Selling Power

Driving Down the Cost of Driving

How to track and control hidden sales fleet costs

        Forget spiraling gas prices. When you put your salespeople on the road, you're not just paying for cars and gas. There's a whole set of costs and responsibilities your company assumes. These hidden fleet costs can add up to major dollars for a sizable fleet. Smart companies try to minimize all these costs for their own good, as well as the welfare of their sales reps.

How to track and control hidden sales fleet costs

        Take first the costs of accidents. "Anytime a sales rep is involved in an accident, there are hidden costs," says Greg Downs, president of online training firm Safer Driver. There is the deductible amount of damage to the vehicle, even if no one is hurt. There is time away from work. There may be lawsuits filed by drivers of other vehicles. There may be worker's compensation or liability claims if the sales rep is injured. And insurance rates can increase due to accidents. Overall, Downs estimates that the hidden costs of a driving accident can be four to ten times the actual amount of dollar damages to the vehicle.

        Driving habits of sales reps are the critical controllable element. Sales driving is not like commuting or shopping on familiar streets. Sale reps put heavier mileage on their cars, drive in unfamiliar locations, and drive under the pressure of making appointments, staying in touch, and mentally preparing themselves for sales. Sales drivers need to be very good drivers, by habit and discipline.

        If they are not, managers suddenly discover the hidden costs of accidents. "Insurance rates go up and finance people get on managers and ask what they are doing about it," Downs notes. Managers could send drivers for classroom training, but this is expensive and takes up to a week away from sales time. It may also be expensive to bring a scattered field force into a central class location.

        Safer Driver offers online safety training that can be taken in the home or office, takes one hour per session, and costs $ro to $20 per driver. "If the course takes too long, people will not do it, so our approach is short and sweet," Downs explains.

        The course has six modules covering highway and off-highway basics. There are modules on passing large vehicles and on avoiding rear-end collisions, a major cause of sales-driving accidents. Other modules cover negotiating parking lots without scrapes and bumps and the necessity of avoiding driving distractions, such as cell phones, meals, and map-reading. "We tell drivers to pull over to use cell phones because even with a headset, they are engaged in a conversation," Downs says. Whatever the rules, every company should have a cell phone policy in place and communicate it to drivers.

        Safer Driver gives most clients a basic one-hour course annually, supplemented by I5- to 20-minute sessions each quarter or month. "We find it sinks in better if you send a consistent message in little bits, rather than a one-hour session at the annual sales conference," Downs says. After each session, the sales driver is questioned and scored. The client company sets the pass rate for the test score, usually from 70 to 80 percent.

        It is also critical that companies enforce safe-driving habits. "The most important policy to enforce is the use of seat belts," Downs argues. But robust fleet safety includes many other elements. Safer Driver provides a sample fleet-safety policy for downloading from its Website.

        It is difficult to rigorously prove the effects of short courses on accident rates, which depend on many factors, including enforcement of good-driving policies by fleet managers. But people with money at stake know the courses can make a difference. For larger fleets of a hundred vehicles or more, some insurance companies simply insist that some sort of safety training be implemented.

        National safety experts estimate that the typical accident for a company-owned vehicle causes almost $20,000 in just direct costs, according to Masa Patterson, fleet safety manager at His company also provides online safety training for sales reps. The Traffic School course may be required for all drivers, for newly hired sales reps, or for drivers whose records indicate they need safety training.

        Companies should be running motor vehicle record checks of sales drivers annually. These checks can raise red flags, even before an accident occurs. Frequent violations of ordinary driving rules are early warning signals that accidents are likely. For a large sales force, there can be lots of flag waving.

        New hires are also prime candidates for safety training. Even veteran reps, who are eager to succeed in new jobs, initially drive unfamiliar cars in unfamiliar territories and may be distracted by business pressures. And if the employee is new to sales, sales driving is entirely new.

        Many drivers receive their only training at the age of 16 or 18, when they first get their licenses. Now they may be driving 20,000 miles each year while thinking about their next appointment.

        The Traffic School course takes two to three hours to complete its seven sections. Like Safer Driver, Traffic School puts heavy emphasis on avoiding distractions. Drivers must score 80 percent or higher on each section before moving on to the next one.

        Patterson acknowledges that the best safety training is having a manager or safety expert ride along with a driver. But this is usually too expensive. Classroom training may be expensive and ineffective. "Employees tend to zone out and tune out of classroom instruction when they are just being lectured too," Patterson argues. Online training requires constant interaction with the material and repeated proof of learning through tests.

        Patterson recommends that the course be given once a year even to veteran sales drivers, because bad habits can develop among knowledgeable, experienced drivers. The course costs $35for a single student, but volume discounts are available for sales fleets.

        Apart from unsafe driving, other driving habits can impose hidden costs on sales fleets. Netistix Technologies can help reduce these other hidden costs, according to Marketing VP John Woronczuk.

        The Netistix device, installed in the diagnostics port under the dashboard, monitors bad habits that drive up fuel and maintenance costs and increase accident risks. The device downloads data over the wireless internet (WiFi)to alert fleet managers and correct drivers. The device monitors and reports mileage to schedule mileage-dependent maintenance accurately. The same odometer readings, by time of day, help drivers split business versus personal use for adjusting pay and taxes. "Knowing odometer readings for scheduling oil changes and maintenance is the low-hanging fruit in fleet management," Woronczuk says.

Too Hot To Handle

Top performers deserve fine sales cars. Here are some award-wining wheels to reward super performance.

