MERCHANT FOCUS: MKM
Kilburn says. “Private equity usually remains involved with a business for around five to seven years, however 3i stayed with us until 2017 which was 19 years from their initial investment. That then gave me the opportunity to sell some of my shares, and that’s when Bain Capital bought the majority stake at MKM in 2017. They’ve now been with us for five years.” How has MKM developed since 2017? In the early stages, MKM operated from a 5,000sq ft shed and five employees, and has grown to around 2,500 employees, with central support services that were never there in the early days. “Now we have HR, IT, Marketing, Finance, etc, a significant number of people working at our centre in Hull. Our operational structure differs from the bulk of our competitors, who tend to be centrally managed and run,” Kilburn explains. “We don’t have regional, area or national management, the branches run themselves. I believe that if you hire the right people to run the branches, you don’t need a structure to manage them. If you do, then you’ve chosen the wrong people.”
Service ethic
Kilburn believes that it’s the commitment to customer service and the enthusiasm of employees that makes the difference with MKM. “We get so much feedback from suppliers and customers about the commitment of the branch staff. We look at each individual resource we need in each individual branch. Whether it’s products or additional people, we look at everything we need to do to provide a great service for that particular branch, and it impacts our decision-making process considerably e.g., whether we need a new truck, or more people or whatever,” Kilburn says.
MKM premises tend to be new-builds, outside of industrial estates, a strategy that has worked over time, Kilburn believes, because it allows them to attract general public more easily, as
well as trade customers. “When you put a branch on a main road, of course you have to pay more for it, but you earn it back in trade and you’re more visible to the public. I would also highlight the quality of our people, they tend to be enthusiastic, keen, motivated and we reward them well. There are always good incentives in place for everybody, this stretches from branch directors down to each individual that works at the branches. It’s very much geared to the performance of the branch that they belong to. We meet all the new teams before opening the branches and we go through two or three hours talking about the history and culture of MKM. We all have lunch together then go to the branch and get to know everybody. It’s very much a relationship business. I always finish the inductions with the quote from The Greatest Showman “No one ever made a difference by being like everyone else” and that is one of the key parts of the business. We want to be something different; we want to be vibrant and positive to the local community.” Kilburn says something that has stayed with him since his early days at Harcros is a video call with management guru Tom Peters. “During the call, he said if all you give is great service, you can have the lion’s share of any market. That’s always stuck in my mind; our focus is on great customer service: answering the telephone on time, welcoming customers to the branch, knowing your products, understanding what your customer wants. I’d like to think we’ve changed the landscape by investing in decent premises, quality people and a good work environment.”
He adds that he knows MKM wouldn’t have started if he hadn’t been made redundant, and as a result of that, lots of people have had their lives changed for the better by becoming a part of it. “Life’s a lot about a luck and the decision to have a 25% stakeholder was a key asset and gave us an advance that other businesses may not have had. Two things have really stuck with me as the most rewarding parts of our whole journey. The first is one of our Branch Directors called me on Christmas morning to tell me he was looking out of his family house at his wife climbing into a new mini. This was because of what MKM had done for him. Then, three or four years ago, he took me on a car ride to a small development of flats and said he owned them and it was down to MKM. The second thing is Alan, who runs our branch in Perth, his ambition was to have a house on the hill which overlooks the city. Four years after starting with us, Alan called me to tell me he bought the house on the hill. For me, the most rewarding moments are those things that make it seem worthwhile. Those are life-changing opportunities.”
October 2022
www.buildersmerchantsjournal.net
The company’s 100th branch opened on September 23rd in Bromsgrove, Worcestershire, with new branches following soon after at North Walsham, Lincoln North, Bury and Manchester. “I don’t think we have an end point in mind,” Kilburn says. “If the process works for 100 branches, why shouldn’t it work for 200, and if it works for 200 why shouldn’t it work for 300? I can’t see a reason why it shouldn’t. With around 4,500 merchant outlets in the UK, there is scope for a few hundred more, surely? Will MKM become the largest builders’ merchants chain in the UK? I don’t know, but I think we could be. We’ll continue to grow; we’ve got plans for new branches. Our recently opened branches are doing exceptionally well, we’re not seeing any lowering of standards, and our employees are just as keen and excited to get going on their own parts of the business as they ever were. Our planning and preparation before opening the branches has become more sophisticated and we’re only going to get stronger. We’ll keep doing what we do best which is delivering first-class customer service.” BMJ
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