Excelling at Fleet Work

Nov. 1, 2011
Partnerships with fleet customers can add another stream of revenue for your shop. But be ready to compete: Fleet operators look for high value propositions at low cost.

Doug Fernandez, president of Turnpike Motors Autobody in Newington, Conn., realized he could boost his shop’s volume by developing strategic partnerships with fleet customers—companies and organizations that use multiple vehicles to conduct business.

With the intention of bringing in a whole new category of customers, Fernandez began cultivating relationships with all kinds of fleet operations in his local area. Eventually, that strategy for easing the notorious highs and lows of the collision repair business paid off: Turnpike Motors landed partnerships with rental car companies, the police department, the fire department and the State Department of Transportation. Fernandez even began working with the University of Hartford to repair the school’s buses and shuttle vans.

Bill Hornyak, business development manager of fleet and manufacturing at Sherwin-Williams, says “It’s important to have other avenues for revenue to keep your bottom line healthy when you hit those slow periods. Diversification is really important for shops these days to help sustain the business.”
At Turnpike Motors, fleet customers now make up about 15 percent of the shop’s $4.8 million annual revenue.

Your shop could do the same. But obtaining these partnerships is highly competitive; you won’t be the only shop vying for this slice of revenue. You’ll have to offer competitive advantages at low cost to win fleet business.

Finding Fleets

Before you can develop fleet partnerships, you first have to identify your options—who and where they are. Remember, fleets aren’t only large trucks driven by utility or construction companies. Fleets can even be small passenger vehicles driven by taxi companies. If you’re located in an urban area, you likely have hundreds of fleet operations at your fingertips.

“We could get a better parts discount if we bought from another vendor, but we’re able to acquire more work from the dealership by maintaining that relationship in town,”     
—Andy Spence, owner, Mitchell’s Body Shop,
on buying parts from local dealers

Fernandez says one way to identify fleet operations is to simply drive around your local market and make observations. Take note of any organizations or businesses that have multiple vehicles driven on a regular basis. That may sound a bit elementary, but doing so will allow you to notice small vehicle fleets that you may have overlooked before.

Other fleet-finding tactics include:

• Electronic databases. Hornyak says subscription-based databases track vehicle fleets across the country. Shop operators can punch in their zip code to obtain a list of all vehicle fleets within a 25-mile radius of the shop.

Some of those databases are fee-based, and some are free. The free databases provide the name, address and phone number of the fleet operator, as well as the number of vehicles in the fleet. The fee-based databases provide similar data, but also offer specific names and email addresses for fleet managers, and plot their location on a map. Here are a few databases:

– Datamonitor: datamonitor.com

– DMDatabases: dmdatabases.com

– Fleet Directory: fleetdirectory.com

– Trulos Transportation Inc.: trulos.com

• Paint companies. Your paint sales representative should be able to offer insight for fleets that exist in your market, regardless of the type of paint you use, Hornyak says. For example, Sherwin-Williams has a license agreement with an electronic fleet database, and can easily provide a list of fleet opportunities to customers.

• Business networking. Fernandez suggests getting involved with your local Chamber of Commerce or a business-networking group. He says that helps identify large companies in your market that regularly operate multiple vehicles.

• Walk-in customers. Keep your eyes open and pay attention to the customers who are walking through your door, Fernandez says. You might realize that a repeat customer is actually a fleet operator. Once you recognize that, try to parlay it into an ongoing relationship.

Landing the job

It’s not likely that fleet operators will come to your shop and ask if you’re interested in working with them long-term. It’s your responsibility to express interest in the fleet organization, build their trust and ultimately land the job.

Hornyak says the best way to do this is to identify the fleet’s decision-makers and schedule a face-to-face meeting. Treat the meeting like a sales call, and tout the features, advantages and benefits that your shop offers. Don’t forget to mention an estimated cycle time for the fleet’s repairs and your shop’s capabilities, such as your equipment and technician certifications.

“Having those meetings goes a long way in landing these jobs,” Hornyak says. “It’s much more effective than hoping they pull into your parking lot on their own.”

Any competitive advantages you can offer to fleets will strengthen your sales pitch. Andy Spence, owner of Mitchell’s Body Shop in Jackson, Tenn., has five major dealerships in his market: Nissan, Toyota, Mazda, Ford and Dodge. He wanted to develop partnerships with each one to obtain their wholesale fleet work. But before those dealers would make any deals, they wanted to know what they would get in return.

