Lex Autocentres: the Art of Delivering Results

By any measure, Lex Autocentres has to be considered an aftermarket success story. It was launched 20 years ago. Yet due to the issues of the modern car, vehicle technology, customer demands and competition from the saturated yet fragmented garage infrastructure, many people in the industry doubted that Lex Autocentres(Lucas Autocentres at the beginning) would be able to develop a quality, national, all makes service chain, let alone successfully compete in the sector. They had no captive customer or vehicle technology intelligence at all.

But research demonstrated that the industry in general suffered from a poor image and lack of customer confidence, and this created a strategic window of opportunity. At its launch the aim was to create and develop a clearly defined brand in the retail aftermarket, becoming the consumer’s first choice for the vehicle parc aged 3-10. The business was given a strong strategic focus on value added services, concentrating on the core activities of vehicle servicing, MOT testing, engine diagnostics and clutch replacement. Unlike the Halfords Garage concept, the business was kept simple, operating from a low cost base but, was totally dedicated to delivering unmatched value.

The vision was for Lex Autocentres to become the undisputed market leader in the retail sector of the vehicle repair industry, in a business environment where people would trust each other, feel valued and be rewarded for their contribution. This being achieved by carefully choosing the customer and exceeding their every expectation. Having a narrow, clearly defined focus was crucial to dominance in their chosen sector.

People – Service - Profit

The strategy for the business has remained consistent over the 20 years and success can be attributed to the philosophy behind three words - People-Service-Profit and importantly, in that order.

It was considered critical to develop a strong people culture where the buy-in of staff was essential. Research told them that the market was one of the poorest served in the retail service sector. Therefore operational strategies needed to be customer orientated. Everyone else could be average but Lex Autocentres had to be different by being better. The combination of people commitment and customer loyalty would then result in profit.

Customer Retention the Single Most Important Aim

A lot of companies talk about people cultures. So what makes Lex Autocentres different? For a start every single employee in Lex Autocentres recognises that customer retention is the single most important aim. As a Company they have a goal; to give the best customer service in the vehicle repair industry. The achievement of this goal has been dependent on each employee’s commitment and understanding based on trust, responsibility and involvement.

They expect every employee throughout the company to set the highest personal standards especially in dealing with the customer and never letting them down. The measures of success are no customer complaints; a stable, effective, committed and rewarded work force; cost effective customer growth through loyalty and recommendation and being recognised as being ‘better than other garages’.

Gary Turner, Managing Director of Lex Autocentres says,

"I am a strong believer that people develop and grow organisations, not blueprints. Strategies only deliver promises, people deliver results. Without trust and confidence in people, customers will not buy from you however good your prices, product or services. People buy people first. The relationship is the key component the customer buys. The customer needs to feel warmth, friendship and be liked – (comfort and trust) - accepted and understood – (confident and satisfied) - treated well and correctly".

On-Going Training

Building a people culture is a continuous process beginning in Lex Autocentres with induction and securing their staff’s vested interest in the business as they embark upon their career. Ongoing training is then provided through Lex Autocentre's own ‘Academy of Learning’ - accredited by the Institute of the Motor Industry as an assessment centre for technical, managerial and customer care NVQ’s.

The Academy includes a dedicated technical training school, workshop and call centre. Combined with an infrastructure of mobile highly skilled technicians means the answer to the technical problem is not far away. Technicians are like sponges for information and the company’s ‘Passport to Knowledge’ technical training courses are always full. Courses are continuously updated and cover all the latest technology including electronic fuel injection, ABS, engine management systems and diagnostics.

The culture also encourages employees to develop and provides a progressive path of career development from the position of Trainee to Director. Indeed, most of the senior managers in the company have developed through the company. Clearly, this culture, knowledge and the stability of senior management through times of company ownership change has been an important ingredient of their success, and they believe that the investment in people has clearly given them a competitive edge.

Creating Customer Loyalty by Niche Marketing

How do they create customer loyalty? They aim to capture and retain the customer not their car, so that regardless of what car they own, they will use their services. The quality standards of the customer must always be met. But they recognise that this does not just happen by itself. It has to be managed. They also work very closely with authoritative bodies such as the Office of Fair Trading and Department Of Transport to ensure conformity and ‘approval’ of their systems.

