Securing Fleet Accounts
When Dave Romstedt took over as fixed ops director at Olathe Ford Lincoln back in 2000, he was eager to start calling many of the shots at the store.
Instead, he often fielded unpleasant phone calls.
In those initial days as fixed ops director in the Kansas City suburbs, Romstedt regularly received calls from disappointed fleet customers “wanting to know why we’ve had [their] truck for four days,” he recalls.
The more he received those calls, the more the situation gave Romstedt heartburn. Because, not only did the multitude of phone calls point out a shortcoming at the Kansas facility, but they also illustrated to Romstedt the need for quality fleet account maintenance in his area. Romstedt began to realize just how much potential fleet work his store was missing out on.
Thus, he came to a conclusion: Not only would Olathe Ford Lincoln refine the way it handled fleet work, it would also start securing every fleet account it could as a way to open up new revenue streams—throughout multiple departments at his dealership.
It’s never wise to ignore any component of your business, Romstedt notes. And, back in 2000, Olathe Ford Lincoln had turned its back on potential fleet work—work that offers a consistent revenue stream. He learned that more and more as he settled into his new position.
Olathe Ford Lincoln, which has been remodeled a handful of times over the years, had plenty of room in its service department—at nearly 30,000 square feet—to handle fleet work. And staffing has rarely been a big issue at the facility (the department currently employs 12 service advisors and 36 technicians).
Romstedt eventually realized that the business he helped run simply wasn’t as well rounded as it could be. He realized that he needed to take his facility’s resources and offer fleet customers unparalleled convenience.
As Romstedt analyzed financial figures at Olathe Ford Lincoln, he was left with the feeling that fleet work could help the store reach the next rung on the ladder. His reasoning was twofold.
“First, the people that run those fleets tend to be in charge of purchase dollars,” he says. “So, if I take care of those service needs, I’m going to position the dealership to be selling their next trucks―and it’s not going to be one or two; it might be 30 or 40.
“And then, it’s really all about relationships with those guys. If you keep their revenue stream going, they’ll keep yours going.”
Olathe Ford Lincoln had its outside parts and service wholesale fleet manager increase the number of onsite visits to potential customers, selling the facility’s “complete solution” for fleet work—one in which fleet vehicles aren’t just maintained, but are even picked up and delivered for some customers. When a new construction company enters the area to take on a project, for example, Olathe Ford Lincoln has representatives promptly visit their job site, letting that potential customer know that the dealership has the resources to help maintain their vehicles, if necessary.
In the last five years, Olathe Ford Lincoln has picked up several lucrative fleet accounts as a result of its concerted effort to reach out to consumers, typically spearheaded by Gene Yamada, the dealership’s outside fleet/wholesale parts and service manager. The dealership currently has fleet accounts with a national electric contractor with 20,000 trucks, as well as local police departments and the Kansas Highway Patrol, to name a few.
“You’ve just got to keep rapping on the door,” Romstedt says with regard to potential fleet customers, “to make sure they know you haven’t forgotten they’re there, and that you’re still interested in their business.”
The dealership focuses on offering fleet customers a quality repair and attention to detail. And, unlike some dealerships, Olathe Ford Lincoln now makes it a priority to address fleet work as fast as possible, Romstedt says.
The major change he implemented to help his dealership quickly address fleet maintenance was assign a specific advisor to each fleet account. The dealership currently has three service advisors that primarily write fleets.
That adjustment allowed those advisors to learn, in depth, how each fleet partner wanted their repairs addressed, and get used to factors like what repair elements require approval, and whether invoices should be emailed, or if drivers need to be communicated with in a specific fashion. All those tweaks added up to increased efficiency.
“It means income and revenue if [a fleet vehicle] is off the road for any length of time, so you always have to be sensitive to that,” Romstedt explains.
He has learned that, if you accommodate fleet customers with consistently solid service, they tend to be loyal. And, in turn, those fleet customers tend to spread the word about your store at gatherings like fleet management meetings.
“You always have to have an eye on receivables, understanding that some of those fleets, all of their billing and invoicing is done centrally on a national level,” Romstedt adds. “We try to take that into account when we set accounts up for them. So, we may have fleets that are set up on no interest until their account goes to 45 days past due, or 60.”
He does, however, make sure to keep tabs on just how fast fleet customers pay their bills. He also closely examines how profitable fleet customers are for his business, and whether they appear likely to offer consistent business in the future, as well if those customers are reasonable to work with (i.e., easy to get a hold of, when necessary).
Olathe Ford Lincoln’s service business has steadily grown over the last 17 years. And fleet work has helped fuel that rise.
Back in 2000, Romstedt’s first year as fixed ops director, the dealership’s RO count averaged 1,328 fleet and customer-pay ROs per month. In 2016, the dealership averaged 2,268 per month, representing a 58 percent increase. In 2000, the dealership’s total service gross was $2.3 million; in 2016, that number reached $3.75 million.
Olathe Ford Lincoln’s total revenue in 2000 was $5.8 million, parts and labor, and in 2016, parts and labor reached $12.2 million.
Today, Romstedt—who estimates that fleets make up roughly one-third of total business—still makes it a point to have his staff take advantage of every opportunity that fleet accounts present.
“Our manufacturer happens to provide incentives to sell parts to some of those [fleet] vehicles, and it doesn’t have to be just a parts sale―they can collect that when we do a repair order sale, as well,” he explains. “So we diligently work to code all those repair orders properly, to make sure that we get the benefit of any factory money that comes back to us for taking care of those vehicles.”
Olathe Ford Lincoln also has plans to soon expand pickup and delivery of its work to fleet customers, Romstedt says.
The key to making fleet accounts fruitful is being mindful of the future business they can inspire, Romstedt says.
The fleet customer “is in a position to be very beneficial to the company—not just from a parts and service standpoint, but from a purchase standpoint,” Romstedt notes. “You always have to be cognizant of that—that, right now I’m the guy that carries the banner for the whole dealership, not just this one repair. … When you’re dealing with fleets, on any given day, what you do might impact the wellbeing of the entire store.”
Romstedt says it’s key to have your staff truly listen to fleet customers and meet their biggest demands.
“It’s not about facility, it’s not about size,” Romstedt says. “It’s really about caring about what’s important to the people that you’re dealing with. … You just need everybody rowing in the same direction.”