View from the top: TFC
TFC is using its good reputation and expertise to broaden its business model. Paul Fanning finds out how.
Since he became involved with TFC in 2007, its group managing director Martin Clarke has been faced with the difficult task of making a successful company more successful.
Founded 40 years ago by David Hale, TFC (The Fastener Centre) developed as a business selling non-threaded fasteners to designers. Its range consisted of a variety of innovative fastening solutions that allowed people to design better, lighter, faster products. Until 2007, when David Hale sold the business to a management buyout, essentially, TFC supplied a wide range of high level international industrial customers in a variety of industries from aerospace to automotive, petrochemical and general industrial.
"It was all based around the technical sell," says Clarke, "with sales people visiting designers and talking to them about what they wanted to achieve with their piece of equipment and us suggesting ways in which we could connect the parts even better – saving the customer time and money."
The business model around which the MBO's business plan was based was to appreciate what it already had, which was a lot of prestigious customers buying technical fastener products, while also looking at the opportunities this was creating. Says Clarke: "Very often, because our service and quality were so good, many of our customers would say: "I wish TFC could supply some of our ordinary bits like threaded fasteners, springs, pins and seals."
He continues: "So our business plan was to go to our existing customers who really liked us and say 'we can supply your more commodity fastener needs and to this end we set up a range of UK service centres that allowed us to get closer to our customer to supply the ordinary bits as well as the higher technical parts."
What this has meant for the company is a distinct advantage when it comes to its access to its customers. Says Clarke: "The difference for us is the level at which we approach the customer. The issue is that the customer values TFC because of TFC's ability to help them make more money by designing a better product. We have a relationship with customers based on their respect for our ability to provide good technical knowledge as well as good service, then you're able to have a conversation with someone at a more senior level on the commercial side rather than just the buyer who is dealing with 100 fastener suppliers trying to get through the door."
The success of this model can be seen from the fact that in 2007, when the MBO took place, the company's turnover was £7m, while this year, despite what Clarke calls "the ravages of the recession", turnover is approaching £15m, with next year's figure expected to reach £18m.
Ultimately, Clarke believes this growth has come about because of the company's ability to maintain a strong reputation for expertise and quality, whilst also broadening the range of goods it sells. He says: "It's a nice model for growth because we already have that precious relationship based on trust."
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