Gary Turner says,

"It is my belief that businesses cannot be all things to all people and succeed. The winners in this competitive environment are the ones who are capable of identifying, understanding and meeting the needs of specific groups of profitable customers who have the greatest propensity to use their services, and not just the businesses who are able to invest in facilities and equipment".

Customer Driven Systems

Having identified the target customers, success then depends on being able to combine all the elements of customer service such as menu priced services that include the costs of labour, parts and VAT. Being right first time is also important; every time; with guaranteed levels of performance from polite, helpful staff at clean, smart workshops that exceed their every expectation.

All systems need to be customer driven. It is no good providing a product or service that a customer does not want or need. Customers want the solutions to their problems and this is the first step to their retention. Lex Autocentre's have always undertaken research as a means of involving the customer and establishing their needs. Over 40,000 randomly selected, questionnaires are sent out each year to gain valuable feedback on their behaviour, intentions, service experience and reaction to new business ventures. This information is critical to monitor movements and is used by the business to formulate future customer strategies. Research has proven that trust is a prerequisite to retention with price, clean surroundings and convenience also being of relative importance.

Guarantees Promote Trust

Lex Autocentre guarantees promote comfort and trust and are probably amongst the best in the industry. They recognise that accountability is key in the service and repair market and the ultimate test of their abilities is the degree to which they will guarantee their work. If they miss any part of their 80 point service schedule they will complete the service and make a full refund -a guarantee of trust. If they fail to diagnose a problem correctly they will either not charge the customer or alternatively, if payment had been received, a full refund would be made - a guarantee of comfort. These are in addition to labour, parts and price guarantees.

Overall, it has been proven that Lex Autocentres are a near perfect fit with their target customer’s expectations - 96% stating that they would use them again with nearly 70% considering Lex Autocentres as being ‘better than elsewhere’. Impressive statistics but with room for improvement if they are to achieve their aim of 100% retention.

Entering the Fleet Market

Since Lex acquired the business in 1993, they have over doubled the number of centres to 141 with a loyal customer base of approximately one million. Having clearly identified their customers, they have continued to grow organically using catchment demographics as a means of maximising their success. So why did Lex Autocentres enter the fleet market, especially as the business had such a strong, strategic, retail focus? Indeed, many doubters believed Lex Autocentres were not capable of competing in this arena, and the company initially chose not to. But as the business developed and successfully proved its infrastructure was suited, it became more appropriate to consider such opportunities.

With some two and a half million vehicles registered to companies, over £1.2 billion being spent on servicing and mechanical repairs and an increasing trend in fleet operators seeking to reduce their vehicle maintenance costs, it was evident that an additional profit stream could be developed. With a national coverage and all makes/low cost base operation, technical skills and a high standard of customer service and workmanship, Lex Autocentres were perfectly placed to not only enter, but successfully compete at the highest level in the fleet aftermarket sector.

It is true that the needs and demands of the fleet customer are different to those of the retail. In fact, it is more difficult as in effect there are two customers that you have to satisfy - the vehicle owner and the fleet operator. Fleet operators now have their own customer satisfaction measurement criteria, which has to be met. But the days are long gone when you simply had to strike a deal with the fleet operator to guarantee their business. Fleet car driver dissatisfaction can destroy that relationship. Accepting this and the Lex Autocentre aim at again being judged ‘best’ they were selective which Lex Autocentres would be best positioned to deliver the expected levels of service. And due to the demand and success, two dedicated ‘Fleetcare’ centres were opened with specifically recruited and trained staff.

As they are a centrally driven business, they are able to guarantee an operational standard that meets with the needs and expectations of the fleet operator. Already they have proof that this new development is generating a new profit stream to the business through a result of very high customer service indicator reports. Another example of People-Service-Profit.

RAC – a New Opportunity or a Cross to Bear?

The future for Lex Autocentres looks good. The acquisition of the RAC by Lex might offer a further opportunity for autocentre branding as well as a loyal customer base. Whether we will see RAC Autocentres will likely depend upon the reaction of the RAC’s existing corporate clients – particularly those vehicle assemblers using the RAC for on-the-car breakdown schemes. They might see RAC Autocentres as a threat to their own parts and service programmes and would not be keen to publish the brand as a quality brand to trust. And owning and maintaining the ethos of a motoring organisation might be difficult if it is also seen as a retailing brand. A balanced approach will be crucial if the value of the brand and the loyal customer base is not to be destroyed. It could become a difficult cross to bear. (8/99)