Stretch Your Fleet Dollars

Salespeople are supposed to drive revenue and profits for your firm. But many reps actually spend much of their day driving cars. Like any other sales function, driving can be done professionally and productively at cost-effective rates, or it can be done amateurishly and wastefully, losing dollars or time on the road or in the repair shop.

And reps are not the only ones who have a stake in smart sales driving. Administering a sales fleet can suck up major time from managers or clerical staff who are supposed to be doing something else. Chances are, especially for a small fleet, these part-time fleet managers will not be terribly efficient at getting the best prices or making the wisest choices about vehicle maintenance or replacement.

Major national fleet firms such as CitiCapital Fleet, which focus on fleets of 50 vehicles or more, can offer significant savings in both money and time to busy sales managers, according to Mike McCollum, senior VP for business development at CitiCapital. “First, both vehicle manufacturers and maintenance firms offer programs designed to reduce the expenses of fleets,” McCollum notes. “If you work through a company like CitiCapital, you are more likely to know about and be able to take advantage of these special programs.”

Managers can do their own research on good car and repair deals, of course. But this eats up time, especially for executives who do not specialize in auto markets. Fleet service firms know the market and what’s available because they deal in it every day, in the kind of volumes that get suppliers’ attention. And their expertise is especially valuable for a geographically dispersed fleet. “We work with national repair firms and companies like Goodyear and Firestone, so you don’t have to call all around the country,” McCollum emphasizes. “You don’t want your reps or managers spending a lot of time just to save five dollars on a new tire.”

That is the second major advantage of having a fleet policy: saving time on the details. “Sales drivers just call one 800 number wherever they are, and they will be directed to a quality repair shop in the network. They will usually get pricing lower than retail prices, and it all happens automatically, without the driver wasting time negotiating or asking for it.” And managers do not waste time with multiple calls or invoices. Most fleet business is handled through one contact number and can be paid through a single monthly invoice.

Fleet firms assemble all the expense data under fleet-maintenance programs and report to their customers both totals and significant exceptions. “We can then consult with them and point out areas for additional savings, either in the type of vehicles driven or through another control program,” McCollum says.

The spread of Internet tools brings more control and convenience, as well as saving time for fleet drivers. “Not only do managers get the data online, but you can choose to let your drivers have access too,” McCollum says. “They can order their own cars online and check on delivery status. It’s a lot easier than making a bunch of phone calls and leaving messages.”

Discounts on pricing without haggling, expert management without hiring expert staff, and handling all the administrative details quickly and inexpensively – these are just a few of the major savings a good fleet firm brings. And they count most for those firms that do not have thousands of cars over which to spread the cost of in-house fleet management.

So instead of endlessly choosing tire shops, maybe you should be choosing a fleet firm to do it all. You should be looking for a firm you can build a long-term relationship with, because the more they know about your fleet and your business, the better they can help you. Each fleet firm has its own ‘personality’: it does some things better than others do and operates in its own distinctive way.

Enterprise Fleet Services, which specializes in local management of fleets of from 15 to 125 vehicles, offers several maintenance programs that could save you money or avoid expensive downtime for reps, according to Steve Bloom, VP fleet services.

The first program is maintenance management. Drivers can use a special card to seek either scheduled maintenance or surprise repairs at up to 650,000 authorized centers. Regular work or repairs under agreed limits is done automatically. Repairs exceeding these dollar limits must first be approved by one of Enterprise’s 40 auto repair experts before it becomes an expense to your firm.

Enterprise thus manages the regular maintenance to hold total costs down and protects you against unnecessary or over-priced work. Those are the fundamental advantages of any good fleet-maintenance management program. Neither managers nor sales drivers must be experts in vehicle maintenance. You have an expert watching over your shoulder.

But there are spin-off benefits as well. Enterprise records all maintenance expenses by vehicle, so customers can track their expenses and make money-saving decisions. For example, both maintenance and fuel expenses usually rise as vehicles age. Combine these expense trends with knowledge of new- and used-vehicle markets, and you can choose the absolute best time to replace your sales vehicles.

Of course, most experienced drivers know these rules are true on average. But by tracking maintenance for each car, you can solve the replacement puzzle exactly. And you can spot the lemons that may need to be replaced earlier. “If you see a car that is starting to cost a lot, we can say, ‘This one doesn’t look so good; why don’t we pull the trigger now?’” Bloom notes.

Enterprise also offers a truly distinctive maintenance program, one under which sales fleets pay a fixed monthly charge per vehicle. Enterprise handles all expenses, except for oil changes and damage from accidents. “I don’t know anyone else who offers this program,” Bloom says. “A lot of companies appreciate this service because, for budgeting purposes, they know they have a flat level of spending over the whole lifecycle.” Monthly rates vary by type of vehicle and driving patterns, but once rates are agreed upon, Enterprise takes the risks.

Enterprise believes it can offer these kinds of services and save more for small fleets, partly because of its decentralized approach to fleet management. The company operates out of 45 offices nationwide and has more than 400 remarketing experts to sell used cars for best values. And its repair experts speak Spanish as well as English.

Most major fleet firms now have sophisticated systems for tracking and managing fleet vehicles and making this information available over the Web to both sales managers and drivers. The best fleet systems integrate seamlessly with clients’ enterprise resource planning (ERP) systems and concentrate on providing each manager exactly the information he or she needs to control expenses and boost sales productivity.

PHH Arval recently won the Brio Award, jointly presented by Forbes, Computerworld and Intelligent Enterprise magazine, for its online fleet management tools. The key, according to PHH marketing VP Greg Corrigan, is designing information systems around the customers’ needs. PHH fleet data can be easily passed into clients’ human resources systems, which need information on drivers for tax purposes, or to their financial systems to trigger automatic payment of invoices. It all happens automatically, without cost or staff time. “Directly linking fleet data with ERP platforms such as SAP or Oracle means you get a higher return on investment,” Corrigan says.

The other distinctive feature of the best fleet information systems is making the data meaningful for fleet management. PHH’s system allows clients to understand exactly what is going on in their sales fleets, even if they have out-sourced most of the decisions to PHH. “Managers customize the exact reports they want to see, when they want to see them, and in what form they want to get them,” Corrigan explains. “We understand what information is important and who it is important to,” Corrigan says. “You have to get the right numbers to the right person at the right time.”

Enterprise, CitiCapital, PHH and other major leasing firms offer similar menus of services to their clients, all designed to remove major hassles and headaches from your desktop.