A leader in the fledgling salary sacrifice arena, 15% year-on-year leasing and fleet management growth that it’s hoping to maintain over the coming years, and just outside The Sunday Times’ ‘100 Best Companies’ to work for – it’s not exactly dull at Zenith right now.
The leasing company, ranked at number 14 in the 2012 BusinessCar BC50 list of the largest firms in the sector, and set to rise in 2013, recorded a 15% rise in volume in what commercial director Ian Hughes called a “challenging marketplace” last year. Hughes says the “long-term vision is to continue our organic growth strategy”, with 15-20% year-on-year growth the target.
“Given the nature of our underpinned relationships I’m feeling quite confident of that growth aspiration,” he says. “We’ve got £150m of funding and four or five times more capability should we wish to use it in the next two or three years, so we’ve got the funding capacity to handle our development and not be affected because of our independence.”
Hughes says the independence issue is important because it guarantees the company isn’t at the mercy of wider strategic decisions taken by the banks that own most larger leasing firms.
At present, Zenith has around 9000 fleet-managed vehicles and 26,000 funded, with another 4000 accident-managed.
Maintaining priorities
Customer service is, according to Hughes, key to Zenith’s growth, and the firm’s attitude is that keeping its employees happy is a crucial element of that.
“When you have the philosophy we do around customer satisfaction, you need engaged and energised people – they are the crux and enabler of great customer satisfaction,” declares Hughes.
Zenith last year earned two-star status in the Best Companies accreditation process, which the workplace engagement organisation describes as “outstanding”, and is achieved via a wide criteria including staff engagement, reward packages, environmental and corporate social responsibility, and training and development.
The move to two-star status, with three the maximum achievable, comes following the firm being named on the list of Best Companies’ Ones to Watch in 2012. Zenith has also joined the Experteye leasing industry customer satisfaction survey to help it benchmark itself against rivals.
“Our business finished the year to date at 88% customer satisfaction – the target is 90% and Experteye will help us get it calibrated in the marketplace,” says Hughes.
A difficult move
Salary sacrifice contracts to staff not eligible for company cars remains a key growth area for Zenith, with nearly 6000 vehicles live for the firm and predictions that the route will become more important.
“We’re expecting it to continue to grow as wage inflation becomes difficult, as it’s a very tangible benefit now on offer at zero cost to the employer, yet to the employee it’s a very tangible route to car ownership,” says Hughes. “Customers are seeing it as a very nice value-added benefit.”
Zenith is increasing the complexity and flexibility of its sal-sac offering, having added a lead-in product to help a customer take a vehicle equivalent in price and size to the one they have ordered within seven days of placing the order.
It’s designed to help those that need a vehicle immediately because of an accident or MoT failure, but waiting times on the car they want leave them transportless for a period of time.
In the longer term the firm is also looking at redeployment of vehicles that are terminated mid-contract, with a view to bringing down early termination charges by making it easier to find homes with existing customers for vehicles part-way through their contract.
The complexity of the system also means Zenith can closely track what people are quoting on and therefore where manufacturers should be targeting their vehicles and prices to best effect.
“Salary sacrifice is about 20% of our total mix. It’s growing organically alongside the business and is a really important part of our product and service,” declares Hughes. The next step will be the imminent arrival of Vauxhall’s plug-in electric Ampera, and Zenith will also run a car internally to gather knowledge, having already run two Nissan Leaf electric models.
But underpinning everything Zenith is doing is its Pulse dashboard platform. Introduced around 18 months ago, the system is used by the company itself and by its customers.
The zenith of Zenith
“Without a shadow of a doubt it has been transitional in the way Zenith operates its business,” claims Hughes. “Every area of the business has very significant Pulse management information and is using it to manage the supply chain, all financial transactions, and monitor and provide insight into every area of the market, from daily rental and charges to deliveries and excess mileage.”
Zenith customers also use the data to manage their fleets, with Pulse highlighting exceptions, across a broad range of criteria, for the fleet manager to focus on. It enables Zenith’s account teams to work closely with customers as they’re both looking at the same real-time data simultaneously.
The system has allowed Zenith to streamline internally, and it is delivering three times as many cars as three years ago with a similar-sized workforce.
“We’ll continue to grow in number, but not as quickly as the business grows, as we will continue to drive efficiencies,” concludes Hughes. “We might not need to add to the finance team for example, but we might need new account managers if we secure a new fleet – we don’t want to dilute the service as we recruit new customers.”
