Fleet News

In the spotlight: BT Fleet

Among the quick-win propositions he believes can be shared are the company’s experiences in fleet utilisation and downsizing; with cost a primary concern for businesses, these areas are likely to find a welcoming audience.

But there will be more than simply fleet management services on offer. BT Fleet has just signed an agreement with a funding provider and is about to take tentative steps into contract hire provision.

This will be the first time that it will offer a funding option for its external customers.

“We have to be agile how we do this so we are going into partnership with a well-known funder,” says Bowen.

“We’ve not found a shortage of people that want to do this with us because of our uniqueness with our fleet management and workshop proposition.

"Securing funding hasn’t been a problem because of our BT brand and reputation.”

Bowen’s growth targets have been set with only fleet management in mind. Anything else on top from leasing is a bonus.

The fleet management customer base is centred on a core of 10 large organisations, van-dominated businesses like National Grid, Group4 and the AA, supplemented by ‘pay as you go’ business with small fleets local to its workshops.

Dubbed ‘retail business’ by Bowen, this small fleet element is worth £3m.

Nevertheless, the bulk of the revenue comes from just 10 companies. The risk isn’t lost on Bowen, and explains his determination to grow the customer base.

“If we lose one of the 10 core accounts it’s very significant so as well as the growth opportunity from the middle market, it’s about de-risking the business and making us sustainable going forward,” he says.

In two years’ time he anticipates a customer base of 250, averaging 500 vehicles apiece. It’s a bullish growth plan – but is it reasonable?

“We have an opportunity to go to customers and offer them a percentage discount on their SMR costs.

"Our prospect list is very long with customers that do their own repairs; they can sell their workshops and we can do it for less money with guaranteed costs,” says Bowen.

“I’m confident we will get to £75m; I’m confident that we will continue to take vehicles of the BT fleet and reduce the cost of ownerships; and I’m confident we can take that to market and show customers what we can do for them.”

Telematics trial to identify efficiency

BT Fleet has recently started a telematics trial looking at working patterns, how vehicles are used and who is using them. This will help it to establish whether vehicles are frequently going to the same place, whether they are being under-utilised and whether there is duplication on the routes.

This is stage one. Next will be an assessment of vehicle efficiency, sharing and pooling opportunities.

“We have already pooled some of our specialist vehicles at BT; we could roll this out to the rest of BT where is it one van for one person,” Bowen says.

As with all BT Fleet initiatives, the challenge will be packaging up the programme to take to market.

BT Fleet is also looking at selling more services into its customers. One area is the benefits of using its network of 62
workshops.

External customers will only tend to travel half an hour to a workshop which might not be one of the BT Fleet facilities.

“It can still be more economical to go further to one of ours because it’s more efficient rather than using an external supplier,” says Bowen.

Round-the-clock servicing option

The 62-strong network of workshops is BT Fleet’s unique selling point. And it’s one that is likely to strengthen as all-night servicing, mobile services and fixed price agreements become a reality.

Mobile servicing is already under trial at BT Fleet’s Enfield workshop with a couple of clients, while all-night opening for larger clients is only a matter of time, according to Bowen.

“I’ll be surprised if it doesn’t happen within the next year.”

However, the decision won’t be taken lightly. It will first involve discussions with customers to understand if they really need all night opening or extended hours instead. Alternatively, a mobile solution might be a cost-effective option.

“Opening all night will cost us more and cost the customer more,” he says.

For BT Fleet’s customers, it all comes down to cost – both reducing it and having certainty for budgetary planning – and keeping vehicles on road.

And cost certainty ultimately means fixed-price servicing over the term of the contract.

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Comments

  • tosh - 28/01/2014 19:30

    BT Fleet are living in cloud cuckoo land if they think you can pool vans in open reach. Most engineers work from home, they all have their own tools onboard and there is no way an engineer will strip his tools off every time he has a day off.

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