The fleet tracking and management market is experiencing massive growth and is imbued with excitement. Research firm MarketsandMarkets estimates that the fleet management market will grow from $9.54 billion in 2016 to $27.90 billion by 2021, at a compound annual growth rate (CAGR) of 23.9 percent. This explosive growth becomes even more impressive when you add in IoT which is a key piece of many organization’s fleet IT solutions.
At its core, this market isn’t much different from traditional data collection applications as it’s all about the most efficient use of people, vehicles, and routes to gain efficiencies, reduce costs, gather data, create value, and generate revenue.
All said, for ISVs working this space or ones tangential, the fleet management market is expected to be quite lucrative for years to come. However, such an exciting market opportunity doesn’t come without challenges. DevPro Journal recently sat down with two fleet tracking and management experts — Ryan Driscoll, marketing director of GPS Insight and Todd Ewing, director product management at Fleetmatics, A Verizon Company — to learn more about what’s driving this growth, what challenges exist, and what lessons ISVs in any market can learn.
Without question, the most disruptive trend is the federal mandate that requires approximately 3.1 million commercial motor vehicles to use electronic driver logs. Traditionally, drivers were able to report hours driven and rest breaks via paper, but with a big push to increase safety industry wide, driver logs are now completed using telematics technology. This is a major paradigm shift for the fleet industry (primarily over-the-road fleets, delivery, oil and gas, and construction) going from a flawed, paper-based system to a forced, paperless technology. There is a lot of concern that tenured drivers will have difficulty adapting to this.
Another reason this is a big deal for the fleet tracking space is that most fleet tracking companies saw this mandate as an opportunity to get into this market. Once the mandate as announced, many fleet tracking companies brought their own E-Log solutions to market. Most E-Log systems are either BYOD (using a mobile app on a phone) or vehicle-installed tablets or computers that are hardwired to the truck.
The vast majority of fleets are waiting until the last minute (December 2017) to implement a system, just hoping that the government rescinds the mandate, which isn’t going to happen. We anticipate a huge rush for all telematics players involved with E-Logs in Q4 as business owners and fleet managers realize they need to get moving on purchasing, installing, and training their staff on how to use the new technology.
DevPro Lesson: Mandate-driven or not, become a source of education to customers and prospects about the latest trends driving their business. If mandates are around the corner, provide thoughtful and serious prompts urging customers to react before the deadline. Having such influence will position your company and software top of mind as a source of expertise.
The three most common mistakes we see are too much focus on finding the cheapest solution, the product doesn’t actually help them solve their challenges, and not trying it before buying it.
Often, fleet managers focus too much on finding the cheapest solution, rather than the solution that is the best fit for what they are trying to accomplish. You get what you pay for. We find that prospects that don’t choose us and go for one of the low-cost leaders come back to us when their contract is up, regretting their decision not to go with us in the first place.
There are a lot of factors to consider when selecting a fleet management solution, which often convolutes the core objective to needing fleet management technology to begin with — solving specific business challenges. At the end of the day, if you end up selecting a provider that doesn’t quite solve your business challenges, what good is the technology?
In a recent report, we found that 57 percent of all fleet using a fleet management solution said that they wish they would have conducted a pilot/trial period prior to implementing.
DevPro Lesson: Leverage existing customers to gather insights you can use for marketing materials and to educate your sales team. Surveys can give you data that can be useful in creating powerful messages. For example, find customers willing to explain that cheapest upfront, might mean more costly down the road.
One of the most common reasons is when the installation of the GPS devices goes poorly. This could be from difficulty scheduling installers to come out at a convenient time or the devices not being installed correctly. When there are difficulties with the installation process, it puts a bad taste in the mouths of the new customer. This is essentially the fleet management company’s first impression, so when it doesn’t go well it usually leads to a poor and strained relationship between the customer and vendor.
The other most common reason for solutions failing is when there isn’t enough buy-in to effectively implement the solution. If the owner of the business or management doesn’t fully back the decision to get GPS tracking/telematics/fleet management, it will fail. If management doesn’t do a good job of introducing it to drivers and employees, it also runs the risk of failing.
DevPro Lesson: Encourage customers to create a plan for training employees and getting buy-in from key users and stakeholders. Without internal support, a new rollout might stall or suffer unnecessary delays.
DevPro Lesson: Help your customers define and tracking KPIs to ensure your software is being used properly and delivering the results your customers expect.
DevPro Lesson: Make mobile a part of your plans if it isn’t already. The world is heading that way and you don’t want to be left behind.
DevPro Lesson: Data is one of the most valuable assets a company can have. If possible, empower your customers by giving them access to useful data they can leverage to make more intelligent business decisions.