Jun 30 2012

More expensive GPS System beats that of a low cost one by $70/month

Category: Extreme Return on Investment,Fleet Tracking,GPS Fleet Tracking,GPS Tracking — rdonat @ 10:10 am

There is a fantastic article written by Chris Wolski which was just published in Automotive Fleet which talks about Telematics adoption and ROI rates over the past several years (2008-2011). [based on a survey taken by ARI, Donlen, and PHH]

The article is here.

It states that the range of MONTHLY ROI for a telematics initiative in 2011 was $185 – $225 (up significantly from $80-150 in 2008):

GPS Initiative ROI 2008-2011

GPS Initiative ROI 2008-2011

What the article does NOT mention is service prices, and the fact that the range in monthly ROI is very likely attributable to the overall capabilities of the GPS tracking solution chosen (e.g. bare-bones vs. high-end).

Amortizing the survey’s stated cost of the hardware over 4 years makes a $3.13 monthly difference between low and high-end.

Today’s service prices tend to range between $25 and $33 per month per vehicle and correlate to hardware costs (e.g. higher priced hardware tends to have higher priced service and ultimately higher ABSOLUTE ROI).

I did some basic math in Excel and calculated the PERCENTAGE ROI (vs. the ABSOLUTE ROI of $185-$225 provided in Chris’s article).

I found the percentage ROI was 734% for the low end solution, and 733% for the high end solution.  The percentage ROI is the SAME between low and high end solutions!

ROI % for high end and low-end GPS are both ~733%!

ROI % for high end and low-end GPS are both ~733%!

Therefore, companies are going to save an EXTRA $70 per month, per vehicle, according to the survey (taken by ARI/Donlen/PHH), by purchasing a higher end gps fleet tracking solution.

Within 2 1/2 months, the extra cost of the better solution has paid off for the incremental $150 in hardware and $3.13 per month.

And over the next 45 1/2 months (assuming a 4 year life on the hardware), an extra $3,185 flows to the bottom line PER VEHICLE.

For 100 vehicles, that’s $318,500.  And that’s ON TOP OF THE LOW END ROI — a total ROI of $1,224,000!

Obviously your exact savings will differ, but if you trust ARI, Donlen, and PHH, 3 of the biggest fleet leasing companies in the space, the message is clear:

Buy a higher end GPS Tracking solution and SAVE MORE!

I always use the following analogy when talking about ROI between a low end and high end GPS tracking solution (e.g. one which has more reports, more adaptability, better alerts and maps, and more API’s, etc.):

If you can buy a bar of SILVER for $25, that’s a great deal, and will give you fantastic ROI.

If you can alternately buy a MORE EXPENSIVE bar of GOLD for $40, your ROI is VASTLY more than if you purchased the bar of silver.

Better ROI for paying extra for a bar of gold vs. silver

Better ROI for paying extra for a bar of gold vs. silver

The bar of gold costs more, but will yield significantly more ROI if you pay the small premium.

We hear this ALL THE TIME — “we went with the lower cost solution.”

Unfortunately it’s not about absolute cost — it’s about the OPPORTUNITY COST of not going with a solution that will really fit your costly business challenges in a way that a higher end (and slightly more costly) solution does.  And by the way, those customers usually cancel and go with higher end solutions later on once they determine this for themselves.  I hope this article helps companies from making the wrong “penny-wise, pound-foolish” decision.

Thanks again for the great article Chris.

Here is a link to the charts in that article.

Thanks,

Rob.

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Jun 16 2012

Choose your GPS diet wisely

Category: Ease of use,Extreme Return on Investment,Fleet Tracking,GPS Fleet Tracking,GPS Tracking — rdonat @ 3:48 pm

I see many fleet organizations make highly cost-driven decisions with respect to their choice of GPS tracking solutions.

I have been searching for a good analogy to help companies understand that GPS tracking is more than just about the cost (if you know me, you know I like analogies…).

Typically, I tell people that it’s not the cost — it’s the OPPORTUNITY COST — which fleets should worry about.

If by purchasing a cheap (not inexpensive, I do mean cheap) solution, the customer gives up the POSSIBILITY for significant additional ROI (return on investment) then they have made a terrible and all-too-typical decision.  Saving $10 per month per vehicle may cost them $100 since the low cost products typically can’t be easily adapted to exact, costly business challenges which is where GPS Tracking should be directed.  They may not have all the necessary reports, alerts, API’s, maps, and features which add up quickly to provide exceptional ROI.

