Fleet management is a popular “value-added” service for many of today’s lift truck distributors. However, time and again, many distributors who offer this service do not get the best results from doing so. One problem is a lack of investment in fleet management; but this is not the biggest issue. The most common mistake dealers make comes from not communicating with their customers.
Distributors fear the customer knowing how much it costs them to manage their equipment. This fear is because fleet management is very profitable business for the dealership. To borrow from an old nursery rhyme, the dealer does not want to kill the goose that lays the golden egg. However, if you care about your customers and want them to be competitive in the markets they serve, then you will change that fear into advocacy of the value that fleet management brings to your best customers.
The distributors who are the most open with their customers are often the dealers who generate the most profit. A look inside such dealerships shows that they strive to share, analyze and use data to take action that will result in lower costs, safer operations and higher productivity for their customers.
Customers are willing to pay more if they perceive value. The long-term savings customers reap outweigh the slightly higher investment they make for a fleet management program. It is to the dealer’s advantage to make sure the customer is convinced of this.
Avoid the Pitfalls
Even dealers who do share their profit information still face another challenge. In business, we all know that data is of no value if it does not point out strengths and weaknesses and lead us to action to improve our business results. Presenting the data in a way that exposes opportunity to improve is critical. In fleet management, the dealer can tell the customer how much their maintenance costs in terms of cost per hour, utilization, cost of damage or abuse, tires and the like, but often does not take the next step in finding ways to save the customer money.
So how can a dealer avoid the pitfalls and perform effective fleet management? Once you have the proper mindset, there are tools available at distributors’ disposal to make fleet management easier. Some of those tools may already exist at your company, such as a feature of an existing software system or report writer—anything that will help extract fleet data in a useful format will work. Before you rush for outside help, look inside at your current system for ways to point to equipment problems or high-cost, low-utilization, repeated problems with specific equipment.
If your internal system is not sufficient, then search for a fleet management partner you can trust. Some potential outlets include business software companies, fleet management companies, OEMs with fleet management programs, report writers who can bring your data into an access database and develop reports from the data, or some off-the-shelf software. While likely more affordable, off-the-shelf software is often limited and not compatible with existing business systems.
A Six-Step Guide to Fleet Management
• Don’t be afraid to share the data.
• Look at your business systems and figure out your capabilities.
• Find a partner who tracks data and creates reports that allow the customer to make decisions.
• If necessary, change systems so you can provide your customer access to their data.
• Train your team on how to interpret data and determine actions from the data.
• Build on your successes by developing marketing materials on the value it has brought. Share this in your marketplace to build your business.
Identify in your market the accounts with five or more forklifts, as that is the number where fleet management starts to matter to the end-user. At that point, the cost of maintaining the fleet becomes significant in their cost of operation. Customers usually respond well after seeing the value of the data and their potential savings. However, herein lies one of the big challenges distributors face with their fleet management programs—developing attention-getting presentation materials.
First, you need trained personnel who have a passion for asset management. You want your messengers to be people who can help customers understand the value of your fleet management data and how the approach will save them money, operate safer, increase productivity and maximize performance.
Next, find the metrics that have the greatest impact on each specific customer. Examples include utilization percentage by unit, maintenance cost breakdowns of a particular machine or a parts report showing repeated same-part usage. Cater your presentation around these metrics and point out the actions necessary to favorably adjust the numbers for that customer. Highlight those values in a marketing piece that your team can use to present your system or partner.
You Are Not Alone
It all may seem daunting, but distributors shouldn’t think that they need to fight the fleet management battle alone. Manufacturers have the capability, and should make the effort, to help their distributors in this endeavor. In order to assist their distributors, manufacturers should have systems to support their dealer base. Manufacturers should develop an independent fleet management team, either internally or by partnering with a trustworthy third party, that will specialize in supporting distributors and end-users. That support should include educating regional managers on the value of fleet management and teaching the dealers how to present that value to customers. Support should also include assisting dealer personnel in interpreting data, such as top parts consumed, top damage repairs, utilization, tire life, etc., that can expose customer problems and improve future products.
Fleet management will continue to be an integral part of a distributor’s business in coming years. If you are not offering it, at least for your larger accounts, someone else is. If you are offering it but performing it poorly, you risk losing that business to a competitor. Is that a risk you’re willing to take?
|Meet the Author
Steve Ross is a material handling consultant for SLR Consulting Services, located in Orlando, Florida.