B-Quik CEO: Customer Service Key, As Drivers Dread Tire Shopping
By James Simms
BANGKOK – “People don’t want to buy from us. That means we are like the dentist – nobody wants to go to the dentist,” says Henk Kiks.
That’s the proposition that the chief executive officer of Thailand’s largest and fastest growing tire and auto-service company, B-Quik Co., Ltd. has successfully overcome in the past decade and a half, focusing on strong customer service and rigorous policies to recruit, train and retain employees to ensure that.
By 2020, the company, which had 5.8 billion baht ($164 million) in sales last year, plans to increase the number of service centers by half to 200 and profit by nearly 80% to one billion baht. Despite Thailand’s recent economic and political turmoil, B-Quik, which Marubeni Corporation has a controlling stake in, is bullish on the outlook because of the country’s still expanding middle class and motorization.
Kiks, a spiky-haired and lanky, car-racing Dutchman, can sound a bit like a management guru when talking about his business philosophy and a patriarch when talking about his employees, partly because of his enthusiasm. Fortunately, it’s sans clichés and B-school jargon. Starting out as fitter in a garage right out of technical school in Holland, B-Quik’s CEO, 54 can be blunt, humorous and disarmingly informal.
“Nobody gets up on Saturday morning, opens the window, and says to the wife: ‘It’s such a beautiful day, let’s go and do an oil change at B-Quik,’” says Kiks with a toothy grin.
But drivers, however begrudgingly, have to come in because of worn tires, squeaky brakes or that blinking oil lamp. Unlike buying a new car, this isn’t spending they’re excited to do. Plus they don’t trust repair shops. That’s why, he says, the quality of the service “is so incredibly important.”
“You have a customer who comes in, and in his mind says, ‘I don’t want to buy anything from you. What do I need?’ That’s the question we gotta answer. So, we gotta be able to do that right. And that’s why honesty is so important and explaining (why the work is needed) is so important,” Kiks says.
Pedal to the Metal on the Road and Track
B-Quik’s main market of Thailand is the automobile production hub for the entire region – the “Detroit of Southeast Asia.” Automakers, namely Japanese firms like Toyota Motor and Honda Motor, manufactured nearly two million cars and trucks in Thailand and recorded almost 800,000 in domestic sales in 2015. For B-Quik, new car sales plus those already on the road mean a potential market of eight million cars today. And that’s only growing.
Nationwide, the company has a 12% share by volume for replacement tires, from a mix of Japanese, South Korean and Thai brands; Nearly 60% of its revenue comes from tires. In the markets where it has stores, namely urban areas like Bangkok and Chang Mai, the share is between 20% and 25%, Kiks says. The main competitors, who are cheaper and focus on their own brands, include Bridgestone’s Auto Care & Tire, or ACT, and Goodyear Autocare.
Critically, as the premium B-Quik brand is expected to saturate the market over the next several years, Kiks says it’s planning a lower cost, second-tier brand to enable it to increase its market share, profits and management slots for its employees. That’s because with 200 stores by 2020, and in an open and competitive market, it will be “almost impossible” to gain more than a 25%-30% market share by volume in the regions that its centers will be operating, he says. The new brand would target another 10% market share nationwide, adding to the assumed 20% market for B-Quik, he says.
Kiks, who joined a tire and auto-service company in Holland in the late 1970s, worked his way up to an area manager at the company while earning a college degree. He received an MBA in 1998. (He says he hasn’t forgotten the investment by the company in him, and that drives his push to give more opportunities to his staff today.) In the late 1990s, he started working in Asia for another company and joined B-Quik as chief operating officer in 2000. After a 2003 management buyout, which Kiks participated in and became CEO in the process, Marubeni bought its stake from another investor in 2006.
Wearing another hat at B-Quik, Kiks also drives for its racing team.
Having one of the biggest such teams in Thailand might seem like a luxury. But he says that the discipline and experience of the track benefits B-Quik’s 1.4 million customers on the road.
Kiks, who started racing as a teenager, says a race squeezes months and months of driving into a matter of hours, so the pit crew, who also work as store mechanics, can see the outcome of their work immediately. Another result is that the firm has expanded the use of nitrogen from its racecar tires to customers’. The inert gas, also used in airplane tires, doesn’t change volume with temperatures, and its molecules are larger than oxygen, meaning that tires maintain the proper pressure longer, he says.
Employee Focus Equals Customer Focus
Today, B-Quik’s major restraint on expansion is its ability to staff the stores with high-quality personnel, limiting it to a pace of about 10 to 15 new store openings a year, Kiks says. Having quality employees is critical to attracting customers, gaining their trust and maintaining their loyalty, he says. That kind of customer service, he adds, stems from its ability to select and train its own people and provide better salaries and benefits than peers.
And with the chance to rise from an entry-level fitter to an area manager, which oversees 10 stores, or even higher, and those financial incentives, the company attracts “ambitious young people” wanting to make a career at B-Quik, Kiks says. Indeed, the current human resources chief started out as an assistant center manager, and the default position is to promote from within. With all these inducements, it can demand higher performance from its nearly 2,140 employees, he says, and keep turnover low.
“That guy working today as a fitter knows he needs to do well, and wants to do well, because he wants to become a technician. So, attitude-wise towards our customer – who remember, doesn’t want to buy from us, he will treat that customer right,” the CEO says. “It’s all about our people.”
That selection and training process is rigorous.
Half of the new entrants leave before the end of their three-month probation period, about 60% at B-Quik’s instigation and the rest on their own accord, Kiks says. (That discipline is evident in the spotless, trademark yellow and black service centers; One work floor displayed a photocopied picture showing exactly where to store the tools on the wall rack.)
That high wipe-out rate is partly because the company hires new employees without any interviews. Because applicants will say anything to get the job, “you waste two days of work interviewing,” he says. “It’s an attitude thing. Attitude you cannot measure by talking.”
To go from a fitter to a technician – a job where one can perform all of B-Quik’s services, an employee must pass 20 courses, each of which can take from one to several days, says COO Busararat Assaratanakul. It also has training programs it sponsors at technical schools, where students take one day of classes a week and work the rest at B-Quik, she adds. The company covers both a salary and the tuition.
“Our people come first,” Kiks says. “That’s the core of the B-Quik success.”