At the same time, choosing a too-fully-functioned solution which costs more and goes under-utilized also is a bad decision.  A fleet with few vehicles and a simple set of requirements doesn’t need every bell and whistle, and should choose accordingly.

So here’s my analogy:

Think of GPS Tracking as your permanent restaurant of choice.  Not just for you, but all your company’s employees as well.  And for every meal moving forward.  You get one chance to get it right, and if you don’t, you and your colleagues will be ill-fed for years to come.

You don’t want your whole company to eat somewhere cheap — call it at the “burger shack” — every day in the future (and given some providers’ contracts, this is realistically 2-5 years).

Don't buy the cheap burger equivalent of a GPS Tracking System

Don't buy the cheap burger equivalent of a GPS Tracking System

They will not give everyone the nutrition they require to stay healthy.  Plus the menu is very limited and won’t allow different meals for different employees who have different dietary requirements.  It’s cheap, undeniably, but you get what you pay for, and you probably shouldn’t expect for many new dishes to be added to the menu in the future.

Likewise, you don’t need to eat at the high-end Steakhouse where everything is overpriced, over-sized, and generally too much for your appetite.

And don't go overboard for the Steakhouse either

And don't go overboard for the Steakhouse either

Instead, find a medium-priced buffet or sit-down restaurant where there are plenty of options — healthy options — and significant value for all the employees who will dine there with you.

Choose a GPS Solution with something good for everyone

Choose a GPS Solution with something good for everyone

You want plenty of diversity in the product you choose as a GPS Tracking system.  Additionally, you want value and maybe most importantly, you want them to have an “A” rating — not the cheapest restaurant you can find.  Do you ever eat at restaurants with “C” inspection results in their window?  They’re cheap, yes.  But also likely to make you sick and get shut down eventually.  Splurge and choose a good one which will provide you the best return on your investment and time.  GPS is one of the most important systems your company will ever implement, and choosing the cheapest one will give you indigestion at best.  The benefits from choosing a good one far exceed the costs savings from choosing a cheap one.

Rob

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Dec 18 2010

Use it or lose it! (ROI that is…)

Category: Alerts,Driver Accountability,Extreme Return on Investment,Identifying and eliminating speeding,reduced idling,Scheduled Reports — rdonat @ 2:38 pm

I was looking at one of our customers’ accounts the other day.  They have 23 vehicles.  Many people with that many vehicles think they “have a handle” on what’s going on.

I was thrilled to see that this company was using GPS Insight to see what was going on with their fleet.

Specifically, they were using our:

  • Alerts
  • Scheduled Reports

I call these 2 features “Unattended ROI” since you don’t have to do anything except let US monitor your fleet for exceptional situations and alert you to them, as well as run a summary report automatically and look at it in your inbox in the morning.

Scheduling Reports to alert to exceptions

Scheduling Reports to alert to exceptions

You can see there are landmark, idling, speeding, and “long stop” alerts set up here.  This customer wants to know every time a vehicle gets to the office “late” which is between 6 PM and 5 AM.  That can be used to identify people working late as well as people sneaking into the office when it is not manned in order to load up on parts for side jobs.

We have checked this for them 728,641 times since they set up that alert.  We’ve alerted them only 820 times (which is typical — usually 1 in 1000 alert checks results in an alert).

They have also set up a number of scheduled reports:

Scheduling fleet tracking reports to automate your job

Scheduling fleet tracking reports to automate your job

Just by setting up these 8, we have sent them 1300 reports and all they have to do is read them in their email every day.  They come as .html, Excel/CSV, and associated maps (for speeding, idling, and odd-hours violations).

I wish all our customers (and users of GPS Tracking in general) were this diligent about setting up MEANINGFUL alerts and reports.  It drives significant ROI knowing in real time what is going on with your fleet.  If you don’t use them, you are throwing away this return on your investment.

Use it or Lose it!

Rob.

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Aug 14 2010

GPS Insight has sent out over two million alerts based on driver behavior!

Category: Alerts,detecting unauthorized vehicle usage,Extreme Return on Investment,Identifying and eliminating speeding,reduced idling — rdonat @ 5:06 pm

We recently (sometime Friday) sent our 2,000,000th alert.

