Every savvy business owner is looking for an edge—that leg up that can help increase their profits, wow customers, and help get ahead of the competition. Especially in industries like HVAC, home cleaning, electrical, and couriers, where margins are thin and competition is plentiful. A small advantage can mean the difference between barely making payroll and record profitability.
If you have company vehicles, you know what a major cost they can be for your company. But they can also be your leg up when managed strategically (and with a little help from technology).
In this guide, we’ll explore how much money fleet GPS tracking can save your company. We’ll talk about the benefits of fleet tracking, how quickly you can expect a return on investment, and how it affects your bottom line in the long run.
What is Fleet Tracking?
Fleet tracking is a management operations process that involves monitoring the activities of commercial vehicles.
GPS tracking devices and vehicle monitoring software can provide data such as driver location, distance traveled, vehicle health, and driver safety. This data can ultimately be used to improve business operations, save money, and increase profits.
How Fleet Tracking Can Save You Money
There are a number of different ways that even simple vehicle tracking systems can save your company money.
1. Decrease Fuel Costs
Fuel is one of the biggest costs to companies with fleets. Whether it’s due to inefficient driving, poorly optimized routes, or vehicles needing maintenance, wasted fuel translates to wasted money.
If you want to save money on fuel, fleet tracking can help. You’ll be able to monitor where your vehicles are going, how long they’re stopping for, how much gas is being wasted just idling, and which vehicles are guzzling fuel inefficiently.
Each hour of idling translates to a gallon of wasted gas. If each vehicle in your fleet idles for a combined time of 1 hour a day, you could be wasting gallons of gas daily across your fleet.
While this might not seem like a lot, it quickly adds up since gas prices are averaging around $3.40/gallon nowadays. If you run your fleet vehicles 5 days a week, that translates to $17 dollars a week, or $884 a year per fleet vehicle in wasted fuel.
With this data on fuel consumption, you can surface opportunities for increased fuel efficiency and make decisions that will save you money moving forward.
2. Faster Response Times for New Jobs
When you know exactly where each of your vehicles are, you can respond to every new job in the most efficient manner. Simply assign the closest staff to any new stops and you can add additional revenue to your schedule while minimizing fuel and staff time costs.
If you add in an extra job for each vehicle daily, that’s 260-365 additional revenue opportunities per year, per vehicle. If you make $100 per job, that’s $26,000-$36,500 more revenue per vehicle every year, with minimal additional overhead.
3. Optimize Man Hours on the Road
One of the biggest expenses for small businesses is payroll. When your drivers are on the road, it means they’re not on a job-generating revenue. That’s a cost that pays dividends to track and minimize.
When your drivers aren’t supervised on the road, they might be tempted to relax more. When drivers are frequently taking breaks, pit stops, and wasting time, that means you’re wasting money.
By reducing 3 hours of wasted time on the road across your fleet each day, you’re reducing your labor costs by an average of $19,700 annually.
With driver monitoring, you are effectively putting a supervisor in every vehicle in your fleet. Drivers will be more conscientious during their routes, optimizing their hours so you won’t waste money on unnecessary labor costs.
Is Fleet Tracking Legal?
When we talk about technology with the power to keep tabs on location and driving behavior, naturally the question of privacy issues will arise. Considering the implications of any new software on your people’s privacy and liberties is important. In fleet tracking, there is a clear distinction between tracking people and tracking vehicles. By ensuring the fleet GPS tracking device is installed in a vehicle, rather than integrated into a driver’s mobile device, you can ensure that you’re adhering to the majority of state fleet tracking laws.
How Much Money Fleet GPS Tracking Can Save Your Company
The cost savings will vary on a few factors. Namely, how many vehicles are in your fleet, how technical you want the tracking systems to be, and which company you choose for monthly tracking services.
The average cost to outfit your fleet with tracking ranges from $0 to $700 in upfront costs. From there, you can expect to pay between $18 and $65 on a continued basis in monthly costs.
When people spend more on fleet tracking, they’re typically investing in extra features. It also includes some extra data collection that provides valuable insight into small and medium-sized operations.
