Excellent customer service and bespoke fleet solutions are phrases in the vocabulary of virtually all managing directors of leasing companies with which we work as automotive research and development specialists at apd, as they battle in an ever-toughening marketplace to differentiate their business from the competition.
I fully agree with that philosophy and many of today’s contract hire and leasing companies have, in recent years, transformed their businesses to deliver an increasingly high level of service with innovative products.
However, for many end-user fleets, the most frequent ‘contact’ that fleet operators and their drivers will have with their leasing company is via their approved dealer network, even if the former handles the initial booking-in process.
Dealers, whether franchise or independent will, in the majority of cases, be under entirely separate ownership to the leasing company. However, to fleet operators and their drivers, the fact that they are directed to use an approved dealer is naturally seen as an endorsement and therefore an extension of the leasing company’s own business, albeit a sub-contracted element.
Too often the approved dealer – in effect, the public face of the leasing company – does not live up to the expectations of the customer, and research we conduct at apd frequently shows this to be the case. The question is, is it always entirely the dealer’s fault?
There are many excellent dealers nationwide across the various franchise networks, but almost every fleet operator and driver will tell a story of how a dealer let them down, whether it was in relation to a new vehicle or a service, maintenance and repair issue.
Service level agreements (SLAs) and key performance indicators (KPIs) prescribed by leasing companies to their approved dealer networks should be fair and balanced. If too prescriptive, or restrictive financially, it can be a recipe for disaster when a driver of a highly-valued customer of a leasing company receives indifferent service from an approved dealer.
Surely the dealer has a choice – they don’t have to sign an SLA, do they? In reality, they do sign and this is the conundrum.
Following last year’s slump in new car retail sales – down 10.3% year-on-year – while fleet and business sales were down just 0.3% year-on-year, dealers recognise the importance of the fleet sector to their future prosperity and feel compelled to agree to SLAs that they believe will give them the security of volume.
This should not be seen as an opportunity for a further tightening of SLAs – quite the opposite. The dealer is an essential component and if not recognised, respected, nurtured and supported by leasing companies, a breakdown in relations, similar to that happening between supermarkets and their suppliers, could occur.
If this was to happen, the danger is not only of the fleet customer receiving a poorer service as a result but, even worse, perceives this to be the case, tarnishing their relationship with the leasing company – perhaps forever.
It is in the interests of the dealer network to work hand-in-hand with leasing companies to deliver a first-class service to their mutual fleet customers.
Many fleets acknowledge and recognise the difference a well-motivated and rewarded approved dealer network can make to greater customer satisfaction and retention. Now is the time for leasing companies to develop these relationships by working with them to raise standards and deliver service excellence.
Those that do so will reap the benefits and quickly be seen by the fleet sector as an elite leasing provider operating on a value-for-money principle, rather than price curve. In summary, leasing companies must remember the key role played by both independent and franchise dealers and ensure SLAs and KPIs are tough, policed, but – importantly – fair.
As someone famously remarked, there are ‘three people in this marriage’ – in this case, the leasing company, dealer and end-user fleet.