Service Keys LMV Expansion

Tom Benic, who authored this article, is president of Thomas P. Benic & Associates of Pittsburgh, PA, the public relations firm working with LMV Leasing, Inc.

LMV Leasing, Inc. plans to open four new offices and double the size of both its national sales staff and its customer relations staff in 1988. This latest expansion plan is the most ambitious yet for LMV, whose dramatic growth since its acquisition by Xerox Credit Corp. (XCC) four years ago has placed it in the top echelon of national, full-service, commercial vehicle lessors.

LMV officials, however, stress that the growth to date has been controlled and that the newest expansion plans are part of a long-range strategy to increase size and services without adversely affecting present customers.

"Bigness for bigness' sake is a foolish objective," says Andrew Strauss, LMV president. "Service is the key point of competition in this business. Four years ago, we knew we had to grow to provide the kinds of services that fleet customers wanted. Fortunately, we had the backing from Xerox Credit to do that. But our growth has been internally generated," Strauss says. "We increased the sales staff and began adding customers, quite literally, one at a time."

 

Growth in Size and Services.

LMV went from 7,500 vehicle leases in the fall of 1983 to approximately 35,000 vehicles under lease or management agreements today. Management of Xerox Corp.'s 10,000-vehicle fleet was phased in during a three-year period culminating last year. Meanwhile, a fleet management department, which is now one of the largest in terms of personnel at LMV, was created from scratch. Today, two-thirds of the LMV fleet vehicles are enrolled in some level of this comprehensive program.

LMV's data processing operation was restructured to be a full-fledged management information service department; the staff was quadrupled, and services, such as on-line vehicle ordering, were added. The department now has in-house programmers creating new programs and enhancing existing ones for customers and internal uses.

Leasing to Individuals

The most innovative idea developed by LMV since the acquisition is its Custom Leasing Program that offers wholesale-level, open-end lease rates to employees of participating companies. Originally designed to serve the needs of Xerox employees, the program has now enlisted 25 companies and organizations (including Prudential, Heinz, Aetna, and Baxter Healthcare Corp.) with a total of 150,000 individuals. The Xerox commitment to LMV has made all of this possible, LMV officials readily admit. LMV's parent company is pleased with the results as well.

"This is clearly an acquisition that has worked," says William Montgomery, president of Xerox Credit Corp. "We wanted to grow the business, and it has grown. We realize that the automotive fleet business is tough and competitive, but we feel LMV has excellent potential, and we're solidly behind them."

David Corso, vice president-finance, says Xerox borrowing power and its ability to issue its own commercial paper has launched LMV into the same league as its much larger competitors. "The critical advantage of size is borrowing power," Corso notes. "We get that advantage through our relationship with Xerox."

Flexibility in Financing

Corso says LMV's traditional flexibility in handling customers' needs extends to the financing area. "We can finance a lease based on a prime rate - fixed or floating - or a published commercial paper rate. It's the customer's choice. We offer three different ways of billing: mortgage style, level depreciation, or plateau method. Again, it's up to the customer. The rate stays the same."

Strauss refers to LMV's "customer-driven" corporate philosophy to underscore the firm's commitment to service. The LMV organization has a "no problem" attitude, he says. "Our customers can even change their minds in the middle of a leasing cycle," he says. "They can change from a floating rate to a fixed rate, or vice versa. They can even change the term of the lease. We recognize that customers' needs change, and we're willing to listen and adapt. In my opinion, the future is bleak for companies that tell their customers 'our way or no way.'"

LMV's National Scope

Today, LMV's customer base is worldwide, primarily because the firm opened eight sales offices coast-to-coast since the XCC acquisition. LMV has regional offices in suburban New York, NY; Cleveland, OH; San Antonio, TX, and Los Angeles, CA, and district offices in Charlotte, NC; Chicago, IL; Denver, CO, and San Francisco, CA. New offices in 1988 are planned for Boston, MA; Jacksonville, FL; Cincinnati, OH; Kansas City, MO, and Dallas, TX.

The Pittsburgh office, which has been headquarters for the company since the firm was founded in 1952, has twice been enlarged since the acquisition and will continue to grow as the center for all internal operations. Pittsburgh is also a regional sales office.

"On a percentage basis, we have had the greatest amount of internal growth of any full-service commercial leasing company in the nation," says Strauss. "But we added staff and developed new programs before we added one vehicle to our portfolio. Based on the customer surveys we've conducted, we've achieved rave reviews. Customers like doing business with us, and our people genuinely try to fully satisfy customers' needs."

Stability in Personnel

Despite rapid growth, LMV has enjoyed stability among key personnel. John McKean, whose family founded the company as an expansion of its automobile dealership, is chairman. Strauss, who was named president and chief operating officer last year, was a vice president before the XCC acquisition.

Long-time employees, such as Jay Campbell, purchasing manager, and Mary Zoltak, contract administrator, have stayed, as has W. McCormick Wilson, manager-customer relations, who has more than 30 years of industry experience. Raymond Smith has moved from national sales manager to manager-used-vehicle marketing to replace William Watt, who retired last year along with Edgar Kimmell, controller.

"We've been successful in keeping key department people," Strauss says. "They have provided the stability that customers want. I would be hard-pressed to think of a single customer we've lost since the acquisition because of service." Key executives who joined LMV since the acquisition have come from larger corporations and have provided the experience needed to handle the transition from regional lessor to full-service national firm, according to Strauss. Corso was controller of Allegheny International's Realty Development Corp. Michael Saxton, general manager-operations, was a marketing and administrative executive with Leaseway. David Carmichael, general manager-sales & customer relations, was a senior sales manager with United States Fleet Leasing.

Experienced Sales Staff

Most of LMV's sales staff are industry veterans, Carmichael says. LMV has 11 regional and district sales managers and plans to add 12 district sales managers in 1988. The customer relations staff will grow from nine to 19 by the fourth quarter. Carmichael says the staff expansion will provide continued, gradual growth and will not overwhelm the internal operations staff. "System expertise at Xerox has positioned us well for future growth," he says.

Saxton indicates that LMV has the ability to handle more volume, while still providing top-notch service. "We've made significant advances in our management information services department, involving data processing and on-line computer services," Saxton says. "We've also tripled the size of our total workforce during the past three years, so that new business generated will be easily absorbed. We've not been distracted by acquisitions or mergers and have been able to put our house into tip-top shape."

The sales staff expansion will be conducted carefully, Carmichael says. "We have a very experienced, elite sales staff representing us, and we intend to maintain the same level of professionalism in the new people we hire. All of our district sales managers and regional sales managers are college graduates; a number have MBA degrees. Our average experience level is nearly 12 years," he continues.

"Our account executives come with industry experience, and then we train them in the various LMV departments for three to four months, before putting them on the front lines," he adds. "Our philosophy is that a well-trained, highly-motivated employee provides quality service." Saxton says LMV has a very definite mission: to have innovative product offerings, qualified personnel, and a state-of-the-art internal system. "Purchasing the car, delivering it, administering it, and selling it are the basics people pay us for," Saxton notes. "We're committed to doing those things better than anyone else."

 

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