For a service shop, fleet consolidation involving customers of yours can be a scary proposition. There is just so much uncertainty. Maybe you aren’t sure you will be able to handle the extra business. Maybe you have concerns that this new, larger fleet will include vehicles you aren’t as familiar with. For that matter, maybe you are worried that thanks to this consolidation, you are going to lose this business altogether.
For better or worse, dealing with this issue is a reality these days. Fleet consolidation seems to come in cycles and right now, we are in a period where there is quite a bit of consolidation going on. So it is important that you do everything in your power to position your business to be a beneficiary of consolidation and not a victim of it.
Fleet consolidation can have an effect on each part of your business, but today, we want to isolate the service shop and talk about the things you can do to put your shop’s best foot forward when faced with consolidation.
Take a long, hard look at your labor pricing, particularly if you haven’t looked at it in a while. Make sure your pricing is competitive. With the added business that you could see as a result of fleet consolidation, you don’t want to risk losing that just because your pricing is out of line with what the new fleet manager is expecting.
Lean on your salesmen a little bit as well. Make sure you have someone that you trust to push your pricing and offer specials to the fleet companies that you might find yourself working with. It would also serve you well to look at technician productivity. Could having a steady stream of work from this customer provide higher productivity, thus allowing you to lower your labor rate for this customer?
Tools and Resources
You may end up seeing nothing but the same units you always have, just with a different name on the side, but that doesn’t mean that you should assume that will always be the case. There is always a chance that a fleet manager comes to you and asks you to service a larger portion, or all, of the vehicles in the fleet. Before that happens, prepare yourself. Make sure you have the proper equipment, tools, and techs available ahead of time.
Immediately after fleet consolidation, conversations between your business and the fleet may seem a bit onesided. Often, they jump right into looking for data and information on the services you provide. But this should be an opportunity for you to gather some information of your own. Think about the concerns you have for your shop about whether or not you can provide the dedicated service that you are known for.
This is where asking for make, model, and components from the fleet can help you make future plans. Maybe you find out you are ready “as is,” but maybe you aren’t. Once you get those numbers, crunch them and decide if it’s right to add a couple of bays, hire a few more techs, replace that air compressor, or add that wash bay that has been on the agenda for a while. Don’t limit your thoughts and conversation to the here and now, but include possibilities and opportunities.
Either way, be ready. In a competitive market like we have now, turning away work because you aren’t ready to take it on could prove costly down the road.
As we covered in a recent paper, having a structured preventive maintenance program is good business to begin with. But it is also an area that needs to be considered whenever a fleet has consolidated.
Reaching out to the new fleet manager and walking him or her through a carefully-outlined preventive maintenance program will let them know that your shop is ready for the merger and that you can be a business partner for the fleet over the long haul.
In some cases, new fleet managers may know everything there is to know about the units that he or she just purchased. But often, that’s not the case and that’s where you can step in. You can offer them reports on the units that you have been servicing already.
Information on dollars spent, repairs made, parts used will give the fleet manager a sense of security that your shop is ready for the influx of new units and then some.
There is no magic wand you can wave that will guarantee that your business will be 100% ready for the challenges that come with fleet consolidation. And you can’t always guarantee that the new fleet manager will choose to continue in a business relationship with your shop.
But if you commit to winning their business all over again and follow some of the guidelines laid out, you will be well on your way to putting your business in the best position possible to succeed in an uncertain situation.
Karmak, Inc. is a leading provider of business management solutions for the commercial transportation industry. With more than 30 years of heavy-duty experience, we offer a unique approach combining innovative technology, strategic advice, and best practices. Our success programs produce measurable results by improving ROI, mitigating risks, and achieving operational excellence.
Serving more than 1,800 locations across North America, Karmak is an employee-owned company with headquarters in Carlinville, Illinois.