2008 is continuing to prove to be an exceptionally difficult year, not only for the recovery industry but for most businesses and motorists. The current economic climate, fuel costs and interest rate uncertainty, with major financial institutions under extreme pressure, is causing sleepless nights.  I am not known for being particularly gloomy or pessimistic and so despite the above I thought that I would bring some positive news from Green Flag.

 

As many of you will be aware Saga and Barclays Additions represented a sizable amount of the Green Flag business.  I believe that most of you in the recovery industry, faced with the same position, would have reacted as we have by looking at ourselves carefully to see where we improve and take immediate steps to remedy the situation. We were under an obligation to launch a contract for our network and at the same time, arrest the leakage of customers to the opposition.  It was clear that there were chinks in our operation armour and we have taken steps to improve them and make ourselves more competitive to potential customers.

 

We understand that the contract process that we went through was upsetting for some and we saw a number of very good service providers leave our network.  There was no intention to actually reduce the size of the network, indeed it could have been larger if required, to achieve the service level agreement set out in the contract.  However, we were pleased to see that the industry took up our challenge and we have seen considerable energy and ambition in the bidding process that led us to our eventual network.

 

That network has been fully in since xxx and we are starting to see the initial results come through, and they look very encouraging!  Response times and repair rates are significantly improved, along with the acceptance rate.  This is extremely positive for our customers who are starting to tell us positive things about their enhanced experience.  We have the first draft of data from our Tier 1 service providers, and here we have data that is fully auditable and demonstrates that Green Flag’s focus on working with the independent recovery industry is absolutely the right thing to do.  This method of capturing the data is also positive for us to be able to sell Green Flag to customers and is another example of Green Flag’s ambition to grow in the market and obtain new customers who will the enjoy the services that the independent sector of the recovery industry is able to deliver.

 

One thing that has arisen from this that we weren’t expecting is that service providers are reporting increased percentages of work through their workshops.  When responding to our e sourcing process I would think that most of you would have calculated the likely profit from increased volumes and similar additional income. 

 

But it seems that a hidden advantage may be the increase of repair work that those volumes will sometimes generate.  One particular service provider recently told me that he had budgeted for a 5% increase in the throughput of his workshop but was actually experiencing a 35% increase which was leading him to employing another technician to cope with the work.  This is a positive sign in these difficult times.

 

Whilst a lot of the current activity has been focussed on our top (in terms of volume) operators we haven’t forgotten the other Tiers where we are seeing improvements in their performance which is also supporting our efforts to improve our overall offering to customers.

 

So thank you to our entire network, your efforts are producing the results that will allow us to challenge for more customers and more work of which you will carry out 100% of it. That must be good news for the independent recovery industry?

 

Gary Amos

 

19.12.08