Being the biggest doesn’t always mean being the best. When dealing with large companies, it is often the case that a customer might feel like a mere number buying from a business which isn’t run with their needs in mind.
But customer service is a matter that Northgate takes very seriously. It is by far the biggest player in the van rental market in the UK, but listening to what customers want is very much part of its ethos, says sales and marketing director Jon Tobbell.
The company, which started as Noble Self Drive in Darlington in 1981, has grown through acquisition of regional rental companies.
It became Northgate in 1999 and continued to expand. It now has 72 branches throughout the UK and Ireland, but because it grew by adding many different businesses there has been a focus on establishing consistency.
Tobbell says: “Since the credit crunch we’ve been trying to create ‘one Northgate’. We’ve brought together IT systems, HR, credit control and so on.
“An internal reorganisation in 2012 led us to want to engage with customers more and find out what they really wanted. Every quarter we ask 600 customers across all types of rental for feedback on every aspect of the rental journey, from ordering to off-hiring.
“We conduct a very detailed analysis, which is discussed by the board for a couple of hours.”
He says bringing together what are effectively 31 different businesses has been a challenge, but feels Northgate is succeeding. To ensure customers are retained, he says it has been a priority to communicate to customers exactly what the company does and what to expect when using its services.
“As the market leader we see it as our job to set the standard and ensure users know we’re completely trustworthy,” says Tobbell.
The impact of canvassing hundreds of customers regularly has been an enviable ‘net promoter score’ (NPS),
The customer loyalty metric has risen from 14 to 38, company-wide, seeing an increase of 171%. The average NPS score in the UK is currently between five and 10, according to Netpromoter.com.
Northgate’s regional NPS has risen from 26 to 51, elevating its performance next to some of the best-performing global brands, according to the company.
Vehicles on hire have increased by 4,500 (10.4%) compared to a reduction of 3,300 in 2013.
A 21.2% increase in Northgate’s total customer base was recorded between April 2013 and April 2014. Tobbell says: “We have 800 more customers than 12 months ago. Our customers range from the typical daily rental user, to those who rent vehicles for well over a year.
“A significant number of customers rent vehicles for three years and they see rental as a complete method of procurement. Between 30% and 40% of our vehicles are built to customers’ specifications, as we can supply shelving and racking, as well as speed-limited vehicles.”
He believes the recession has switched more companies on to long-term rental rather than buying vehicles, or committing themselves to fixed contract hire arrangements.
“We believe the best way to procure a vehicle is by rental,” says Tobbell.
“If you contract hire a vehicle, you’re taking on a three-year risk, or whatever the fleet lifecycle of the vehicle is.
“Best practice for businesses these days is to lease buildings, IT and other services. It’s the same with renting vehicles. It allows customers to maintain their focus on their business – whether its construction, facilities management or being a courier company.”
While many customers have sought to reduce the overall capacity of vans, allowing businesses to take advantage of improved fuel efficiency, Tobbell says there has been a subtle reversal of this trend in 2014.
“Many businesses have become particularly cost-conscious over the past five years and individuals have become aware of cost and capacity,” he says.
“We’ve seen a trend of downsizing, but as the economy has begun to recover we’ve also seen an element of trading back up during the past six months.”
However, some Northgate customers are keen to achieve savings through fuel efficiency, as well as fulfil commitments to a green agenda.
“Customers requesting speed limiters tend to be completely committed to improving their environmental performance and we often see them specify our telematics package,” says Tobbell.
“They really want to monitor the vehicles on the road and look for ways of reducing fuel use and emissions.
“But for other customers, where perhaps their service level agreements require a level of performance and
arriving as soon as possible, there is little interest in speed-limited vans.”
Van operators require exacting levels of service from their providers as their businesses depend on their vehicles ability to perform.
Tobbell says: “The van rental market is very different from car rental. The quality of service is different. Customers need a 24-hour breakdown service 365 days a year.
“We are able to recover most vans there and then 85% of the time and get them on their way again.
“If we can’t fix them then we will get the customer to our nearest branch and provide them with a replacement that is at least big enough to do the job, and we transfer all the equipment to the replacement vehicle. It’s very difficult to get this level of service right and to meet expectations.
“In general, there is more competition in the marketplace now than before, which is a good thing from a service perspective as it encourages all of us to improve and find ways of standing out.”
Earlier this year, a large car rental company acquired a commercial vehicle specialist rental company, which could have implications for van rental customers.
Enterprise Rent-a-Car snapped up commercial vehicle provider Burnt Tree for an undisclosed sum, taking its fleet of vans and trucks to more than 25,000.
The agreement includes Burnt Tree’s fleet of 17,000 vehicles (including vans, HGVs, refrigerated trucks and accessible minibuses) and its proprietary fleet management technologies, as well as 20 branches and 400 employees.
Tobbell says the jury is still out on how the acquisition will affect the market.
“Burnt Tree is a well-respected supplier and a heavily-specialised operation,” he says. “The challenge for Enterprise Rent-a-Car is whether to let Burnt Tree continue its operations unchanged or whether there is integration, and I think that’s the bit the market is looking at right now.”
Northgate has its own plans to focus on, which include improving its NPS as well as opening more branches.
“We have 10 more planned at the moment,” says Tobbell, “Some within the M25, including Enfield and Dartford. We will be seeking to fill any obvious gaps in the network over the next few years.”
One particular service that is currently being trialled and could become more widespread is an out-of-hours maintenance programme.
Tobbell says: “Van rental customers need to know there will be zero downtime. Their vehicles are mission critical. We currently have 10 branches where we are looking at after hours servicing and MOT.
“It sounds almost impossible to have a scenario where there’s no disruption to the customer’s service, but it’s increasingly expected and we have responded to that.”