By Theo Rennenberg
Many manufacturers and their dealer networks are challenged by two seemingly opposing needs related to large fleet and major account customers:
1. How to develop and execute innovative solutions that lower their customer’s Total Cost of Ownership (TCO); and
2. How to sell new and used equipment in order to maintain market share that will generate more service and parts revenue.
In order to balance the need to sell more equipment while also helping customers control and lower their TCO, many manufacturers are becoming more of a solutions provider, as well as a provider of equipment, parts and service.
Manufacturers in turn have either chosen to create their own systems internally or utilize third -party providers who help them manage and integrate maintenance expense and usage data from multiple sources across a customer’s national or global footprint.
These solutions range in complexity from invoice processing and aggregation services (monthly statement billing), to outsourcing the entire responsibility of fleet management for the execution of usage and application based Lifecycle Asset Management (LCAM) solutions, meaning the use of service requirements and repair data to proactively manage the lifecycle(s) of equipment in specific applications.
These solutions are growing in popularity among large fleet customers as more and more continue to transition from a decentralized to a centralized purchasing approach.
Centralized purchasing entities in turn look for simplified and standardized leasing solutions that also have a significant impact on TCO.
When major account teams work with large fleet customers, it is essential that they know their finance partner is prepared to meet the challenge and has a dedicated team to support and assist their customers throughout the lifecycle of the products being financed.
For healthy, long-term manufacturer/major account customer relationships, providing attractive monthly payments is simply not enough.
Such finance partners need to be ‘Fleet Centric’ in that they must understand the needs of this specific customer base and have knowledge, resources, and leading-edge tools available to support their needs.
Some of the tools a ‘Fleet Centric’ leasing partner should have include, but are not limited to, the following:
• A high level understanding of the importance of fleet management and its role in helping the manufacturer control TCO for their customers.
• Dedicated Subject Matter Experts (SMEs) on New Lease Accounting rule changes.
• Dedicated Fleet SMEs. • ‘Fleet Centric’ financial services available-such as customized monthly fleet reporting, cost per hour solutions, monthly statement billing, and fleet inspection services.
• Demonstrate a willingness and financial ability to develop new services.
• Customer-facing, on line tools to view fleet information and agreement details.
• Bundled pay options for lease with maintenance billing, and service-based contracts.
• Special structuring options for non-standard equipment or applications.
• Strong History providing Master Lease Agreements
• High-level understanding of financial depreciation of assets in different lifecycles, usage and industrial applications.
• Willingness to finance existing fleets (including new, refurbished, remanufactured and used equipment).
• Ability to provide sustainable end-of-lease and end-of-equipment life solutions.
As companies continue to look for ways to do more with less, the subject of fleet management and TCO will gain more prominence. Make sure your finance partner has the experience, know-how and products available to help you retain and attract more of these customers.
Theo Rennenberg is the Fleet Asset Manager in the Americas Construction, Transportation and Industrial (CT&I) Business Unit of De Lage Landen (DLL) Financial Services, a wholly owned subsidiary of Rabobank. He can be reached at email@example.com.