Achieving change in a well-established, successful business with a diverse and independent retail network is a tough job. Making that change in a rapidly evolving market populated by mega-corporations intent on domination looks even harder. Add to that the task of retaining best practice while preserving customers and employee relationships and you get a feel for the task facing David Baker, general manager at Rodenstock UK.
Baker brings to the role a long career of 29 years in management, sales and marketing across a range of sectors from electronics to watches along with nine years in the optical industry. The other key weapons in his arsenal are levels of enthusiasm and drive that make it difficult to imagine he will not succeed.
Globally Rodenstock has been having a good time. Under Anders Hedegaard, who became the chief executive officer in February 2019, the firm is exceeding targets, says Baker. ‘We have got a new vision and a new mantra going forward which is very positive.’
Under headings of agility and trust, the company has the ambition to get close to its partners and respond rapidly to their needs. Internally with its commitment to empowerment and accountability, Rodenstock wants to see its employees able to respond to customer needs and have the ability to make decisions.
The UK continues to perform well and has its famous Club community of retail partners, but among Baker’s tasks is to see some of that wider success replicated and the new mantras enacted in the UK. That means recognising what could be done better and exercising some tough love and honesty.
One of the key drivers for Rodenstock has been the mix of the business as it seeks to support its partners. The firm has never been an equipment company per se but utilises technology to enable its lens business. ‘We sell equipment to integrate us with our partners and enables them to differentiate and differentiation is the key driver,’ he says. ‘Rodenstock needs to properly differentiate itself with its partners so they can in turn differentiate in the market and add value, that’s the key thing.’ He is keen to stress this means investment into the field support network and into its systems and processes at its Northfleet HQ so it can support its practice partners more effectively.
In the UK, the mixture of the business for Rodenstock has changed but not to the extent that other, more developed, markets have seen. Baker is very candid about Rodenstock in the UK. ‘It has been in flux, it has lacked direction, it has lacked leadership, it has had dysfunctional organisation and we have to re-align that to change those structures and engage the employee base. We haven’t just been asleep at Rodenstock, we’ve been hibernating.’
Among the issues has been too much silo working. ‘We have to change the environment to be much more pro-active.’ The investment made in staff will enable it to better support existing customers and embark on a new customer acquisition strategy for new partners that fit the Rodenstock model and do not impact on its existing customer base. ‘We have to protect our good partners first but there are gaps where we can get new business that won’t have an effect on our existing business. It’s an intellectual process and we don’t want to go out there and just sell to anyone.’
Club class
Baker says customers are starting to see more efficiency and more effective ways of working together as partners. ‘I’m not saying we have been divided, we have some very good engaged customers.’ One of the areas he is addressing is the Rodenstock Club concept, which has the potential to create a two tier way of working. ‘Club will be redefined next year; improved and clarified because at the moment it’s a bit woolly, some people are in it but they don’t know they are. It has to be a Club that has defined parameters and that is something that has got watered down over time.’
Those parameters will be based on the level and mix of sales but he is keen to keep the many benefits and positives that Club has for Rodenstock’s business partners. He says he spoke to many Club members at the company’s Christmas lunch and was impressed by the level of engagement. ‘The trouble is that it [Club] has become too insular and it’s become too tight a group. There is nothing wrong with that for the current Club members, but there are no stepping stones for other customers to get into it.’ The next iteration of Club has to be fair and sensibly-defined, he concludes. That process is expected in the second quarter of 2020 following discussions with partners.
Investment in field staff and a new sales director will enable improved systems but also reduce pressure so the team can take advantage of new opportunities within the market and service existing partners in the way Baker says they deserve. He wants this to be a more transparent way of working which has clear mutual benefits and strong business planning. ‘That’s something that we haven’t been very good at doing, we have had a very transactional relationship with a lot of people, even Club customers. Actually we need a multi-level, mutually agreed set of objectives and we work together towards those objectives. That’s a proper strategic partnership.’
This could be achieved through marketing and training support. Baker admits Rodenstock does have to catch up with some competitors but he wants to take that support to another level ‘in the Rodenstock style with the Rodenstock uniqueness.’ As an example he adds: ‘We are the only manufacturer that sources its own blanks, we are more controlled in terms of our vertical integration than any other lens suppliers. That’s quite unique and most of our customers don’t even know it.’
Baker says getting Rodenstock’s many benefits across to its partners and furnishing them with the tools to get those messages across to the end wearer is key. This enables the practice to differentiate and get messages about value across. ‘Value isn’t about being cheap. Value can be achieved at any cost level’.
He says you just need to look at the premium cars on the road to see what a great job the motor industry has done in convincing the public they need the best car that they can afford.
