• The rule at Mercedes is the customer is king
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Steve Gray learns how deeply the compan) is involved in after-sales service — there ar( even M-B courtesy repair vans operating oi main Continental routes
RCEDES-BENZ, like virtually .ry other manufacturer, is I aware that the simplest part any deal is the initial sale. ;e the vehicle has left the ler's premises, it is all too )n forgotten in the rush to sell ither.
hat is a short-term policy. er-sales service influences customer when he considers next purchase. Poor service n the dealer, even to minor ut irritating — problems, will ldice the operator's view. He tell fellow operators how both the vehicle and the r sales service are and advise
:1-1 against "that b lot". vehicle manufacturer stands lose not just one sale but And the mud sticks,
iting a totally false picture, of vehicle's reliability.
lercedes-Benz spends a great I of time, money and effort to ure that this situation does : occur. It realises the culties facing dealerships, ch are "at the sharp end,"
according to M-B UK's vice manager. Christoph hoff, "The customer is king should be treated as such." 3cause the dealerships are in front line, they are carefully cted. When Thomas Tilling $ organising the MB lerships, there were around 30 outlets in Britain. Now there
are 42 — some with car franchises, too — and about two thirds of the original dealers are still there.
Mercedes prefers its dealers to hold a sole franchise for its products and selects the dealer locations where there is a sales potential. There will be little growth in the numbers of dealers as there is a better profitability with fewer, says Mr Aschoff. Although each dealership is assigned a particular sales area, there is no restriction on the area where they can offer after sales service. Whereas some manufacturers leave it up to the individual company, Mercedes is involved completely in the setting up of each dealership and it recommends they take the M-B dealer kit, which is a package of all necessary special tools, equipment and paperwork such as job sheets, records cards and warranty claim forms.
M-B (UK) Ltd also sets standards for dealers premises. Minimum door heights are laid down. Mercedes has a separate architectural service to help with structural alterations. This is a free service.
At present there are over 50 different projects for the improvement of facilities in progress. The M-B dealership review committee inspects facilities.
M-B area engineers assist dealers with customers' problems. There are both regional and fleet engineers who operate in the three UK regions — Northern, Eastern and Western. Each of these is under the control of a regional manager, reporting direct to Christopher Aschoff.
When Mercedes decides to take on a new dealership it is looking for a high level of commitment. Although it's not a requirement, M-B strongly recommends that the dealer offers 24-hour recovery. The cost of setting up premises is high, but M-B will assist with equipment, by loaning some on a contractual basis.
Fleet operators, too, are taken care of. Monthly meetings are held to update them on technical developments, and M-B hopes for a high standard of fleet workshops.
However, the danger of "moonlighting" by workshop personnel means that not all technical information is passed on to fleet workshops but is reserved for Mercedes-Benz personnel.
Mercedes often gets requests to check workshops for changes and aims to guarantee repairs are carried out according to factory specifications and ideas. The shared experience operators in over 170 countriE is put to use in this respect.
Probably the most importer aspect of service back-up training, and Mercedes-Ber takes it very seriously indee( For Britain, the Haye headquarters have responsibility to suppl adequate training for dealer and operators too. This is free charge (apart from hotels) an includes all written technici information and other necessar material.
All training activities, thouglare co-ordinated from Stuttgar
where the worldwide trainin, centre is located. Her dealership mechanics an' managerial personnel (such a workshop managers) are trainei from those countries withou subsidiaries. With around 65,001 people working on M-E products, in 175 countries, then is a large gap betweer educational levels.
Many have no basic educatior and certainly are unable tc understand diagrams or have knowledge of graphics. Thus E three-day course becomes threE weeks. The centre has a staff o 100 instructors with four bask languages used — German French, English and Spanish Built three years ago, it train& 31,000 students last year. This figure does not include students trained at subsidiaries; foi example, a further 8,800 were trained in Brazil alone.
