction centre that runs programmes for two or three days for all staff and up to eight for sales staff, as they complete their Financial Conduct Authority qualification to sell car finance packages.

Is it working? Although the induction programme only began in October, turnover among new recruits is lower than before. Perhaps most encouraging for Pronto, however, is the sales performance: “Our new recruits are already selling 15 cars a month and performing at a higher level than those who were in the business already.” Happy profits can’t be far behind.

S

H

Key learning points

Mustoe has 170 accounting staff, 50 of whom are currently in training of some form or another. This is part of Mustoe’s goal of “growing our own” qualified staff

Newly qualified accountants can be seconded to Ford, if there is no job available at that point at TrustFord, and vice versa

“We talk to other automotive groups to find out what they are doing. It’s not ‘show me yours and I’ll show you mine’ as we are sharing efficiencies on processes and trying to reduce costs.”

Key learning points

Moments of Truth, the company-wide employee recognition scheme, has recently been refined to encourage colleagues and customers to highlight exceptional customer service. The 12 people who receive the most votes in each of TrustFord’s regions win a celebratory night for them and their partner at Walton Hall Hotel in Warwickshire, hosted by the TrustFord board

An annual one-day conference is held every February for the 600 most senior people in TrustFord. Last year managers were asked what wowed and what confused them about the business; the conference addressed the problems and promoted the successes.

““

Great brands like TrustFord

and the ideas they have show us that it isn’t just about housing for us

Sales managers and service managers are really key in driving

engagement. Yet they were not ensuring employees were as engaged as they might be

them tick. I want to see what their ideas are and what might work for our business.

Ben Ward Change and reward manager, Wakefield and District Housing

I’m the same as John really. I want to see what we can learn from

TrustFord and take back.

DRIVING LESSONS WHAT DID ATTENDEES WANT TO TAKE FROM TRUSTFORD’S APPROACH?

Phot

os: S

imon

Bra

ndon

5

HouseMark is the leading provider of integrated data and analysis, insightful knowledge transfer, high-quality consultancy support and, via Procurement

for Housing, cost-effective procurement services to the social housing sector. More than 950 housing organisations are HouseMark members, and we are

jointly owned by the Chartered Institute of Housing and the National Housing Federation – two social housing sector not-for-profit organisations that

reinvest their surpluses into the sector.

Business Connect delivers its programme through a mix of business study visits, leadership interviews and networking and shared-learning opportunities.

The programme allows delegates access to high-performing, successful and inspiring businesses at a senior level to learn about new business models, ideas

and opportunities. Organisations working with Business Connect include Capita, The NEC Group, Timpson, Greggs and Nissan. For more information,

please contact manveer.hundal@housemark.co.uk or call 024 7646 0500.

Campbell Tickell is a supporter of Business Connect.

www.see-media.co.uk

Designed and produced by

001_digital002-003_digital004-005_digital006-007_digital008_digital