A ‘pay on results’ fleet management product has been launched by PVS Group.
Called Consort, it is based on the principle that PVS will agree targets for savings in key areas with new clients and only be paid if and when they are achieved.
PVS managing director Marcus Puddy said: “Anyone who provides fleet management services and products will tell you that the biggest sales hurdle to clear is to convince people that adopting your recommended measures will have the predicted results. Yet we know that we can save an average of something like £1,200 per vehicle every year for a typical client if a range of managerial strategies are adopted. Our forecasts have a very high level of accuracy. It’s just a question of overcoming that initial resistance.”
Puddy explains that PVS Consort is designed to remove that “scepticism” by placing the company’s “credibility on the line".
“We only get paid if the ideas we suggest are successful. We believe that this is potentially a very convincing approach,” he said.
The savings available will be based on recommendations from PVS covering areas such as expenditure on fuel, servicing and maintenance, and risk management but could extend to vehicle funding, choice lists and more.
“The greater the degree of change that the customer is willing to contemplate, the greater the potential savings,” continued Puddy.
“What we are expecting is to be asked to implement a few, simple measures initially and, once these have proven successful, to be allowed to do more.”
PVS is deliberately leaving the product’s structure flexible but, in most cases, it expects to charge on the basis of taking a percentage of the savings made or being paid a set fee once a pre-agreed target was reached.
“We’re deliberately leaving this quite open,” said Puddy. “Obviously, we have a good idea of what we believe we should be earning from such an arrangement but how that payment is structured in terms of the targets we are set is open to negotiation.”
At a point in time when businesses were looking to reduce costs because of the general economic impact of the coronavirus crisis, he added that the potential customer base for this kind of product included any company that operated more than a handful of vehicles.
“Many, many different types of organisations are finding themselves under budgetary pressures and the no risk approach we are offering has obvious appeal, we believe,” he said.