Today’s national fleets are juggling a multitude of financial challenges. With average fleet operating margins of 2-4% in the United States, these financial variables ladder up to overwhelming business concerns for over-the-road trucking companies. A survey by the Kinetic Group of 300 fleets participating in aftermarket parts programs identifies the role billings and payments can play in managing these financial challenges for fleets.
Understanding the Value of a Payment Program to National Accounts
1. Understanding the Value of a Payment Program to National Accounts: Cost-Drivers within the Trucking Industry
2. Top-of-Mind Concerns for Over-the-Road Fleets. 1 Kuntz, Ray. Transportation’s Role in Climate Change and Reducing Greenhouse Gases. July 14, 2009. Today’s national fleets are juggling a multitude of financial challenges. With average fleet operating margins of 2-4% in the United States 1 , these financial variables ladder up to overwhelming business concerns for over-the-road trucking companies. A survey by the Kinetic Group of 300 fleets participating in aftermarket parts programs identifies the role billings and payments can play in managing these financial challenges for fleets.
3. Overall, 66% of respondents claimed that participation in a payments program provided their company with the opportunity to decrease operating costs, and nearly 71% are more likely to buy from suppliers that offer a payments program. Payment Cost-Drivers in the Trucking Industry. Most Important Decision-Making Factor For Program Participation Of Those Fleets Who Actively Participate In At Least One (1) Aftermarket Parts Payment Program
4. Fleets overwhelmingly identify parts pricing as one of the most important decision-making factors when evaluating suppliers. Implementation of standard pricing across aftermarket dealer networks, however, is tricky. The aftermarket sales model for truck parts and equipment is fairly consistent across the trucking industry. Original Equipment Manufacturers (OEMs) sell aftermarket parts to national accounts through a network with fleets, there is no model in place to consistently reinforce this pricing across the sales network. A payment program implemented across your sales network guarantees pricing to national accounts while maintaining a seamless purchase experience. Parts Pricing.
5. 78.5% of fleets agreed that purchasing controls offered within their billing and payment solutions were important to their businesses. Purchasing Controls. Procurement managers need to control company costs while protecting against fraud and account misuse. When trucks require maintenance while on the road, the ability to establish transaction volume or frequency limitations, purchase order requirements, or truck identification requirements prior to purchase authorization becomes a vital cost-management tool.
6. 75% of fleets cite consolidated billings as a key program benefit. Consolidated Billings. The decentralized sales structure of the trucking industry results in billings from multiple dealers in various formats with inconsistent transaction details submitted to national fleets, which are managing payments for purchases made by a multitude of truck drivers across the country. The time it takes to reconcile purchase orders with invoices and issue separate payments for individual transactions is expensive, though rarely quantified. Payment programs that consolidate the billing process minimize the amount of time national accounts spend administering payments - a benefit often overlooked by fleets until they’ve experienced the time-savings.
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8. Customer-Value Equates to Business Growth. In the end, a billing and payment program for national fleet accounts must provide value to their trucking business. If fleets do not find value (quantitative or qualitative) in a billing and payment program from an OEM, the program will not be successful. Only by understanding top-of-mind fleet business concerns and cost-drivers in the payments process can OEMs in the trucking industry develop a billing and payment program that appropriately addresses fleet needs. By doing so, however, OEMs can successfully target the 71% of national accounts that are more likely to purchase from suppliers with a payments program and drive incremental revenue into the sales funnel.