This is after checking 1.742 BILLION times for our customers over the years.

Email I receive nightly which shows how many alerts have been processed

Email I receive nightly which shows how many alerts have been processed

Really, the majority of those checks have taken place over the past year or so, since we started making the power of our alerts more known to customers.

Since you can create an alert and let us do the heavy lifting, every minute of every day, this provides what I call “Unattended ROI.”

Remember that with GPS Insight, you can send alerts straight to the drivers themselves, as well as to supervisors.

So if a driver speeds, idles too long, stops too long somewhere he/she shouldn’t be, is using the vehicle off-hours, or out of where they should be (or doing several other things we can monitor with alerts), THAT DRIVER WILL RECEIVE AN INSTANT ALERT PROMPTING THEM TO CORRECT THEIR BEHAVIOR!

This is useful since GPS Insight becomes “the bad guy.”  You don’t necessarily need to talk to your drivers yourself — we are the “anonymous” reminder which helps them to know they need to correct their behavior, whether it’s speeding, idling, or not being where they’re supposed to be.

We have sent out Two Million Alerts so far — if you haven’t already set yours up, do so!  They’re part of the basic GPS Insight package & unlimited, unlike many competitors’ alerts.

Plus, you can “combine” our alerts to ensure you don’t get false alerts.

Good examples include:

  • Sending idling alerts only during business hours and only when the vehicle is outside the maintenance yards, to avoid pestering the driver if work is being performed on the vehicle
  • Sending a driver a “what is the holdup?” email/SMS text message whenever they stop for more than 30 minutes at a supplier
  • Sending a driver a “is your vehicle being stolen?” alert if it moves late at night and leaves the driver’s home, to avoid waking him up if the spouse needed to move it in from the street or out of the way
  • Sending Speeding alerts based on lower thresholds only during night time hours

Alerts are one of the best tools for saving money using GPS Insight.  We’re glad we’ve processed almost two billion of them, and have sent over two million out so far!

Thanks,

Rob.

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Aug 10 2008

Instant Idle Time Reduction — saves $100,000 in a MONTH

Category: Company Efficiency,Ease of use,Extreme Return on Investment,Fuel Savings,GPS INSIGHT ADVANTAGES — rdonat @ 2:58 pm

A large customer recently shared some statistics with me the other day. They estimate that in July, they consumed roughly 20,000 fewer gallons of fuel than they did 2 months prior.

What changed? In mid-June, they asked us to start notifying them (programmatically) whenever a vehicle idled for longer than 7 minutes.

Once they got that notice, they would turn it into an email to the driver and the driver’s supervisor, and have it sent to them via blackberry.

INSTANTLY, the unnecessary idling stopped.

Here is a graph of the dramatic reduction. Bear in mind that in this industry and market, 25% idling is considered normal (stop lights, traffic, powering the lift gate, etc.) — that equates to roughly a 90% decrease in UNNECESSARY idling:

Instant reduction in idle time

In June, this translated to roughly 10,000 fewer gallons of fuel (mostly diesel). In July, the first “full month” it was more like 20,000 when the final fuel bills were in. We helped this customer ensure their numbers were correct this using our fuel consumption report as well. Believe it or not, this is less than a gallon of fuel savings per day on average, per vehicle, but it has a massive effect on bottom line.

The rough cost savings for this fleet is over 3 times the cost of GPS Insight’s monthly service fee.

Bear in mind that this is still unfortunately a small decrease relative to the total fuel bill, but an interesting thing became clear after the drivers started shutting their vehicle down rather than leave them run, especially in the hotter markets:

The drivers got faster doing their deliveries, which meant the company got more efficient.

Without a nice cool cab to get back into, they took less time doing deliveries, since every minute they took to get the truck back up and rolling, the cab got hotter in the sun, especially on hot days. Our customer’s management commented to GPS Insight that they got more deliveries done on account of this change, as well as saving a considerable amount of money on fuel.We will introduce this capability for all of our customers in August, since the improvement was so significant, and we want everyone to be able to send both their driver and their supervisors proactive alerts/messages when excessive idling, speeding, off-hours usage, and out-of-geofence activity is detected.

Look for news about this new feature in our upcoming newsletter.

Thanks,
Rob.

The drivers got faster doing their deliveries, which meant the company got more efficient.

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