Mercedes believes training iE important for three reasons First it ensures a greater loyalty to the job. Keeping mechanics up with changes in technology improves their productivity and stops them from getting frustrated. Frustration leads to a high rate of turnover. In Germany, for example, there is a 16 per cent turnover annually, which means every five years there is a complete change of
staff. The annual figure for Mercedes-Benz is better at 12-13 per cent, giving a seven to eightyear turnover cycle.
Mercedes says that after a while the job loses its attractiveness and has figures which show, on average, that a mechanic stays until he is 32 years of age then becomes either a driver, filling station operative or other related occupation. Training they say, helps to cut these losses.
Second on M-B's list is the increased quality of work which results from training and increases customer loyalty to product and organisations. A satisfied customer will be more likely to buy a Mercedes again if the repairs are carried out satisfactorily.
Thirdly, Mercedes realises that the high cost of setting up a dealership means productivity must be high to obtain a good return on investment. A worker who is properly trained will be more efficient and thus more productive. This can be turned into sales investment or to cut unnecessary investment in the dealership. However, efficiency figures vary dramatically, even after training, depending on the country. For example in Europe a mechanic will handle between 0.9 to 1 truck in a working day. In another part of the world this figure drops to 0.09 per day.
The training is organised on the basis that 75 per cent will be mobile, ie that it is carried out on location at local level in the dealer's premises. This is both more economical for M-B (it avoids the cost of bringing 20 people to Germany by sending out just one or two instructors) and also provides the opportunity to train people in known local conditions. The training is free of charge, but the trainees' expenses are covered by the dealer.
At the Stuttgart centre, where the remainder of the personnel are trained, each mechanic comes for some kind of training at least every year. Mercedes reckons that about a third of these productive mechanics then pass on the information they receive to their workmates. Rather than have translations for, say, Arabic-speaking mechnics, M-B uses people from those countries. Slightly different inferences of language are thus not lost.
There are no exams at the end of the courses apart from one for licensing regulations of vehicles. Constant evaluation and feedback from the practical training is used to assess the success of the course, says Mercedes.
For the training programme to succeed, the infrastructure of the service department as a whole must be strong. Mercedes believes that a good product has to have a service system to match it. This is easy to arrange in Germany where there is a very dense coverage of service outlets. Few customers have to travel more than, say, two kilometres to reach their nearest agent.
Other countries are less fortunate, but with the comprehensive Mercedes-Benz organisation, which includes six company-owned vehicle producing plants and 12 of its own general agents, the spread is pretty good.
Mercedes relies heavily on feedback from its service agents, via — where appropriate — its agents' representatives to improve both after-sales and products. Technical information reports, which are filled in by the general agents, show whether a problem is unique to a particular area or there is a rash of them. Warranty claims, too, s good form of feedbacl Mercedes-Benz. Again, the' pinpoint whether a probls local or worldwide. Items% are safety related or, in the of USA and Japan, col emissions, are treated as u1 priority.
Mercedes divides the into eight areas inclu Northern and Southern Eu Near and Middle East and and South America. It nor assigns one engineer country areas, but for placs Iraq, where there is no gs agent, there are 25 peor administer the ser organistion. The aim here keep the vehicles running what may and to rei downtime.
Account is taken of difficulties when settir workshop facilities. Merc Benz also operates a pc mechanics who are mobil can be assigned to a pad area where there is dif with local people. They n there until the problem resolved and the service bi to the standard expected.
For more sophistic markets, Mercedes-Ben; has a package of software the banner of Trans Consultancy, which use Stuttgart mainframe corn These are designed to he operator get the best fro vehicles and includ optimum replacement prc With typical German effi Mercedes-Benz has work( theoretical different route various types of terrain w feeds into the computer. can also add in vehicle fications like axle and gear ; and by cross-reference ;ome up with an optimum fication for an operator I on the type of work done, :led fuel consumption and ill cost. Other programs ide one which gives a ng cost per mile and it can the comparative figures of makes taken over the length of time.
s obvious, then, that the y has done its homework but what about the sharp of the business, the rships themselves? To see two typical UK dealers le, CM visited Euro mercials of Cardiff and :res of Swindon.
