Fleet News

Guest opinion: when the best can beat the biggest

WHEN it comes to leasing, big is not necessarily beautiful, argues Paul Talbot, managing director of Bedford-based independent fleet management specialist IFC.

'One of the enduring characteristics of the fleet market over the past five years or more has been the pace and depth of the consolidation that the industry has witnessed and the astonishing degree of polarisation.

As the big operators have grown to a size hitherto almost unimaginable, swallowing up many of the medium-sized or smaller players in the process, the number of independent companies has inevitably taken a fall.

And many of the largest companies are now owned by high street, foreign or investment banks.

This year's FN50 study showed that of the top 10 companies, the overwhelming majority were bank-owned and the largest, Lloyds TSB autolease, had a fleet size in excess of 142,000 vehicles. Many run a huge number and it must present a massive logistical problem just to identify, let alone manage.

Between them, the top 50 companies now control some 1.36 million vehicles, the highest recorded since the study started in 1998.

Within that simple statistic, it is the degree of polarisation that is most marked. The top 10 mainly bank-owned leasing companies now control about 908,000 vehicles or over 66% of the total FN50 fleet, an astonishing proportion.

But, while big may be beautiful in terms of shareholder returns and retained margins for the financial parent, is big really beautiful to the people who matter most in this simple equation – the customers?

Delivering top quality customer service is vital to ensure contract retention and renewal, but the current trend towards giant yet cumbersome fleet operators inevitably means the fashion tends towards the call centre and impersonality rules the roost.

When you as the customer cease to be a name, but become a cypher in a much greater whole, can a truly first rate personal service ever effectively be delivered?

It's an issue that has obviously exercised the minds of many of the UK fleet industry's corporate customers, and while some are undoubtedly happy to be very small fish in very large ponds, others still want that personal individual level of first rate customer service. That means talking to names, and not referring to numbers.

Take one of the largest global brands on the planet, food giant, Heinz. While undoubtedly a company that knows more than a thing or two about the economies of scale in mass production items, such as tins of baked beans or bottles of ketchup, when it came to the several-hundred strong UK car fleet, the last thing the company wanted to be was a number on a list.

When presented with a need to restructure its fleet operation, Heinz entered into an online tendering process that attracted bids from some of the largest fleet operators in the UK – and one from my own, a small, independently owned fleet management operation on the outskirts of Bedford.

That Heinz chose us, after a lengthy selection process that included visiting the premises of all those on the final shortlist, rather than the big boys, says everything about the level of personal service and support that it believes we can provide its management and its drivers.

Because we can give this contract our almost undivided attention – not strictly true as we have other major blue chip customers who also warrant the highest levels of customer service – manage it effectively, bring in cost-efficiencies and provide a higher level of support to the company's drivers than its previous suppliers, Heinz has entered into a five year relationship.

We will be providing a bespoke, customised level of service, support and management, not reaching for a standard package from the top shelf, dusting it off and trying to make it fit a new set of customer circumstances.

Thankfully for the smaller independent fleet operators like ourselves, for the many UK corporate customers who still demand high levels of personalised customer service and support, not off-the-peg, one-size-fits-all fleet solutions, the answer unequivocally is no, not always.'

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