The long term business

In Features On

Havills is the winner of the Independent Business Awards 2010 in the Consumer Electronics Small category. Martin Havills, the company owner, told Anna Ryland how he plans to secure the future of his business by providing a first class customer service to the older people’s market.

Electrical retailing is in Martin Havills’ genes. In 1959, Martin’s parents bought the retail premises in Alphington and three years later built a house over the shop where the family lived for over twenty five years. At the time Martin’s father sold televisions, vacuum cleaners, fridges and other domestic appliances.

The origins of the business reflect the social conditions of the time. Martin’s dad who was a Hoover-trained engineer, worked for a local retailer in Exeter. The day his mother died he asked for a day off to attend her funeral but was refused the time off. There and then he decided to leave and start his own business.

Martin, who was initially employed as a technician in the local architectural practice, started working for his parents 27 years ago, and after five years he took over the business.

Today Martin Havills’s company comprises three stores: the shop in Alphington, on the outskirts of Exeter (which belonged to his family for over 50 years), a store in Topsham which he bought 15 years ago and a smaller store in Honiton which was opened in April 2010.

Growing and changing

Taking advantage of market opportunities, Martin has developed his business over the years, sometimes making U-turns… “When I took over the business from my father I progressively extended the Alphington shop by approximately 75% overall. Our shop in Topsham is about the third of the size of the store in Exeter but it has a good regular customer base, with no competition in the close vicinity. Our next major venture was in 2003 when we opened Digital World in nearby St Thomas. We wished to capitalize on the demand for large-screen televisions. Unfortunately this venture failed as it became apparent that we only diluted the business in Alphington. “We were too early for flat panel televisions the prices of which were very high at the time. Perhaps the shop was too up market in the down-market area. After two years, we totally changed the focus and marketed the shop to the local customers as an electrical discount warehouse selling white goods only. We pulled out in 2006, selling the property without financial loss. Shortly afterwards we upgraded the main shop.”

The specialisms

Havills is an all-round electrical retailer. “We are jacks of all trades and masters of none,” laughs Martin. “We sell brown and white goods and we had a good rental list but this has declined over the years, currently accounting for 10% of the turnover. In its heyday it was approximately 25% of the business. We have always offered our own credit.”

“We also offer our own annual maintenance scheme which the customers can extend or opt out, if they wish. Fortunately our local customers trust us. However, approximately 50% of our stock is now covered by manufacturers’ warranties and this reduces our target market. We do two mailings a month to our new customers, the 30-day-after- sale mailings and one after 12 months – at the end of the guarantee period. All service calls are done on the same day in most cases. If the repair is not possible we give the customer a replacement product.”

Havills sells Panasonic, Philips and Finlux and on the white goods side – Hotpoint, Bosch and Belling. “In our locations we are not going to be successful selling the top brands. In floorcare we sell specialist American brand Oreck, together with SEBO.” Havills also stocks a selection of small appliances, mostly Bosch kettles and toasters.

Exeter University, with its large student population, presents a business opportunity to Havills. “We have been modestly successful selling appliances to letting agents managing student accommodation. They don’t go for premium brands but are less price sensitive. Primarily they value speed of response – of delivery and servicing. We do regular mailings to the letting agents which include a list of the most popular appliances, delivery and removal charges and special offers. We also have a good relationship with the National Trust manager who handles their rental properties in the area.”

The greatest asset

Currently Martin employs six staff members and a temporary part-time bookkeeper. “We have a great team of experienced people: Trevor has been with us for 37 years and Clifford, who single-handedly manages the Honiton store, has worked for us for 28 years. Our installers and Topsham managers have been with us for eight years. Without them we wouldn’t be able to handle the switchover business, including the great volume of retuning over the phone.”

Managing and motivating a small team when volume of business fluctuates frequently is a challenge. Martin, who feels that this was never his forte, undertook Investors in People training in 2003. “It focused my mind on such aspects of management as training and communications. We achieved the title in 2003 and got reassessed in 2006 and 2009.”

The customers who needs us

Over 50 years Havills has developed a close relationship with its local customers, and Martin understands well their needs and preferences. “My customers are getting older – they are largely in the 50-plus bracket. These are the people who need technical help and advice, and physical help too. They are local. Anyone from further afield are likely to be old customers of Havills who moved out from the area. In Topsham virtually all our business comes from the town itself.”

Martin frequently communicates with his customers, through bi-monthly mailings, Havills News and information about special deals in the local newspapers. He also organises in-store promotions, such a the recent 3DTV demonstration, and the company participates in the local events, like Honiton Agricultural Show.

The gains and costs of switchover

The digital switchover was rolled out in Devon in 2008/2009. “t was huge for us, sights Martin. “It coincided with the rise in popularity of flat panel televisions. We were doing up to 16 retunes a day which was spread between ten members of staff and I had to take on some part time staff to manage it. We wouldn’t be able to handle such great volume of business without the expertise of my experienced staff. We had a great year but there were cost implications in terms of manpower and we probably brought two years of brown goods business forward. But now we are suffering after-effects with business considerably down in comparison.”

Management of the switchover required a considerable planning effort – as far as 12 months in advance. Since then Martin had shared his experience with other dealers on the pages of retra magazine to which he received a lot of positive feedback.

Beating the competition

“Giving the best possible service to our customers – this is how we are managing and surviving when the times are good and when the market is tough,” says Martin. Then he explains: “We monitor our efforts in this respect extensively. Our pay structure is set in a way to foster service excellence. In addition to basic salary, everyone gets percentage from sales turnover. In order to prevent them from hard selling it is balanced with customer incentives. The customers are asked to fill and return a service questionnaire on which they are five service indicators. If they are scored at top marks the staff collectively gets £5 for every questionnaire. The idea behind it is to maintain the balance between the need to sell and provide good customer care.”

Then he adds; “We are looking at t
he next sale, not the first sale,” which seems to be Martin Havills’ business philosophy.

Martin also believes that membership of a buying group is essential for an independent. Being a member of Euronics since 1986, he says “if an independent is not in the buying group they are unlikely to survive, unless they’re a Panasonic or Samsung dealer.”

The times are changing

Finally, Martin shares a few words of wisdom about the direction the industry is moving in: “We need to have a full understanding of our customers’ needs in order to provide the products and services that they require. The range of customer services provided by an independent, often free of charge and taken for granted, in future need to be clearly communicated to our customers as the point of difference between ourselves and our larger competitors.

“Direct mail and in store events will play a greater part in developing a relationship with our customers to ensure that we achieve more from an ageing and depleting customer base. The days of waiting for the customer to contact us have long gone! However, a combination of old fashioned service and modern marketing techniques will give the independent a good living for a few years to come.”

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