Fleet News

Tougher times force suppliers to raise game

A PREDICTED slowdown in the growth of outsourcing could present fleet managers with a major opportunity to demand higher service levels from suppliers, a new report suggests.

Experts predict that in a maturing European fleet market, and especially in the UK, growth for businesses offering outsourced fleet management services is becoming harder.

And the fact that sourcing a new customer is more expensive than retaining existing ones will force suppliers to ‘adopt successful customer retention strategies’, the study says. In other words, they will have to provide better service than ever, and fleet managers will hold the whip hand.

Growing Outsourcing Business: The Fleet Management Example forms part of a wider report called The Future of Outsourcing compiled by business intelligence company Datamonitor.

The company predicts that a 5% growth enjoyed in the European market during 2004 is expected to slow to about 3% by 2010.

In an effort to combat this, companies are likely to focus on their customers’ requirements, it adds.

The report said: ‘In order to maintain the currently high levels of outsourcing with medium and large size corporate clients, companies need to adopt successful customer retention strategies. The costs involved in retaining a customer are far lower than those incurred trying to expand the client base.

‘Offering flexible tailor-made solutions suited to the requirements of existing clients, in the form of short-term leasing and pan-European solutions, leads the way ahead for fleet management companies.’

But Liz Hollands, fleet manager at property advisors DTZ Debenham Tie Leung, said companies should focus on customer service rather than niche service offerings if they are to retain customers.

She said: ‘As the report says, it is much cheaper to keep an existing customer than it is to source a new one so why do many companies keep getting basic services wrong?

So, rather than just concentrate on offering niche products, they should instead look at their service offerings.

‘A slowdown in the market presents fleets with the ideal opportunity to demand high levels of service.’

This month’s Hit for Six Conference in Oxford on September 20 will see the official launch of a major new initiative designed to set an industry benchmark for industry suppliers.

The final version of the Charter for Fleet Suppliers will set out a range of key standards fleets wish their suppliers to meet.

The charter, based on comments from fleet decision-makers about the service they wish to receive from industry suppliers, covers 13 key points, ranging from access to customer service staff to treatment of third-party suppliers.

  • For details of the Datamonitor outsourcing report, visit www.datamonitor.com.
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