Independent focus
Going forward Rodenstock’s focus will continue to be the independent sector but clearly there is a desire to grow its partner base. He says in a country such as Germany, where it is the market leader, the independent sector does not have a low value multiple opposition. The main rival is Fielmann which Baker describes as a ‘higher value quasi-independent’. Arguably differentiating against that is harder than the competition in the UK. Rodenstock is the market leader in Germany and it is the market leader in Scandinavia where Specsavers is present. Its target demographic is 55 plus and over the next few years that age group will grow.
‘We don’t want to be niche, but we are not a fit any business either. All independents and all areas are different.’ He says offering its customers some level of exclusivity is important. A town may have five independents and the company would not want to be with them all but might be able to support two if the customer base and the practices’ offering allow.
Product Offering
Rodenstock continues to have a broad suite of products across all lens types and budgets but Baker says Rodenstock wants to be a technology leader too. Leading that charge is its campaign around Biometric Intelligent Glasses (BIG Vision For All). At the heart of the BIG campaign is the DNEye scanner which takes 7,000 measurements, which is claimed to be more than any other manufacturers’ system.
‘All of these measurements are going through to the lens manufacture. It is a premium process but 98% of people out there probably haven’t got the perfect glasses for them because there are too many assumptions made on the measurements. We are not an equipment company but what we are using the equipment to do is to become a visual technology leader to raise the bar and enable partners to differentiate their service.’
He draws a parallel to the motor industry again by pointing out how new technologies, like a reversing camera on a car, become essential once you have used one.
Frames is another area Baker says Rodenstock can work on more to support its customers. Brands such as Porsche Design have not been communicated to the market as well as they could have been and while it is a high quality, aspirational marque it translates very well to an optical setting. ‘It has to be more exclusive in some ways than our lenses,’ he says adding that training around the brands is essential. Getting the frame and lens sales forces to work more closely together, developing complete packages and simplifying the frame offering is all work in progress while at the same time talking to practice partners about the opportunities. ‘We do have a big opportunity on frames although it is a much smaller business than our lens business.’
With so much riding on the independent sector Rodenstock is mindful of the changes taking place and the way it works with practices on issues such as succession. ‘There will be more consolidation, of course there will be, and more groups will buy more independent practices but there will still be a steady stream of new independents opening as well,’ he says. If a practice is up for sale we need to get in early to make sure there is continuity. This is another reason to have a consultative rather than transactional relationship with a customer. ‘If you are not close enough you don’t know what is happening.’
He sees a situation in which the numbers of doors and volume held by the independent sector may fall but the value of its share in the market will be maintained. ‘As demographics change and there is more disposable income put into our products there is more of an opportunity not just for current independents but for whole areas.’ He says there are some great independent practices out there and they are best placed to deliver the patient journey, clinical care and product choice that premium buyers want. All the little things add up to create the right experience: the specialisms and care provided, the look of the practice, customer service, the fit and finish, even the temperature.
Land of the giants
The other big change in the market has been consolidation but Baker is surprisingly upbeat about the way independents may reap the benefits of mergers such as those between Essilor and Luxottica. The business logic of mega-mergers relates to supply chain efficiency which, he says, give true independents an even greater opportunity to differentiate. ‘I don’t think it is something we should be fearful of, I think it is something we should grasp because that is the opportunity, you [independents] can be more individual.’
The inclusion of the Vision Express stores within Essilor-Luxottica help even more as it was the multiple with most similar frame choice to the independent sector. As part of the merger the product offering will be streamlined more towards Essilor and Luxottica to achieve cost savings and in turn making it easier for independents to differentiate. ‘In terms of supporting the independent sector you can’t have your cake and eat it, I’m sorry but you can’t. I can’t go and give our Performance Lens and X-tra Clean to Specsavers and expect to get the same level of support in the independent sector. I wouldn’t expect to do that, it’s not natural and it’s not fair, you have to support the channels
differently.’
A bright future
Baker describes Rodenstock as an SME ( Small Medium-sized Enterprise) in the UK. This means it is big enough to have the product portfolio, technology and development, but it’s not too big so as to be impersonal and still maintain the close links with its retail partners and not too big to be able to make decisions quickly and be agile in operation. ‘The market is becoming much more fast moving so that puts us in a nice position because we have a nice mix and the right balance.’
Baker believes that achieving market leadership in Germany and Scandinavia, arguably two of the toughest markets to crack, proves that Rodenstock can be a market leader anywhere. ‘Rodenstock offers the best differentiation opportunities in the marketplace in terms of our portfolio and our quality,’ he says. ‘Rodenstock offers a huge opportunity for independents because we can assist them to differentiate more.’