A Guide to Pricing Out Fleet Management Solutions
You have a lot of responsibility as an owner/manager of a small business. As if this responsibility wasn’t enough, you also have a fleet of vehicles that you are responsible for. Your fleet is an asset that you must maintain for it to be profitable to your business. Managing a fleet costs money, and getting endless quotes for your fleet is probably the last thing you want to do. What if there was a way to go into your research knowing exactly what you wanted?
Many fleet owners and managers don’t know what to look for when trying to find the right fleet management solution. Even though these types of solutions have been around since the 1980s, there hasn’t been too high of a demand for them until now. Our goal is to make sure that our potential customers are educated when they decide to choose Fleetr. Transparency is our goal, and it allows us to show fleet owners and managers exactly what we have to offer.
The time has come for us to create a guide that can help you price out fleet management solutions for your small business. By the end of this guide, we hope that you can:
- Identify what you are looking for in a fleet management solution
- Understand what fleet management software is
- Know the benefits of using fleet management software
- Understand pricing expectations and what you may be obligated to pay
- Know the different parts of your fleet management solution
Our focus is to ensure that small business fleets receive the same benefits that large fleets get when using fleet tracking software. Not all software was created the same. What works for the large fleets is likely not made for a small fleet (and vice versa). Our goal is to eliminate the confusion between the two and educate about the use of GPS fleet tracking software as a way to make a fleet run more efficiently.
What is Fleet Management Software?
Fleet management software is telematics programming making your job running a fleet a lot easier. The software is designed to help keep track of a fleet’s inner workings. With this software, you can keep track of mileage, driving habits, where the vehicle goes, and so much more. As a fleet owner/manager, you want to be able to see that your asset is being taken care of and know where it is at all times. Using fleet management software can be the answer to this. How does this software gather all this information and benefit you? Read on to learn more.
How the Software Works
Fleet management software works in tandem with fleet tracking hardware. The hardware helps to gather the information and transmits it to a localized dashboard that relays the information to you. In most circumstances, the hardware works off of a wireless network – think of the way your smartphone works. The wireless network provides the signal needed to transmit the required data. Other types of hardware may work off WiFi only, meaning that the information is gathered and uploaded when a WiFi network is available.
The software works by receiving the information compiled by the hardware that is inserted into the OBD II port in your fleet vehicle. Besides reading the information on your vehicle’s internal computer module, the hardware also communicates with GPS satellites that orbit the Earth. These satellites are constantly sending out signals. When a specific receiver is sought out, the signals will lock on that receiver and relay with almost perfect precision where that receiver is (in this case, your fleet vehicle).
If you want to see where a fleet vehicle is at any given time, you can go to your software dashboard and look at that particular vehicle on the map. Depending on the software you are using, you may see the vehicle’s current speed and what direction it is going. Owners see this as a bonus should the vehicle end up stolen.
Benefits of the Software
Using fleet management software takes away much of the mundane paperwork you might be left with at the end of the day (or carried into the next day). Since you have a small business, most times, you want to be out there with customers or handling other aspects of the business, not chained to your desk. Using a software solution to take care of some of your tasks helps free up some of your time, getting you back where you want to be within the business.
Do you know what it takes to make your fleet more efficient? Can you rattle off the changes that need to be made to save money on your fuel consumption?
It’s okay. Not many can. The point is that with a software solution, you are able to gather and analyze information that you may not be able to on your own. Sure, you could do the math if your fleet vehicles don’t tell you how many miles to the gallon (mpg) you are currently getting.
Ye olde manual method:
- Take the number of miles you have traveled from the trip counter on the odometer, or calculate from the total mileage from the last time you filled up your tank.
- Divide the miles you traveled by the number of gallons it took to refill your gas tank.
For example, you drove a total of 450 miles, and it took 13 gallons to fill the tank. Your fuel economy would be 34.6 mpg. Unless you have invested in extremely fuel-efficient fleet vehicles for your business, you will likely see totals more along the line of the United States’ vehicle fleet average of 24.9 mpg.
