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Success story

9th September 2004
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Which of the following most accurately describes the problem?

Daf Trucks holds the enviable position as well-established

UK market leader. Andy Salter speaks to MD Stuart Hunt

to discover the secret of the company's success.

Call me cynical, but experience indicates that in this business nothing happens by accident. So when one truck brand dominates the market for as long as Daf has — and heads every sector bar one (7.5-tonners, since you asked) — it would be safe to presume it's not down to luck.

Ask anyone outside the firm for the secret to its success and you'll get a range of guesses and assumptions from hard work and a strong focus on customer satisfaction, to having deeper pockets than anybody else and maybe a little black magic. It's probably a combination of some, if not all of these factors (with the possible exception of voodoo) but in an attempt to shed further light on this conundrum,and to see if there's anything the rest of us can learn from Dafs success, the CM interview this week takes us to Daf HQ in Thame. Oxfordshire.

Ten years ago this building housed a massive sales and marketing organisation employing hundreds of people; today that number barely reaches three figures.

Practical man

In previous dealings MD Stuart Hunt has come across as a genial figure, good fun but with an incisive grasp of what's required for the job. There's no reason to revise our opinion based on this meeting. He comes across as softly spoken, yet determined and sees himself as a practical individual. "I'm focused on getting the job done well," he tells us, when attention turns to Stuart Hunt the individual. "I'm not one for discussing the ifs and buts and what might have beens. I take a view that this is the situation we're in today, so let's deal with it to best effect."

Enough of the pleasantries: we attempt to goad him by suggesting that Daf's market leader status simply means its parent company has deeper pockets than the competition. We get a wry smile in return. Have we hit a nerve? No, it's an obvious question and Hunt is well prepared. We expect a brush-off about how Dais parent Paccar has been in profit for the past 60-odd years and it didn't get where it is today by piling 'em high and selling 'em cheap, but he avoids that particular argument for the present.

"Let's park price," he says with a deft shimmy. "It can be important in a deal, but there are other elements. Take our trucks; we're fortunate enough to have good products in every sector, rather than a lemon or two in the line-up affecting overall performance. Furthermore, we've got a stable organisation. "We're also in good enough financial shape that we're able to invest short when we need to address issues in the interests of cultivating long-term customer relationships. I'd like to think we're in a position where our customers will turn around and say 'yes we did have a problem, but Daf turned around and sorted it our.We have a decent reputation for this."

Yes, yes, all well and good,but what about the question: are you doing the deals others daren't touch to build volumes? "Anybody that thinks it's the most important element on every deal is not goingto have a successful business," says Hunt. Our success most certainly isn't just about price. Let me paint a picture: Daf is part of Paccar and its latest results [second quarter of 2004] show a $236m profit before tax in just one quarter! We're a truly international company and Paccar looks for significant revenues from Europe. Sitting where I do it is inconceivable that we would, or could, pile 'em high and sell 'em cheap'. That just wouldn't happen in Paccar. You are accountable for profit, not volume and most certainly not share; we're just not wired up for that."

OK, so price isn't the key to success,but in expounding his views Hunt touched on a few of the ingredients: products, stability, focus and a strong network. Daf's products are wellknown by most CM readers so we won't dwell on them here, instead we'll focus on the other elements.

Since the inimitable David Gill's departure as MD in 1999. Daf has had four MDs in relatively quick succession. In many organisations this would have been a trigger for massive reorganisation as successive bosses attempted to stamp their authority on the company. From the outside looking in, this doesn't appear to have been the case.

Focus Likewise the end of the block exemption ruling hasn't meant a massive re-shaping of the dealer network. "Our competitors have been reorganising themselves and their networks," says Hunt,"and it takes the eye off the ball. Our focus has continued to be on selling trucks and parts, and building our relationship with our customers.

"Just four dealers have joined our network since the ending of block exemption and there's another six in the final stages of possible appointment. I see all those prospects who are getting near the final hurdle to impress on them the strength of the organisation they're joining. We don't want to be fighting each other; it's a partnership and we want to encourage people to make some money out of carrying the Daf flag over the door."

The independent dealer network is a cornerstone of the Daf organisation and despite moves by many rivals, often out of necessity, to get involved in owning their own network or decoupting the sales and service offering of dealers, Hunt remains committed to the status quo:"We sell through an independent network and we feel that works for us. It adds value to our proposition. We strongly believe that the same organisation selling the product and then accountable for giving strong levels of back-up is the right one for us.

"Decoupling sales from service wouldn't work for us. In my view you lose the link between sales and service and they do go together. Our dealers take ownership of the process and that's the key to the success. Increasing the manufacturer's presence in the network wouldn't work for us."

We spent two hours with Hunt for this interview and while we clearly haven't walked away with a simple Guide to Success in Truck Sales we are a bit closer to discovering why Des market success is sustained. The answer is simple it seems. The company is focused on and dedicated to its core activity, selling and servicing trucks to and for its customers.

The last word rests with our interviewee: "You have to know what your business is and stick to it. Some of these 'nice to dos' can send you off down a track that maybe you don't want to.The secret of Dal's success? It's about trying to keep the business focused and as simple as possible.

"Our job is to focus as much of our attention on selling trucks and parts profitably and looking after our customers. That is very much ingrained in the culture of the company." •


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