What is your fleet worth? Sure, you can calculate the value of your vehicles as tangible assets, but this question isn’t really about a dollar figure on a financial report. The actual worth of your fleet is tied to driving a positive connection with your customers and supporting business success. What is the value of your employees arriving on time and ready to deliver your products or services? And since your name appears on all of your vehicles, what’s the value of your drivers’ appearance and behavior? What's the cost of the impression they leave on customers?
Investing in your brand
The ways in which you invest in your fleet can have a profound impact on your company's image. Here’s a look at five important areas that can affect your brand.
Strong brands come from financially strong companies, so the amount of money your company allocates to the fleet is fundamental. This includes how your fleet budget will impact both short- and long-term strategic goals. Remember, the capital investment includes the initial acquisition expense and the full term of the lease or loan payments.
What is the most effective way to allocate your capital? Fleet investment decisions have a direct correlation to your company’s overall ROI, so consider all of the possible options – cash purchase, lease, and financing.
Perception is reality, which is why investing in the appearance of your vehicles is so important. You want the sight of them to make a lasting and positive impression. That means making sure your vehicles always look their best, paying attention to wear and tear, and promptly replacing vehicles in bad shape.
You can promote a positive brand image by applying a consistent, annual replacement strategy rather than replacing vehicles solely based on their age and mileage. Also relative to your financial strength, this strategy helps avoid age and mileage expenses that can drive budget forecast swings of 10 to 15 percent. You don’t want to diminish the public’s faith in your commitment to quality. If it looks like you don’t care about your image, why should your customers care about you?
You’re keenly aware of the tangible costs of driver behavior when it comes to vehicle wear and tear, and how it ultimately impacts your balance sheet in the short-term. Make sure you’re also mindful of how driver performance can potentially impact the long-term value of your brand. Your employees' driving behavior has an even greater influence on public opinion than your vehicles' appearance. If they are thoughtless or careless on the road, the lasting negative impression is tied to your company's name. Even behaviors like idling reflect your priorities.
When you invest in driver training and driver policy enforcement, you strengthen your company’s culture and enable your employees to be strong brand advocates.
Your vehicles have to show up to meet your customers’ needs, but that can’t happen if they’re not well-maintained. A common mistake is postponing routine fleet maintenance to support business schedules or to create short-term savings. In the long run, vehicle expenses actually increase due to component failures. Also, costs related to lost work and revenue will resonate across your entire company.
Investing in vehicle maintenance is critically important to your brand. This includes complying with preventive maintenance schedules that keep vehicles in working order. It also requires having a trusted network of repair vendors who can get your vehicles back on the road ASAP.
5.Reputation for innovation
Where do you stand among your peers and competitors in terms of innovation? Investing in technology is important to any company seeking market leadership. For fleet management, that means integrating vehicle and driver data. Adding telematics is a game changer in terms of creating actionable data related to both costs and risks that you can address immediately.
Telematics technology paired with predictive analytics play a huge role in helping you avoid detrimental trends, identify opportunities to implement savings and efficiencies, and enhance your image in the minds of your customers.
For your biggest return on investment, you should be managing your fleet beyond just short-term capital and operating expenses. When you partner with ARI, you’ll never overlook all the ways your fleet spend is tied to your brand and your business objectives. We can help you establish a financial strategy for your fleet to serve as a tool that builds your brand and contributes to the long-term growth of your company.
YOUR FLEET IS AN INVESTMENT. AND IT’S TIME IT PAID OFF.
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About the Author
Christopher S. Hurren. EVP & Chief Financial Officer
Chris started his career with ARI in Canada in June of 2010 as Vice President of Finance. Then in August of 2013 Chris transitioned to Vice President of Finance at Holman Enterprises. Prior to working for ARI he worked for BMW for seven years, promoted to Corporate Controller.