Yoswick--Take Another Look at Fleet Work

Jim Salazar said fleet work may account for only 10 percent of his business—but it’s an important 10 percent.

“There are times when the industry as a whole gets slow, so you really shouldn’t overlook the added revenue that fleet work offers,” said Salazar, who with his brother are the second-generation owners of Royal Coaches Autobody & Towing, a 23-employee company in Baldwin Park, California. “It’s a dependable source of work.”

Many shops have shied away from fleet work in the past, viewing it—rightly or wrongly—as low-profit work for fleet managers that tend to be focused far more on price than quality. But as insurance-paid consumer work becomes increasingly controlled, more shops are giving fleet work another look—and some are liking what they see.

The pros and cons

Salazar is the first to admit that a lot of fleet work is not paid at full retail rates.

“They’re simply looking for the best deal, and particularly if you participate in some of the national fleet networks, you have to pay them a percentage of each job,” he said. “But that’s not really any different than being a direct repairer for an insurance company because they ask for concessions, too.”

He also views fleet work as a good way to keep his business from becoming too dependent on any one or two sources of work. And some fleets understand that quick turn-around time can be worth paying a premium for.

“Time is money, and they want the vehicles up and running again as quickly as possible,” Salazar said. “Some fleets that are self-insured don’t require any inspection of the vehicle other than mine. The fleet manager brings it in and says, ‘Estimate it and fix it and get it on the road.’”

For other fleets, he said, the process is similar to non-direct repair insurance work, with required estimate approvals, required photos and, at times, on-site vehicle inspections. Some shops say that national fleet management companies don’t assign one person to a particular claim and so have found themselves on the phone with up to six different people over the course of a repair.

“Every fleet is different, but yes, in some cases, it can be a longer process than insurance-paid work,” he said.

But Bill McElroy of Bill McElroy Auto Body in Bensalem, Pennsylvania, likes fleet work because it generally involves smaller repairs that can flow through the shop quickly. While it often comes in unscheduled, it also offers potential fill-in work during slow times.

“They often have small cosmetic damage that doesn’t keep them from using the vehicle,” McElroy said of some of the fleets he works with. ”So if we run into a slow patch, we can call and tell them we can get a job in and out in a day or two. They’ll check their vehicles and often come up with a couple jobs.”

Salazar, McElroy and other shop owners who do fleet work also point to a number of other advantages it offers, including:

• It can keep your shop busy even at times when shops that focus primarily on insurance work are slower.
• It can help fill a shop that has a less-than-ideal location. If your industrial park shop doesn’t have a lot of drive-by traffic, fleet work referrals can be a good fit.
• It can act as a “loss leader.” Drivers who are satisfied with the service and the quality of the repair you did on the company car they drive (even if you had to do it at a discount) are likely to bring their personal vehicles (and refer others) to you.

Potential sources of fleet work

If fleet work seems to fit with your business plan, the next step is to track it down. Looking for potential fleet work can be as simple as keeping an eye out as you drive around town. Any vehicle on the road with signage indicating that it is a commercial vehicle may be one of a half dozen—or 150—that company operates.     Some of the common sources of fleet business for collision repair shops include:

Law enforcement agencies. One shop owner swears that for whatever reason having a police or sheriff’s department vehicle in his shop is a great confidence-builder for other potential customers.

• Utilities. The largest oil, natural gas, phone, cable and electric companies tend to have their own repair shops, but plenty of others need work on their cars, trucks and vans of all types.
• Delivery and courier services. You might not want to work on larger UPS or FedEx trucks, but a quick check of your local phone book will help you find plenty of other companies with fleets of cars and small trucks making deliveries around town.
• Rental car companies. Many shops have found this to be some of the least profitable work available; others says it’s a reliable source of fill-in work that helps keep their shop humming.
• Corporate fleet management companies (which oversee fleet repairs for Fortune 500 and other large companies), such as the CEI Group (www.ceinetwork.com), Drivers Shield (www.driversshieldautoclub.com), PHH Corporation (www.phharval.com), Wheels, Inc. (www.wheels.com) and GE Fleet Service (www.GEfleet.com).
• Contractors. Plumbing, electrical and remodeling contractors tend to rack up a fair amount of on-the-road and job-site damage needed repairs. Shops say these fleets often look to save money by asking for partial repairs that will get the vehicle back into service even if not always looking first-class.
• Taxi and limousine companies. As with rental car firms, taxi companies are generally experienced at negotiating the best deal they can on vehicle repairs. But if that’s not the type of work you’re looking for, don’t rule out the towncar and higher-end market that invest in nicer vehicles and have customers who expect more than a patched-up checker paint job.
• Any organization with a mobile sales force. If a company puts employees out on the road conducting sales calls, the odds are good they’re doing so in company-owned cars. Pharmaceutical companies, for example, have fleets of cars for employees calling on doctors and pharmacies. Ask other business owners you know what kind of companies call on them—and what kind of vehicles those sales agents are driving.
• Municipalities. Some cities, counties and states often have their own repair shops, but if not, it can be attractive work. You may enjoy preferred status for getting the work if your business is woman- or minority-owned.

Attracting the work

Once you’ve identified potential fleets, it’s time to start thinking like a fleet manager: What will compel them to choose you to do their collision repair work?

• Competitive pricing. Discounts are often expected, particularly when working with large national fleet management companies. Some expect a set percentage discount on the entire job—and then may or may not also pick apart each estimate.  But smaller fleets—especially those that need vehicles fixed quickly—may be willing to pay closer to full retail pricing.
• Faster repairs. Every day that a vehicle is in a shop is another day it’s not making any money for the company that owns it. So turn-around time is critical. Having even a partial evening or weekend crew that helps improve your cycle time can be an especially good selling point for fleets.
• Transportation services. Salazar said his company offers towing services as well, which makes it easier to offer pick-up and delivery of fleet vehicles. Fleet managers may be willing to pay for such convenience, but having the tow trucks also gives Salazar the option of transporting the vehicles for free or at a discount.
• Additional vehicle services. Being able to provide paintless dent repair or mechanical services for vehicles can also help you compete for fleet business.
•  Business exchange. Companies like to do business with those who buy from them. Right after the contractor you hire to do some work at your shop finishes the project may be a good time to ask who repairs their vehicles.

Persistence pays off

Salazar said landing fleet work is much like any other shop marketing: It requires patience and persistence. You may hear “no” today, he said, but if you regularly keep your name in front of fleet managers in a positive way, you’ll be in the running when something changes.

“I think shops are missing out if they dismiss fleet work entirely,” Salazar said. “I think if you could tap into every fleet market out there, you may not even need insurance work. We’re not taking it to that extent, but given how many fleet vehicles there are out there, it doesn’t make sense to not capture part of that market to help your business."