“Fleet customers tend to care more about the cost of the job
than they do about the quality of finish. They want their vehicles
to look fresh and shiny, but aren’t worried about achieving showroom quality.”      
—Sharon Corey, collision shop director,
First Team Toyota-Honda Collision Center and
Hampton Chevrolet-Mazda Collision Center

Spence got creative. He offered to buy a portion of his parts from each dealership in exchange for repair work. That small financial incentive was enough to get the dealerships interested. Spence admits it’s not the most cost-effective way to buy parts since he could get them cheaper from other sources, but it’s worth it in the end.

“We could get a better parts discount if we bought from another vendor, but we’re able to acquire more work from the dealership by maintaining that relationship in town,” Spence says. “And that outweighs the extra cost on parts.”

But most fleet operations won’t have anything you can regularly purchase from them. So what can you do to help land their business? Consider whether these competitive advantages might tip the scale in your favor:

• After-hour repairs. It’s vital for fleet vehicles to always be on the road, especially for fleets with fewer than 10 vehicles, Hornyak says. The fleet business loses money every day that vehicles sit idle. For that reason, some fleet operators may not want vehicles tied up with repairs during business hours. You could offer to make repairs in the evening or over the weekend when the fleet customer is closed for business.

• Take care of the small stuff. Sharon Corey, collision shop director at First Team Toyota-Honda Collision Center and Hampton Chevrolet-Mazda Collision Center, says she will fix minor problems, like moldings that are falling off, for fleet customers for free. She says that’s an easy perk to offer to “wow” her fleet customers. “It’s not worth filling out the paperwork for a $20 repair because we know that extra service will help us get the big work down the road when the fleet customer needs paint or decals applied.”

• Competitive pricing. Fleet operators will often get two or three bids when selecting a body shop, and will choose the one that offers the lowest price. Spence charges fleet customers 10 percent less than his normal customers.

• Free car washes. Allow fleet customers to get their vehicles washed once a month for free, Spence says. That helps keep your shop top-of-mind during periods when the fleet doesn’t have any vehicles at your shop for repair.

• Benefits to employees of the fleet customer. Offer some kind of deal to the employees of the fleet customer, like a discount on details. That’s a perk the fleet operator can offer internally to his or her employees without spending any money. It could also give your shop some additional work with more personal customer vehicles coming in.

• Other extras. Consider onsite estimates in addition to vehicle pick-up and delivery.

Staying Fast and Affordable

Repair speed and cost are top priorities for fleet customers. Using a single-stage type of paint on fleet work can help you offer a low price andstill be profitable enough to make the job worthwhile.

“Fleet customers tend to care more about the cost of the job than they do about the quality of finish,” Corey says. “They want their vehicles to look fresh and shiny, but aren’t worried about achieving showroom quality.”

For that reason, Corey uses a single-stage paint on fleet vehicles, meaning she doesn’t have to apply clearcoat. That saves time and money. Corey is able to move jobs out the door faster by eliminating the clearcoat. And the paint is 25 percent cheaper than the paint Corey normally uses, which allows her to quote lower prices.

That cost-savings is the main reason Corey has been able to land and retain fleet customers, she says.

Sure, single-stage paint doesn’t last as long and the color fades faster, but the majority of fleet vehicles are white-colored anyway and don’t have color-fading problems.

The paint is still a quality product, Corey says. It still gives a shiny finish; to the naked eye, there isn’t much of a quality difference.

The car will still look great, Hornyak adds. It may not look so great seven years down the road, but fleet customers will accept that if they’re looking for an inexpensive repair with quick turnaround.

Diversify for Revenue

Adding fleet work to your company’s operations will require some time and energy. But Spence says it’s well worth the effort because of the additional revenue it cultivates.

“Fleet work is a good filler when business is slow,” he says. “It helps fill the gaps between customer repairs, and helps achieve monthly sales goals.”

Spence adds that fleet work comprises about 10 percent of his shop’s $1.8 million annual revenue.

That’s exactly why other shops should consider adding fleets to their business strategy, Hornyak says. Fleets can help collision repair operations deal with the peaks and valleys in revenue that are a routine part of doing business in this competitive, and often unpredictable industry.

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