Getting a Return on Your Investment with Fleet Tracking
GPS fleet tracking is pretty inexpensive upfront and offers long-term saving opportunities. For most companies, this means getting a return on their investment pretty quickly. Let’s look at a quick example:
Example Savings: Cleaning Company Fleet Tracking
Let’s look at ACME Cleaning Co., which has 10 Sprinter vans in their fleet. They opted for a fleet GPS tracking service which costs $18 a month per vehicle, or $180 a month for all 10. The total cost for one year of service is $2,160 with 10 vehicles.
They pay their drivers $18 an hour, they bill $100 for a typical service visit (which takes one hour) and each driver averages 5 visits a day.
1. Preventing wage loss
When we know someone is paying attention, we’re more likely to be on our best behavior. That’s why when ACME implemented fleet tracking, where management has the ability to see the location of a company’s vehicles in real-time, employees became much more conscious of the time they were wasting away from jobs. They didn’t linger quite as long getting their morning coffee and they were prompt in logging time for their lunch breaks.
ACME saw a decrease in employees milking the clock that resulted in recouping an average of 1 hour of wasted time from each employee per week: $180 per week
2. Recouping revenue from side jobs
Because management can set geofences for each vehicle and receive alerts when the vehicle exits the specified zone, ACME management was clued into the practice of certain employees taking side jobs during the day. This insight regained revenue of one job per month: $100 per month.
3. Correcting ineffecient driving
Although ACME had screened all their staff’s driving records before handing over the keys to company vehicles, the fleet tracking software surfaced an unexpected and costly issue in one driver’s behavior behind the wheel. This driver’s inefficient and aggressive driving—harsh acceleration, cornering and braking, excessive speed—was costing ACME in fuel, liability, reputation, and traffic tickets.
Armed with this new information, management was able to address the poor practices and recoup an estimated $100 per month.
Find out more about Force by Mojio’s vehicle safety features, including RoadScore™
4. Avoiding costly breakdowns
A week into using the new fleet tracking software, ACME management got an automatic alert that the check engine light came on in one of their fleet vehicles. The notification explained clearly what the issue was and management knew that they needed to have a mechanic take a look. They shifted some jobs around and brought the vehicle in for inspection.
This saved them from an unexpected breakdown that could have the vehicle out of commission for multiple days, saving the company in repair costs and revenue and wage loss: $500 per month.
Watch the demo on Force’s vehicle health and maintenance features.
5. Rectifying false customer claims
Customer service is part of what management oversees at ACME and their new fleet management software has helped settle otherwise challenging disputes.
One customer claiming their cleaner didn’t show up for their scheduled appointment was reassured that the vehicle location record confirmed that the assigned vehicle did arrive at the home within the window and was there for 15 minutes before leaving. They realized that they were unavailable at that time and missed the knocks at the door.
Another customer called, wondering when the cleaners would arrive. Management was able to send the customer a link where they could track the vehicle location in real-time.
These potential issues could have cost ACME Cleaning hundreds of dollars in lost revenue, lost time, and negative reviews. All this was avoided and about $200 was recouped in the month.
- Learn more about Force’s location sharing links.
Final Values of GPS Fleet Tracking
Between preventing wage loss, ending side jobs, stopping expensive driving habits, avoiding breakdowns, and improving customer satisfaction, ACME added $1,620 per month to their profit.
Over the same 12-month period that the company spends $2,160 for fleet tracking, they can make an additional $20,000.
To recoup their initial investment, the company in this example will only need 2 months.
Of course, each example is different. If you want to know your personalized answer, get a free demo of Force by Mojio.
Why Is Fleet Tracking Important?
Fleet tracking gives you the information you need to make better business decisions. The data that fleet tracking provides means visibility on the location of your vehicles, avoiding costly breakdowns and unexpected repairs, improving your customer service, and increasing the safety of your drivers and security of your fleet vehicles—not to mention reducing your fleet operating costs.
There are plenty of great reasons to use fleet tracking for your business. Most companies see significant savings and increased revenue potential, quickly recouping their investment.
If you want to learn how to save your business money with fleet tracking, reach out to our experts at Force by Mojio today. Take advantage of our free trial and discover how much money you can save.