Keith, ARI entered the UK market at the beginning of 2012 as one of the world’s leading fleet management service providers. Why was the UK market important to ARI?
There are a number of reasons ARI decided to focus on the UK. Firstly, we already had global specialists operating in mainland Europe for our multinational clients, whose needs were getting greater and greater. ARI saw the opportunity to establish a platform in the UK to meet these needs. Secondly, we see the UK as the major fleet market in Europe. The market is currently very mature and we expect that it will continue to change over the next few years. It is mainly driven by leasing companies in terms of contract hire, closed end leasing and it is more focused on cars than vans and trucks so slightly different than the US market.
As well as a renewed need for transparency in the UK market, businesses are looking to unbundle their services. The larger corporations especially are asking themselves if they need every single fleet service or just a core selection. It is no longer simply about total outsourcing and funding, ARI saw the opportunity to use the American model here.
They are looking at a complete range of fleet management solutions with maintenance management and accident management services being our core products currently. They are looking to have a corral of vehicles and are investigating how to remarket them.
The old adage of outsourcing and only using one supplier is not going to be the way forward now. Because of this, there are more procurement people getting involved in the details. Over the years, especially in the last five, the frequency of procurement teams coming in and wanting to know exactly how a contract quote is made up, the interest margin, and what they are paying on maintenance has increased tremendously.
What are some of the things that you do here in Chippenham to support your clients?
Since ARI acquired the business it was decided that a renewed focus on client support and relationships was required. Over the last twelve months we have established a rock-solid client relations and account management support framework, which adds value for our clients because we can be more strategic and act as a real business partner.
As a fleet management company, we place an emphasis on becoming part of each customer’s business because we are responsible for spending their money. If we are going to spend wisely and properly, we need to understand the strategy of each company and understand exactly what their fleet requirements are. Our account management team does a fantastic job of getting under the skin of our clients’ needs, advising on the best methods of fleet management and ultimately lowering TCO.
A new client of ours has told us that their previous fleet supplier hadn’t seen them in the last 12 months. Since beginning our relationship with them, they have been impressed by our attention to detail during the implementation phase and the input from our account management team. The added value of managing the account properly and being a part of our customers’ businesses is one of our major differentiators.
Congratulations on winning the Van Fleet Award for your extraordinary technology. Let’s talk about the global reporting capabilities.
What attracted me to ARI was not only the brand and the people, but the technology, especially in terms of business reporting, management reporting to clients and business intelligence. ARI Insights and Analytics are the products and tools we use to help businesses gain access to the information they need either via a ‘self-service’ method or with input from our account management teams. This technology is pushing the market forward in the UK. We take data from any source; telematics data, fuel data, maintenance data, whether it is sourced from within the company or externally, in order to give the client exactly what they need in terms of driver profiling information, spend by type of vehicle or efficiency of vehicles, for example.
We use HANA technology from SAP and the speed at which companies can actually analyze their data and get business intelligence this way is greatly ahead of the competition. This is also a major differentiator, because the customer can touch it, see it and put it to good use within their business, quickly. Compiling information from different sources can then be used to give us an accurate oversight of the fleet and a summary of driver behavior, all helping us to be strategic in advising on efficiency, cost savings and general fleet tactics. We prioritize investment in technology in the UK, but because of our global group connections, we can also leverage the investments and technological advances made by ARI in the US.
How does ARI UK work?
The UK market is different to the US in the respect that currently most of the vehicles in the UK were funded through contract hire with maintenance services. All of the services are grouped together into a single rental figure. Yes, clients are becoming more aware of how to break that rental down, but even then it is not broken down to what I’d call ‘total transparency’.
As a fleet management company, we are responsible for spending our clients’ money, so we need to be able to show our clients an audit trail. Through ARI Analytics and Insights, businesses can see what we are paying each supplier. There is no short pay, no hidden rebates: we will be totally transparent. We will take an ARI fee or transaction charge but that is also transparent. By being transparent, everyone is well aware of where they sit. If we are delivering savings, those can be measured. Our clients see the benefit of paying fees because they see the true underlying cost of running their fleet as opposed to just a rental.
It had to be eye-opening to you and the fleets you approached.
ARI is a new name in the UK market and we only rebranded the company last October. We have had some large opportunities come through these doors this year, and I think they went away with their expectations raised a little higher because they saw our technological capabilities. The great thing is that most of our technology was rolled out in the States, so it is leading edge here in the UK but we have significant experience using it in the US.
We will be sharing this technology with our UK clients in early 2014. We have had a number of large client wins in the last few months on the back of what they saw during their visits. They fed back to us and said the management reports were the differentiator and were happy to pay a premium for the advanced offering. As one client said, he was happy to pay for ‘the Rolls Royce service’.
You talked about establishing a presence and then marketing the existing concept. What about your existing clients? How have you integrated the systems and the processes?
We are still in the very early days of introducing these technologies to our UK client base. As with any acquisition really, the first priority for ARI was corporate culture and creating a really strong system for internal communication. We wanted employees to really feel that the business was improving and we put a system in place to support staff development. At ARI, we have ‘PIE’, Partners in Excellence, which is about developing our staff in terms of quality management, personal objectives and how they interrelate with each other. It is our internal version of ISO9001, but a lot more fun! It is also linked to reward programs. It is not about ticking a box; it is about really embracing the staff and embedding the business objectives and our values. That was probably one of the major tasks initially, and then the next priority was creating our successful account management team. With a solid foundation, we can now begin rolling out the technology.
What are the market needs that are common to any fleet manager in North America, UK or anywhere in the world?
All managers, regardless of geography, want to run an efficient fleet, and you achieve that the same way in the US and in the UK: by understanding that fleet’s needs. How many vehicles do they need, what types of vehicles, are those vehicles fit for purpose, what sort of policy advice is necessary? These questions are the same across the board.
While specific policy advice can differ county to country, the service itself is a common denominator. In the UK, the slight difference is that our market is driven by CO2 emissions from a fiscal and taxation perspective. So, a lot of our fleet policy advice is around this.
Another common requirement is the use of technology to drive efficiency. Both markets need that technology to be efficient. Customer service is the same. Without a shadow of a doubt, clients, whether in the US, the UK or Northern Europe, demand high service levels and they expect them as standard.
Keith Allen joined ARI Fleet UK as Managing Director in late 2012. Formerly Fleet Support Group, ARI acquired the UK fleet management company in 2011. Previously, Allen was Managing Director of ALD UK, a position he held for 13 years. Allen currently serves as the Chairman of the BVRLA’s Leasing and Fleet Management Committee.