Flip This Fleet
Originally published: 10.01.07 by Traci Purdum
Keeping your vehicles in tip-top shape sends the right message and saves money.
Image is everything.
Indeed, it’s the reason branding is a philosophy pondered by companies large and small. It’s also the reason we know when someone asks, “Are you in Good Hands?” they are talking about Allstate Insurance and if we are driving a Dodge, we can “Grab life by the horns.”
The same theory holds true for fleets in the hvacr industry.
Never mind the fact that you offer the best quality service in town, what do people think when they see your trucks and vans driving through the neighborhood?
Consider this — the vehicles you send out to clients are moving billboards capable of spreading your message far and wide.
According to a recent study in Chicago by the Traffic Audit Bureau, an independent non-profit organization, one truck reached an estimated 40,585 people a day.
In one week’s worth of service calls with just one truck your message will be seen 284,095 times. Parlay the simple act of driving to clients into a positive marketing experience, and that’s a pretty good return on investment.
“I look at our vans as a part of the total entity of our company,” says Carmine Galletta, owner
GallettAir, which won the HVACR Business fleet-design contest earlier this year, not only understands the need to keep vehicles maintained and clean, it has witnessed firsthand the power of on-the-road advertising.
According to Galletta, when he first started the company he only had one truck. He was doing a job in East Hampton, N.Y., in the morning and then drove to Manhattan later in the day for another job. The following week a customer told him the reason he called GallettAir was he saw their “trucks” everywhere.
With the power of branding comes responsibility.
GallettAir’s fleet consists of 25 vehicles and the company renews its fleet on a rotating basis about every five years.
“We put a substantial amount of miles on the trucks because we run 24/7,” says Galletta. “We have a very stringent maintenance schedule, but even still, after five years that’s when maintenance costs start to rise above acceptable levels.”
For Shumate Mechanical, Duluth, Ga., fleet turnover happens every four years.
“We don’t want to get into repairs and we know that at 175,000 miles we will still get a good price for our vans (about $2,500),” says Mikhail Britt, chief financial officer of Shumate.
“Even if you keep the vehicles clean there will be scratches. We don’t want a vehicle that looks like it’s been through the war — that doesn’t represent us well and does not communicate professionalism.”
Shumate has over 200 leased vehicles in its fleet, which are mostly Fords. According to Britt, by not mixing up the fleet with other models it makes it easier to keep replacement parts on hand. Its business consists of mostly commercial contracts, but does about 40% of its business in residential as well.
In terms of maintenance, Britt says the company schedules 30 vehicles at a time to undergo routine inspections, oil changes and any other areas of concern the drivers report. The maintenance is set up while the drivers are in company meetings.
“If a driver alerts us there is something wrong, we act on it,” says Britt. “We don’t want an unsafe vehicle on the road. We spend about $400,000 a year in maintenance, and we aren’t shy about doing that in order to keep them in good condition. It’s a cost of business and an important asset that helps employees get their work done.”
While $400,000 per year in maintenance costs seems like a large investment, think about it in terms of a marketing investment as well.
According to the Traffic Audit Bureau’s study, if one truck reaches 284,095 people per week and Shumate has 200 vehicles, the total number of advertising impressions per week is an astronomical 56,819,000. Imagine how many people will see Shumate’s vehicles and contact information in a year’s time all for an investment of $400,000 in maintenance costs plus the cost of vehicles.
In addition to maintenance, Britt says another way to get the most out of your investment is to avoid getting every possible option.
“People won’t pay you for the luxury of 4-wheel drive. However, don’t deprive your employees of airconditioning,” says Britt, whose Atlanta-based service area certainly wouldn’t need 4-wheel drive.
However, an hvacr company based in Minnesota would. The key is to think about what’s important and what can you live without in your market. Ask yourself, “Is it necessary to have power locks and windows? Do company vehicles need state-of-the-art stereos?”
For GallettAir, many of the vehicles are leased. Depending on the interest rates, Galletta will go to a dealership. He also notes that his credit union has helped his company grow.
“It all depends on the climate,” explains Galletta. “If times are good, I’ll buy them outright. Another thing we do is buy vehicles at end-of-year close-out sales.”
What benefits do Shumate and GallettAir see from investing so much in maintenance costs?
One is always putting the right image out on the road. The other: resale value.
“Maintenance is key,” says Galletta. “If they run good and they are maintained, they will hold their value.”
He has seen service vehicles that have been abused. “If they get hit, they don’t fix them. I equate it to maintaining your own health. If you don’t do that, things will just get worse.
“If you keep your fleet young, the resale value will always be up. Vans will hold their value if they are maintained and kept clean.”
Indeed, GallettAir’s reputation for keeping clean vehicles has plumbers and electricians stopping by the shop to see if any of the vans are for sale.
For Shumate, the company sells six or seven vehicles at a time. Often, they go to the dealership where they buy new vans and trucks. They also give employees the option to purchase, and also entertain walk-up business as well.
Shumate and GallettAir always remove all logos before they sell any vehicle, and for good reason. There is no telling what will happen to the van or truck once it leaves your parking lot.
“Before it leaves our hands, all markings are gone. We don’t want to be in the news,” says Britt.
Indeed, one of GallettAir’s vehicles was involved in an accident and the insurance company totaled-out the truck. Assuming that the truck would be destroyed, Galletta didn’t think twice about company logos.
“We got a phone call from upstate New York regarding the truck I thought was long gone. Turns out the insurance company sold it at auction and never took off the logos. Now we make certain that anytime a vehicle leaves the company, for whatever reason, all logos are removed.”
In terms of insurance, expect that costs will increase with having young vehicles in the fleet. It’s just another cost of doing business.
However, newer vehicles will require less maintenance dollars.
To help mitigate insurance increases, both Shumate and GallettAir require driver training and safety courses. And Shumate makes drivers responsible for the first $500 worth of damage to the van or truck if the driver was found to be at fault.
“They are in charge. If they cause an accident, they must pay. We want to make sure they don’t treat accidents like they are no big deal,” explains Britt.
GallettAir does a background check on every employee’s driver’s license. “If they have a bad driving record, insurance costs increase.”
Additionally, Galletta stresses the importance of proper scheduling.
“I don’t ride my guys. We schedule them so they aren’t in a hurry to get to a call. My theory: Give them enough time to get to a call so they don’t have to speed. We want them to drive respectfully because they are representing our company.”
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