Walsall-based HomeServe now set to grow again

Membership of home emergency business HomeServe is nearing five million worldwide.

moreWalsall-based HomeServe, which celebrates its 20th anniversary next year, has seen losses of customers in the UK made up for by international growth in France, the United States, Spain and Italy.

The business is also just starting up in Germany.

Its UK chief executive Jonathan King said that in the UK after a tough couple of years HomeServe was set to start to grow again.

Mr King, who has worked for the business for 12 years, said it had undergone a major reorganisation of its operation in the wake of last year's policy mis-selling and complaints mis-handling problems.

HomeServe has shed 450 jobs and put its sales and marketing programme on hold in this country while a retraining programme was carried out.

Mr King said the number of customers in this country would fall from 2.5 million now, including just over 300,000 in the West Midlands, to between 2.2 and 2.3 million by the end of the financial year on March 31.

"We are re-starting our marketing in earnest in four weeks' time," he added.

This will be done mainly through direct mail.

"We are looking to grow at about two to three per cent a year in the UK – not the 15 to 20 per cent rate we were doing three to four years ago. We may have been growing too fast," added Mr King.

He said that all 15 water and utility companies with which it was partnered in the UK had been retained despite the problems of the last year.

Built

The redundancies have just been completed and involved only about 200 compulsory jobs losses.

The rest were found through voluntary redundancy and redeployment of some staff to other jobs in the group.

HomeServe now employs just under 1,300 at its headquarters site in Cable Drive and 4,000 worldwide.

HomeServe bought the former MEB building in 2002 and has built a new calls centre on the site.

It also has a second calls centre where emergency calls are handled at Preston employing 800.

Mr King stressed that HomeServe was committed to staying in Walsall where it started out and was one of the biggest local employers.

The company has also invested heavily in making sure it can cope if there is another winter as bad as that of 2010-11.

This has even involved buying 4x4 vehicles to ensure that call centre staff can be collected and brought into its two call centres in snow conditions.

HomeServe started as a joint venture by Richard Harpin with South Staffordshire Water in 1993 with the mission to be the first place people would turn to for home repairs and emergencies.

"We are in effect an AA for the home. Our core area is in plumbing and drainage repair from our partnership with water companies," explained Mr King.

"One reason why we have been so successful is because it is a universal need and our business model works really well in other countries."

The UK problems started with the big freeze in the winter of 2010-11.

"We struggled to answer calls because so many people had problems with their heating and plumbing. We had difficulties in getting staff in to answer calls and in getting tradesmen out to our customers. Unfortunately then we failed to deal properly with the customers' complaints that came off the back of that," said Mr King.

The industry regulator, the Financial Services Authority, began looking into the matter and then also took on the issue of problems with selling from the HomeServe call centre at Walsall.

Mr King said HomeServe had uncovered the problem itself.

"It was a small percentage of overall sales and only on certain kinds of product, but it was serious enough to realise we had to sort it out.

"We told the regulator about the problem and made the decision a year ago to shut the sales and marketing down to sort things out," he added.

As well as retraining all staff, including 275 managers, HomeServe has looked long and hard at the way it carries out its marketing and made big changes to senior management.

"Three top managers are no longer with the business," added Mr King.

"It was not just a failure by staff on the frontline, and there had to be a shake-up of senior management as well

He said HomeServe was now going to concentrate on serving its existing customers really well.

Despite the problems the annual renewal rate for customers has held up well at 80 per cent.

Mr King said that monthly customer satisfaction surveys for its team of 240 engineers across the country and third party contractors had consistently returned high ratings.

The business is also investing in training apprentice engineers and plumbers with about 30 currently employed. "The future for us is bright," Mr King said.

"We have a fundamentally good business model and products that customers want.

"We did lose our way, but we have done what it took to get back on the right footing."

HomerServe is still waiting for the FSA's investigation to be completed and Mr King expects a "painful" fine.

"I hope we have demonstrated how seriously we have taken losing our way and that we are a better business as a result," he explained.