Toyota's 4 Runner is a family-sized SUV that list for less than $35,000. The 4 Runner looks good and rugged. It handles off-road terrain with ease, while still yielding a smooth ride and tight handling on the highway. There is plenty of room inside for vacationing reps and lots of nice comfort features. The 4 Runner has a very attractive set of standard accessories. It is one of the best mid-sized SUVS on the market.

For single reps or as an extra car for a family, the Corvette still leads the pack of affordable sports coupes at a suggested retail price of less than $45,000. American drivers love this car, and it is not just nostalgia for Route 66 that makes the Corvette such a favorite. The Corvette is well endowed with power and performance that are comparable to the attractions of much more expensive imports.

The Ford Explorer and Mercury Mountaineer are two reasonably priced SUVs that have been redesigned to offer spacious cabins and very flexible layouts. Vacationing reps can seat seven people when they head for the beach or mountains, or store lots of sales materials when they are on duty. Best of all for heavy sales driving, the Explorer and Mountaineer have front-seat side airbags, plus roll and stability control as standard Equipment in all models. Power is ample, and both SUVs can also tow substantial weight for business or pleasure.

Mercedes-Benz's E-Class station wagons offer safety, luxury, and stylish design for the wholefamily.The E-Class can power reps up for the interstate with either a V6 or V8 engine and keep fuel use reasonable with a seven-speed transmission. All-wheel drive is optional. And, as with all Mercedes vehicles, you can always get some special touches, such as self-adjusting, actively ventilated seats and adaptive cruise control.

        The device also reports time spent idling engines. Unnecessary idling adds extra gasoline costs. Fleet managers can limit the time cars should idle and correct drivers who idle in parking lots or curbside. One Canadian express-delivery firm with 800 trucks saved $35,000 a year by reducing unnecessary idling.

        Netistix can also spot aggressive and abusive driving habits. It reports drivers going over local highway speed limits, or braking or accelerating too quickly. Speeding reduces safety and increases fuel consumption. Excessive braking increases maintenance, and fast acceleration increases fuel use.

        Netistix's GPS option allows managers to know where their vehicles are during sales hours. This helps prevent use of cars for non-business purposes. Netistix reports fuel consumption by each car by hour of the day, thus limiting misuse of cars for personal purposes.

        Netistix technology taps the same systems used by mechanics to do diagnostics. It flags potential repair problems early for efficient repairs. For example, changes in battery voltages warn that a new battery is necessary, long before the car refuses to start on a cold winter morning.

        Fleet managers can log on to Netistix's Website to get all the recent data. Or they can set rules, for example staying within 10 mph of highway speed limits, and alerts will be e-mailed when a driver violates these rules persistently.

        It costs $399 per car to install Netistix, then $5 to $9 per month for reports. Because Netistix uses WiFi, there are no cellphone charges. Woronczuk estimates the average fleet can reach payback in-six to nine months.

        Fleet management companies can also provide powerful tools for tracking your sales fleet's operation and reducing hidden costs. GE Commercial Finance Fleet Services recently enhanced its main tool, My.Dashboard, which reports on fleets over the Web.

        My.Dashboard reports to management on more than 80 fleet memcs and departures from company driving policies. These metrics cover the whole lifecycle of a fleet car, from initial Selling Power Ad 1 ordering through driving and eventual resale. The easy-to-use tool provides reports by individual car and driver. It shows trends in fuel consumption, maintenance costs, accident expenses, and many other items.

        Full-service fleet companies like GE not only report on costs to help companies control them, but can help reduce cost by taking over some management functions. GE is now offering a flexible set of customized programs for managing maintenance.

        GE's Maintenance Select program lets its clients select exactly how much control they want to have over vehicle maintenance. Having automobile experts review or make maintenance decisions is a powerful cost saver, because major maintenance is a big expense and choices can be tricky. But some firms already have in-house garages they trust, and others give highly paid salespeople wider latitude for authorizing repairs. Furthermore, downtime is a critical concern for some fleets, especially downtime for executive vehicles.

        Maintenance Select lets each fleet decide on how much decision making responsibility it wants to retain and how much to hand over to GE. The fleet firm, with 35years of experience in managing maintenance, can support all choices for safety, low costs, and preservation of resale value. It has a staff of technical advisors and tools to make sure the smartest maintenance decisions are made, taking into account both short- and long-term factors.

        With Maintenance Select, a firm can have its own mechanics make repairs and log the data into GE's systems. Fleet managers thus retain an integrated view of all their fleet operations, combining Selling Power Ad 2 in-house repair with expert reporting from GE. Another option, called Maintenance Blue, lets selected drivers authorize their own repairs without review to minimize downtime. But again, all the data are brought together so that fleet managers can ensure this discretion is used wisely.

        And all GE customers can choose to use GE's own network of quality repair vendors that work under pricing rules negotiated with GE and that reflect the firm's substantial buying power.

        Firms that do not use high technology or outsource fleet management can still save significant money simply by using fleet cards for all their fuel purchases. For example, a Shell Fleet Plus Card can reduce your gasoline costs by as much as 3 percent for monthly purchases of $10,000 or more. You can restrict the card to fuel only, or let drivers use it for oil and maintenance as well.

        Regardless of volume, the Fleet Plus Card offers reports that can help you control fuel expense by monitoring miles per gallon, the grades of gasoline purchased, prices paid for fuel, and any non-gasoline items purchased with the card. You can easily download reports by driver and vehicle, a report of any departures from your fleet policy, and reports on which stations your reps use to fill up. The Fleet Plus Card also saves drivers administrative hassle in filling out expense reports. HENRY CANADAY

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