Either way, you will find that investing in fleet management software will arm you with more tools and be beneficial, not detrimental.
Why Small Business Fleets Need This Software
Most larger businesses are likely to use fleet tracking software as a means to “keep tabs” on every one of the vehicles in their fleet. They may do this because it is too much of a task for one or two people to account for that many vehicles. When we say large fleets, we mean over 100 fleet vehicles. Could you imagine trying to take care of that many vehicles on your own without some type of software to help?
Small fleets need fleet management software too. It isn’t reserved for large industries. Even if you aren’t using it for the same reasons as other businesses, there is still a place for it within your business. Small business fleets are defined as any fleet with less than 100 vehicles. Finding a company specializing in the small fleet (like Fleetr) offers more than the ones that scout the larger fleets.
The information you gain from a software program like this can be priceless when it comes to your business. Understanding the habits of your drivers, knowing where your assets are, and finding out how you can be more efficient makes your business thrive. You can also receive notifications when something isn’t right – hazardous driving, check engine light, and more.
Anatomy of a Fleet Management Software Solution
Different factors go into your fleet and the use of fleet management software solutions. There has to be cooperation between all of these factors in order for the software to be successful. We touched a little on how it can be beneficial and how it works (we will go more in-depth later). Without cooperation, none of this will matter. Your investment will not benefit you or your fleet if there isn’t an agreement among the factors.
The Fleet Vehicle
Your fleet vehicle holds a very important part in this equation. Without the fleet vehicle – you would not have a fleet. You can see the importance of having at least one. For small fleets, you don’t have to track hundreds of vehicles for the software to be beneficial. Maybe your overall goal is to expand your fleet. In that case, you could be looking to become more efficient to save money and purchase other vehicles. Your software investment can help you find hidden money by making your current vehicles more efficient.
The Fleet Driver
The fleet driver plays a larger role in the success of your fleet management software than you realize. You already know that without the vehicle, you don’t have a fleet. Without a driver, the vehicle is useless. They depend on each other to be relevant. The habits of your driver behind the wheel of the vehicle impact the efficiency of the vehicle. Your driver may not even realize that they have the habit. They may be driving this vehicle like they would any other. Your fleet management software will identify these habits and traits and provide the tools needed to correct them.
The Hardware and The Software
Just like your vehicle and your driver are dependant upon one another, your hardware and software are equally dependant upon one another. Having one without the other is redundant. The hardware is what gathers the data from your fleet vehicle, and the software analyzes it and relays it back to you. The heart of your fleet management software is the hardware and the software. Without these two items, you can’t shape your fleet into an efficient asset.
Is Fleet Tracking Hardware Free?
This question can be a tricky one to answer. We can’t answer for other fleet management software companies, but we can tell you what Fleetr offers. Fleetr doesn’t charge for the fleet tracking hardware that accompanies our software. You pay one price each month for each vehicle – no hidden fees. If you decide to end your subscription, just send back the hardware.
Other companies are not quite as accommodating. Some require you to lease the hardware by paying a little fee each month for using it. Others may require that you pay for the hardware outright. Ensure you understand what you need to do with the software should you terminate your subscription or contract.
The Network, The Cloud, and The App
Now that you have the vehicle, the driver, the hardware, and the software, you need a place to run, capture, and analyze the information gathered. Enter the network, the cloud, and the app for your hardware and software computation needs.
The network used to transmit data to the cloud can vary based on the company you are purchasing your fleet management software from. The most popular method is by using wireless means to transmit data – such as cell towers. Some of the lower-end or older models may use WiFi to transmit the data it collects, but for the most part, you will see many of these companies making use of the cell towers for computing purposes.
The cloud is not referring to the fluffy white cotton candy-looking masses in the sky, but the massive network of data centers that store information for on-demand recall. Instead of using internal memory or requiring dedicated space for the information gathered from the hardware, it is stored on the cloud until it is ready to be recalled in the software application for review or reporting purposes. Most of our information saved online and through web-based software is done through the cloud.
