Executive Hire News › Archives › September 2019 › Executive Report : Flight of the Phoenix
Executive Report : Flight of the Phoenix
Alan Guthrie poses questions to senior management at Phoenix Hire & Sales.
The company has just opened its fifth location in South Wales and has plans for further growth. Answering the questions were Phoenix Chairman Gary Derraven, MD Paul Lewis and Sales Director Jason Derraven.
Q. Having opened your first depot in 2008 and your fifth very recently, you must be delighted with Phoenix’s growth.
A. When Gary left Speedy in 2006, having joined them on selling his original Kingfisher Hire & Sales business to them in 2003, he had no plans to go back into tool hire. But he eventually saw another opportunity and opened the first Phoenix depot in Cwmbran in 2008, followed by Bridgend (2009), Cardiff (2010), Pontypridd (2015) and now Swansea. Cardiff was relocated to larger premises last year. We introduced plant hire in 2011 and have added a successful sales operation with a growing number of dealerships, simply to meet customer demand. Incidentally, Gary celebrates 40 years in hire this year.
Q. What drives the business forward?
A. The enthusiasm and passion from everyone in the Phoenix team and their commitment to serve the customer. We want people to give us their problems and we’ll find the solutions, becoming almost an extension of their businesses. We’ll source whatever they need - even things like toilet rolls, coffee and we recently provided a golf buggy to a site for transporting personnel over rough ground. We say: whatever you want, we can get it.
Q. And you have an in-house initiative, Customer First?
A. Customer First is about us doing everything we can to support people. For example, we team up our local salesmen with one another so that when one goes on holiday, the other knows their customers and can step in efficiently with no loss of contact.
Q. You also serve a number of specialist hire markets?
A. We offer dedicated Survey and Lifting ranges, and Safety products that have synergies with all of our activities, along with our Training activity. The Pontypridd depot has a purpose-built testing and calibration centre for our Survey fleet, which is steadily expanding - only yesterday we bought three more Topcon robotic total stations. Pat O Shea, who is MD of these divisions, brings a wealth of experience in these markets. He is supported by General Manager Steve Farmer, who is also well-known in the lifting industry. We are also developing the supply of specialist grounds management and tree care items, such as climbing equipment and accessories.
Q. How does the sales operation sit alongside hire?
A. We obviously prefer to hire but some customers will always have a requirement to buy equipment as well. We sell what we hire and hire what we sell, with dealerships for suppliers like Stihl, Duro, Ox, Topcon, Ausa, Doosan compressors, Armorgard, Snorkel and Yanmar compact
plant. In fact, we believe we are the biggest Yanmar dealer in the UK. We became a Stihl dealer in 2017. Originally this was predominantly for construction products, but now we sell pallet loads of disc cutters a month as well as lawn and garden machinery. We also gain business in repairing and maintaining what we sell, and we use our inspHire computer system to send service reminders to customers.
Q. Might there not be a conflict between hire and sales - such as selling to other hirers?
A. No. We won’t compete unfairly against anyone else and we don’t have any conflicts with other hirers or dealerships. We never intentionally undercut anyone if they are offering equipment they bought from us. It’s all about the relationships you have with other hirers.
Q. How do you track the performance of the business?
A. Jason heads up sales, supported by our Marketing Manager Joe Flanagan, who was previously with Stihl. We have a salesman at each depot but sales aren’t broken down solely by area. A client in, say, Cardiff, might need equipment at other locations across our region, so we ultimately analyse everything in terms of customers. However, our computer system tells us what has been selling well, or not so well, and we try to understand why - not to criticise but to see if there is a particular factor affecting demand that we can address.
Gary presents weekly forecast figures every Monday morning. Monthly P&Ls are discussed by all four board directors. Quarterly performance is discussed with all managers and assistant managers, after work, which is normally followed by a hard-earned curry.
Q. Tell us about the new Swansea depot.
A. It is on a retail park in the city, which will make it visible to a huge variety of passers-by. Demand has grown organically, westward from Bridgend, and the new depot effectively completes our model. It makes us a true one-stop-shop across the region we serve. We’ll start with six personnel at Swansea and increase steadily to 15. We have also made a significant investment in cordless equipment at this location to gauge demand for this kind of product. Swansea is the last large piece of the jigsaw. It enables us to offer a complete service to our West Wales customers
Q. The breadth of Phoenix’s operation must call for very flexible management.
A. We are at the right size to be very responsive. Pontypridd is our administrative base and is also the most central, forming a perfect hub, where Paul and Jason are both based, whilst Gary bases himself in Cwmbran with the accounts team. Pontypridd also provides a customer telephone support team, as well as telemarketing.
While every location has a test-and-run facility, Pontypridd undertakes central hire fleet repairs and it will operate from a new, dedicated unit next year. Central purchasing is based at Cwmbran, which also handles repairs and service of customers’ own equipment, which we keep separate.
Q. Your staff must be flexible, too.
A. We have a great team. They’ll come in at 5am when we have an early delivery to make. And recently we had an urgent request at 4.50pm on a Friday to deliver over 500 fence panels to an event in Oxfordshire after another supplier let their customer down. We responded and got it done. All depots open at 6:30am.
Q. What are our industry’s biggest challenges?
A. Our main challenge is the recruitment and retention of excellent, passionate team members at all levels of the business. We fulfil this by recruiting from within and outside the industry, followed by excellent training and regular staff appraisals to understand our team’s aspirations and to help them work towards their life goals. Hire rates are always a challenge but modern technology allows
us to fine-tune customer rates in line with their expectations and are further weighted by other considerations such as turnover and payment performance.
Q. What advice would you give to other hire executives?
A. Genuinely care about your customers and staff, and have a strong desire to be Number 1 in your own market. But most of all, have fun and make friends - business is so much easier then.
Q. Any future plans?
A. Our new website will shortly introduce an e-commerce sales facility, and we’re creating a dedicated operation for this in Cwmbran. Customers will also be able to book training courses with us online. Our turnover was £6.7m in our last financial year and that could reach £10m in 2020 with the Swansea depot opening. We have other ventures planned, too, some possibly appearing within the next two years. So watch this space. •