; first, Euro Commercials, the brainchild of David )y. Having an idea is one getting it off the ground is er. It took a catalyst in the of Nick Williams of Capital — a local steel company :apitalise the company and Dff the ground.
:k was an enthusiastic des user and with the st dealership 40 miles , at Swansea, saw an tunity to set up one in Cardiff. The present workshops, and indeed sales and parts, are located in an old hangar owned by Capital.
But within the next few weeks Euro will be moving to purposebuilt premises.
David Salway believes the key to succeds is to be flexible, with a relatively small staff and to adapt to the customer's needs. Good service and parts back-up will, he believes, mean more sales. Although Euro Commercials expected it to be an uphill struggle for four years, without making any money for the first two, the company is now after just one year, showing healthy signs.
David has been helped by experienced service and parts managers, and the latter has carte blanche to order whatever and however many parts he wants. At the moment he holds £50,000 worth, but David points out that the excellent road link to Hayes via the M4 means speedy parts supplies. He is a great believer in motivation, and by carefully selecting his people and paying them over the local rate, he is able to generate enthusiasm.
When necessary they will stay on after hours to finish a job. He does not employ clockwatchers. Training has formed an important part, with the three fitters and the foreman having been on four courses each to date.
The new 743sqm (8,000 sqft) premises will have a workshop area of 557sqm (6,000 sqft) and will nominally take six vehicles at a time. However, it will be possible to get 'about 10 mixed vans and trucks in at a time. Capital Trading has invested £300,000 in the new building and the total investment for the dealership has been close to £400,000.
The workshops are to be fully equipped with a brake-drum turning machine and will be capable of every type of repair, except bodywork. David and Nick are convinced that they have the right formula to provide the kind of service they feel is necessary.
A much more established Mercedes-Benz dealer is Oldacre Services of Swindon, although it too has moved to new premises. Part of the Oldacre group, which has two other Mercedes dealerships, it is also a Unimog dealer. Sales currently run at around 300 a year, ranging from vans to heavy-duty tractive units.
The Swindon site represents an investment of £250,000 and employs 22 people. Parts stocks currently run at £70,000/£80,000, and again the good road link with Hayes means quick delivery of parts which are not stocked or are out of stock.
Oldacre's Mike Mudie is convinced that the personal touch is all important. For example, when a new vehicle is delivered, the operator is introduced to the service manager. Home phone numbers. of necessary personnel are published so that the operator can reach them when needed out of hours.
Even in these hard times, Oldacre Services manages to fill its workshops, partly due to its guaranteed cost of servicing. There are basically two schemes in operation, both offering similar benefits. The first, set up by Oldacre itself, is for any make of vehicle, new or used. It has been running for about nine months and there are 30 vehicles — four operators — using it. A price per mile is charged and the operator is insured against all repairs and maintenance for as long as the contract lasts. Oldacre's only qualification is that the vehicle is brought in once a month for inspection, and is serviced regularly — by Oldacre — when necessary.
Most of the vehicles on this scheme are secondhand Mercedes, but there are quite a number of Leylands too.
The second scheme is Mercedes's own, which is in principle the same but is applied to new vehicles. Contracts are for up to five years and the cost is currently 8p per mile. There is an inflation trigger, though, of 10 per cent, which means any rise above that is added to the charge.
At the end of the contract, if any profit is made, it is shared between the dealer (25 per cent), Mercedes-Benz (25 per cent) with the operator taking the remainder. Should there be a loss, it is absorbed by M-B.
The final, and unique, aspect of M-B's service back-up is its TransEuropa Service. A fleet of fully equipped workshop vans patrol lorry routes in Europe and can assist with breakdowns.
They are not confined to M-B Vehicles and no charge is made for repairs.
Mercedes sees it as a "loss leader" in that its high cost is offset by the goodwill generated, which, of course, could result in future safes.