The application or the “app” is the dashboard in which all of your data can be accessed. From your dashboard, you can see your fleet vehicles (wherever they are) and even see the current speed and direction they are traveling. You can access any reporting features that the software company compiles for you and even your maintenance schedule if the application supports it. Everything you need to take care of your fleet is here.
Most of these applications are available at any time from any smart device capable of downloading the app. The software is often available through desktop configuration as well, if required. Your application is what will help alert you of any notifications that are pressing and urgent – such as unsafe driving behavior.
The Fleet Owner/Manager
You have an integral part in this process. Without you, there is no business, fleet, or guidance. You have to be willing to take on the task of interpreting the data you are presented with. If you aren’t willing to make the most of the information you are provided with, there is no point for you to invest in the software to manage your fleet.
You are the glue that holds together all of the above fleet management software components. When you invest in the fleet management software, you invest in your fleet and everyone who is a part of the intricate process.
Pricing Expectations for Fleet Management Software
If you have never looked into fleet management software, you likely have no idea how it works. It’s not every day that you wake up and say, “I think I’ll research fleet management software today.” You may not know what you need to look for, what to avoid, and when you have found the perfect fit.
The biggest part of getting pricing and knowing what to expect is knowing what you want. To gain a better understanding of what you are looking for, ask yourself these questions:
- What do you want to achieve with your GPS fleet management software?
- How many vehicles are you going to implement the hardware and software in?
- What kind of budget are you working with for this?
- What information are you looking to gain from using this software? Do you have a specific goal?
- How will you use the information that you gain?
- Are you willing to put in the time and effort that it will take to implement such a system?
Shopping around for fleet management software isn’t like car insurance. You can’t just name your price like some companies. However, you may be entitled to a discount on your insurance if you implement GPS fleet tracking and management software.
What Are Pricing Structures?
Pricing structures are how fleet tracking companies charge you for the use of their services. There are various types available, making it possible to find one that fits your business and fleet operation. Understanding the different types and what each means can save you from making the wrong decision, especially if you aren’t looking for a long-term solution.
Something that many people don’t seem to understand about contract pricing is that it is a legally binding agreement. Anytime there is a contract involved where both parties agree to the terms, and something of value is exchanged, it is considered a valid and legally binding contract. If you break a contract with someone, it is enforceable to the fullest extent of the law – meaning you may end up in court over it. The same applies to contracts for technology, like cell phones or fleet management hardware and software.
Contract pricing occurs when you agree to pay a specified amount of money (listed in the contract) for a specified amount of time (also listed in the contract), with the understanding that you are obligated regardless of circumstances. You should also expect that there will be an early termination fee if there is a contract for your subscription.
The appealing thing about contract pricing is that you often get a lower rate because you commit yourself to a specific amount of time with that company. A lot of the contract plans are designed to benefit larger fleets, not the smaller fleets. The reason is that most of these companies that deal with contracts will have a minimum number of vehicles required to sign up for the discounted rate. You could think of it as “buying in bulk.” You always get a better deal per capita when you purchase more at one time.
Before entering into any type of contractual agreement, make sure you read the fine print on the contract. If you have a legal representative that you use in business matters, have them review the contract as well. This gesture may seem extreme, but remember that you are considering a legally binding contract, so talking to a legal expert can only benefit you.
Subscription pricing can also be referred to as month-to-month pricing by some fleet management software companies. With this pricing type, you aren’t required to commit to any legally binding terms and conditions. Your payment each month is what renews your service.
Think of the pay-as-you-go cell phone subscriptions. As long as you pay for that month, you have service. A fleet management software subscription-only account works the same way. These won’t have hidden fees or early termination fees. The monthly payment is an all-inclusive amount, often with fees already included.
Why Fleet Management Solution Pricing Matters
You might be thinking that there is no logical reason for you to think out the pricing options for your fleet management software. This could not be further from the truth. The reason for this is that fleet management software has the potential to save you money – you don’t want to spend more than you have the means for.
When you have found the right type of fleet management solution for your small business, you are going to end up making money in the end, not losing it. The solution you choose matters, and when you have found the right one, your profit will show.