For a long time, fleet tracking has come with a contract. Most are two to three year terms, with some as long as five years. All the big players, and most of the smaller ones use them.
While it has never been a secret that these contracts were not designed to benefit you, the truth is that, if not carefully considered and monitored, they can harm your business in several often-overlooked ways.
Today we are taking a closer look at where contracts go wrong and imagining a more fleet-friendly future. These examples are representative selections from many conversations with fleet professionals.
WANT TO ADD OR REMOVE A VEHICLE FROM YOUR CONTRACT? NOT SO FAST
In many cases your contract specifies the number of devices you signed up for and you’re locked in that agreement. If business slows down and you sell off a few vehicles, or your business is seasonal, and you have fewer trucks on the road for six months, you’re stuck footing the bill for a device you don’t need.
On the other hand, if you’ve accumulated a few more vehicles, you’ll need an entirely new contract for that with a new two to three year term.
This statement stood out to me: “I am the controller for a large employer that owns both a vehicle fleet and equipment fleet. [Redacted]’s business model is to charge you three years in advance for their services. The only problem is that businesses change in that time and [Redacted] will not work with you when these changes occur.”
“We had two vehicles that were destroyed along with the GPS units. When we approached [Redacted] regarding this, their response was not to offer any kind of a prorated refund, but instead, to remind us that we agreed to the lease upfront and the best that they could do would be charge an additional early termination fee for the stolen and burned vehicles.”
UNEXPECTED FEES
Added a user? Want more than six months of history? Want to use x, y, or z feature? There’s a fee for that. “Hidden” might be too strong of a word, but the fact remains that you often don’t know what you don’t know, and a contract can take advantage of this fact.
In your initial demo and sales calls, you might not have fully discovered every feature or aspect of the platform needed to accomplish your product goals. It’s possible to assume that real-time tracking is what the service is all about, only to later realize the tier you contracted for does not provide that.
One source reported, “When attempting to cancel my services due to dissatisfaction or unexpected costs [we] were subjected to excessive early termination fees that were not clearly outlined at the time of signing.”
AUTOMATIC RENEWAL WOES
“We were locked into another year of service without our knowledge and are very frustrated with the service,” says a statement from Rick P.
Perhaps you noticed the clause that said your contract would automatically renew 30 (or 60 or even 90) days before your contract’s end date. Maybe it even raised an eyebrow. However, the system looked fine, you were busy, and you signed the contract.
What did you do after that? Did you mark that renewal date in your calendar for review three years from now? Neither did I. You got on with your job and relied on your fleet tracking software to do it. The problem comes when, those years down the road, maybe you want to reevaluate other providers or try to save a few bucks – but miss that cancellation window and you’re stuck with an extended term.
THE BALLOON CLAUSE
This one is heard about with some regularity, that there’s a little bit of fine print in some contracts that says the rate you’ve signed up for is an introductory offer. It could be couched in persuasive sales language. Maybe it lasts for a year and, in that time you forget.
Take time to make sure you understand the terms on this one. You could end up paying a lot more than you expected in the second and third years of your contract.
NO INCENTIVE FOR GOOD SERVICE
Perhaps the worst and most common offense is one that also seems inextricably connected to contracts. Once you’re locked in, there’s really no incentive to provide good customer experience. Some issues include offshore, junior support agents; days, weeks or even months with unresolved issues; faulty devices; and glitchy or troublesome interfaces.
Looking into the financials of a large, publicly traded company in the space, told me all I needed to know about this practice. Turns out the organization in question spent double the amount on sales and marketing expenses than they did on maintaining, updating, and improving their software. However, maybe it’s naive to expect anything different. A three-year contract is the ideal medium to facilitate growth at all costs, at least in the short term.
A BETTER WAY FORWARD
Like most contracts, those for fleet tracking were written to benefit the companies who created them. However, while industry can be slow to change, the prediction is that the contract will slowly take its rightful place next to paper logbooks, spiral-bound road atlases, and other relics of that bygone era. The trend has already begun.
A small contingent of fleet tracking providers have built no-contract, fleet-first business models that simply sidestep all the nonsense and force them to step up and earn your business month after month. A few have already achieved promising success.
One Step GPS has built an enterprise-grade solution with all the bells and whistles you expect at that service tier. If you’re currently under a contract you have misgivings about, check when it ends and review what kind of renewal clause you should be prepared for. When that time comes, consider evaluating the alternative options out there.
There’s a road to a better solution already being paved.
For More Information
To learn more, visit www.onestepgps.com.
