Fleet News

Lloyds raises its game to stay ahead of rivals

THE past four years have been a busy time for the UK's largest contract hire group. A series of acquisitions, major expansion and now maintaining its 145,000-strong fleet has kept Lloyds TSB autolease on its toes.

But times are changing. The acquisition drive has slowed and managing director Nigel Stead has begun to lead the group into a new phase.

Lloyds TSB autolease's fleet still increased by 5,000 vehicles during last year but Stead is now focusing on improving its customer service offering rather than acquiring further assets.

He explained: 'During the past three years we've been preoccupied with business change but over the past year our objective has been to continue and become more innovative. We emerged from integration knowing we had to raise the game.

'A highlight of the past year has been getting the management team to focus on customer needs and customer care.'

It is this focused outlook which helped Lloyds TSB autolease secure the Iveco-sponsored Fleet News Best Contract Hire/Fleet Management Company Award for the second year running.

The judges praised the group for its product range and top quality customer service skills.

The judges said: 'Whatever product a fleet is looking for, Lloyds TSB autolease seems to be able to provide it.

'Backed by strict service standards and the latest technological innovations it has introduced new services to help fleets monitor drivers' mileages more closely, new maintenance software, a system for brokers, a new commercial vehicle unit, a cashback scheme and an affinity website that rewards customers in larger companies with discounts on anything from cars to holidays, insurance, chocolates and flowers.

'Behind it all is a spotlight on must-win battles, including customer service and people skills.'

Lloyds TSB autolease performed strongly in the Landmark CSI survey into customer service completed earlier this year. The survey polled more than 11,000 fleet executives on their views of customer service provided by leasing companies.

The average customer satisfaction rating in the survey was 72.13% but Stead thinks the industry could do better.

Despite securing the Fleet News award and a strong position in the Landmark CSI survey, Stead is adamant that the group will not become complacent and, he believes, neither should the industry.

He said: 'The leasing industry does not appear to be rated as highly as it could be and I think the industry needs to raise its game. In the Landmark survey there was an average of just over 70% for the service rating approval. This is good for the industry but in other sectors 70% is not seen as being that good.'

Stead sees innovation as being one of the main challenges facing the group this year.

He said: 'As a business we want to find ways of bringing services to the market and benefits to the client. Our Advantage scheme is the sort of initiative we want to extend as it is a benefit to our customers and to us. It increases our efficiency and as we can share the benefit, it brings greater client loyalty.'

The Advantage scheme rewards large customers with a cashback scheme for using specific select services. Customers who use a certain brand of tyre, windscreen, rental car or who source their vehicles through a preferred network earn bonuses that reduce costs.

On average this can amount to about £80 per vehicle during a three-year contract, so a fleet of more than 1,000 vehicles could see a cashback bonus of £80,000 in three years.

Other initiatives introduced by Lloyds TSB autolease last year included the autoleasequick.co.uk website, which offers a full service for brokers from quotation through to vehicle delivery.

A specialist commercial vehicle unit (SCVU) was launched in December 2003 and by April 2004 is well on its way to becoming one of the UK's largest commercial vehicle division with plans to have a fleet of 25,000 by 2006.

New software developments introduced include a transfer from the Translease to epyx 1link system and a new tax reconciliation database which gives Whitechapel, the group's car ownership division, the ability to calculate company and employee tax on a monthly basis.

However, despite introducing a host of new products and services, Lloyds TSB autolease is still up against the same challenges as other players in the contract hire market.

Issues such as health and safety, block exemption and residual values continue to dominate the headlines and affect the way contract hire companies work.

Stead believes duty of care is the biggest issue facing contract hire companies and has employed a specialist team member dedicated to dealing with the issue at the company.

'Lots of businesses do not understand the importance of health and safety and duty of care for themselves or their drivers,' he said.

'First you have to make sure you understand it. How the law is implemented, what responsibility falls on the company and how to ensure that responsibility is met.

'Most businesses need advice, which is the key issue. A company could be liable if staff were found to be in an unroadworthy vehicle.

'A lot has been documented about the problem but it needs to be a serious message as one day it will go wrong for someone,' Stead said.

Despite the fear of health and safety cases for industry groups, the company car remains a key benefit, according to Stead.

Lloyds TSB autolease has seen some evidence of the perk car user moving back to the company car market since changes to the benefit in kind (BIK) taxation system.

He said: 'Groups which previously had low business mileage can now choose prudently with low emission vehicles, and the provision of a car as part of a benefit remains a powerful incentive.

'More choice is now being given which includes coupes and cabriolets. It is not good to restrict a driver's choice because the more choice you give, the happier is the employee. A properly managed car policy with as much choice as is economically viable is a good human resources strategy.'

Looking towards the future, Lloyds TSB autolease plans to continue its drive to perfect customer satisfaction.

The group's main challenge, according to Stead, is to improve in terms of the products and services offered to customers over the long term. However, the mantle of being the largest player in the market also brings challenges.

Stead explained: 'Through internal training we are constantly striving to assist and treat customers as personally as we can.

'But we do struggle against the perception that a big company is slow to respond and less willing to understand and meet the needs of smaller customers. Our strategy is to ensure this does not happen.

'Small leasing firms can often succeed on the back of this, but can sometimes lose out in scale. I believe that in this market there is room for very large and very small companies.'

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