Fleet Credit Card Study 2011


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Executive Summary of the 2011 Stiel Direct Fleet Credit Card Study.

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Fleet Credit Card Study 2011

  2. 2. Embracing the Payment Solution to Build Market ShareTODAY’S FLEET MARKETER’SCHALLENGE 2
  3. 3. Our Goal Today –Present You the Most Relevant Information & Trends in Fleet Cards 3
  4. 4. STIEL DIRECT’S QUALIFICATIONS Principals experienced working with all major fleet card issuers  Fuelman, WEX, Voyager, Visa Fleet, others Over 25 years individual experience in fleet and commercial credit card marketing and product development  Bank of America, First Interstate Bank/Wells Fargo, Visa USA, Citibank, Chase, others Formerly Director of Payment Systems for Tosco & Circle K In-depth market research capabilities 4
  5. 5. STIEL DIRECT’S FLEET PAYMENT STUDY Focused on entities that owns or operates from 5 to 300,000 vehicles for business purposes on public roads during 4th Quarter 2010 Across a broad scope of private & public sector fleet operators throughout the United States Designed to measure fleet payment preferences, and the opportunity for fleet merchants to use the payment proposition to build market share Help clients define the impact of changing payment habits and preferences of fleet operators across the United States 5
  6. 6. TYPES OF FLEET VEHICLES STUDIED Fleets operating automobiles, motorcycles, light-duty trucks, and heavy- duty trucks Fueled with gasoline, diesel, or an alternative fuels, such as propane, natural gas, or electricity Fleet vehicles that refuel and obtain maintenance services at a retail service stations, truck stops, cardlocks, and private on-site fueling facilities 6
  7. 7. RESEARCH & INFORMATION SOURCES  Stiel Direct’s proprietary research methodology weighted against industry demographics  Telephone survey to 200 fleet managers  Mail-in survey to 3,500 small business owners  Focus Group panels in three cities  United States Department of Energy  United States Department of Transportation  Syndicated fleet card studies 7
  8. 8. A DEFINITION OFIMPORTANT TERMSFleet Industry Terminology
  9. 9. ENHANCED FLEET DATA Includes all of the following:  Odometer readings  Product purchase detail - products/grades, and quantity/gallons purchased  Driver and/or vehicle IDs  Fuel Tax information  Financial & Transaction detail - date, time, location, spending, etc. 9
  10. 10. A HISTORY OF FLEET CARDS Government agencies and private enterprise have used oil company credit cards and proprietary on-account billing systems since at least the 1930s Enhanced fleet cards introduced in 1980s & 1990s to fight fraud, misuse, and provide improved management reporting  Fuelman, Wright Express, and many others introduced their own brands of fleet cards  Oil Companies improved offerings  Banks and Card Networks have offered specialized purchasing cards for fleet operators 10
  11. 11. THE VALUE OF ENHANCED DATA The basis for flexible reporting tools - exception, tracking, and control reports Used to monitor vehicles and driver performance:  Evaluate expense efficiency  Monitor policy compliance  Analyze purchasing patterns 11
  12. 12. TRENDS IN FLEET PAYMENTS Among all fleets studied, use of cards is growing 15% annually  42% use Enhanced data fuel cards  27% use Basic oil company proprietary cards  20% to 35% use Bank cards, ATM/debit cards, and T&E/Corporate credit cards  10% to 20% still use cash or direct billing arrangements with local fuel marketers/distributors, but is declining in favor of fleet cards Note: Numbers total more than 100% due to multiple payment options used. 12
  13. 13. GOVERNMENT PAYMENT SOLUTIONS  Use of fleet cards is a major initiative for Federal, State, and Local Agencies  Governments seeking enhanced solutions for managing fleet expenses - Fleet Cards considered key component of fuel and fleet expense management  Key Strategic Initiative for many fleet suppliers  Government agencies decision making varies by agency, and was included in study database 13
  14. 14. FLEET PAYMENT SELECTION METRICS Attribute Importance Fleet Rating Cards  Consistent Pricing High Yes  No Fees High Varies  Discount Pricing Opportunity High Yes  Fraud Protection High Yes  Wide Site Acceptance High Yes  Detailed Reporting Medium Yes  Maintenance Reporting Medium Yes  Card-less Transponders Medium Future 14
  15. 15. HOW DRIVERS USE FLEET CARDS Off-site fueling  Fuel Only (85%)  Both Fuel & Maintenance (10%)  Fuel, Maintenance, Business Expenses (3%)  Maintenance Only (2%) On-site fueling & maintenance facilities  Various accounting practices, but little fleet card usage 15
  16. 16. THE MARKET FOR GENERAL PURPOSEFLEET CARD PROGRAMS Less than 5% of fleet managers are comfortable with their vehicle operators having the ability to use cards to conduct transactions beyond vehicle expenses  Overnight vehicle travelers, including long-haul truckers and sales people  Executives and traveling sales personnel driving company cars Limited benefits for the vast majority of fleet managers 16
  17. 17. TRENDS IMPACTING FLEET CARDS Increased use of enhanced data-capture fleet cards for all variable fleet expenses  Fuel, maintenance, repairs, vehicle appearance/care, replacement vehicle rental Increased use of exception reporting based on fleet credit card transaction data Improving Web-based card/driver account management control systems and reporting 17
  18. 18. TRENDS IMPACTING FLEET CARDS Integration of fleet variable expense management into corporate purchasing/accounting legacy systems Wireless and transponder technology will improve vehicle data gathering, reporting, and analysis 18
  19. 19. TRENDS WHERE FLEETS PURCHASE FUEL Among fleet operators of all types, fuel is purchased from over 195,000 fueling sites  Retail service stations: 75%  Cardlocks & truck stops: 17%  On-site fueling facilities: 8% On-site fueling is continues to be viable to many operators, but is declining rapidly  Fleet Cards can provide enhanced control and accounting advantages when used at on-site fueling facilities 19
  20. 20. FLEET CARD REPORTING TRENDS Fleet managers increasingly want reports that are comprehensible, comprehensive, useful, flexible, and actionable Most fleet managers find sophisticated reporting helps run fleets more efficiently Maintenance reporting is growing in importance as fleet managers continue to become comfortable with enhanced reporting capabilities 20
  21. 21. EXCEPTION REPORTING TRENDS Fleet Card data is increasingly used to identify exceptions to fleet policies, practices, and budgets  The ability to view exceptions by vehicle and drivers allows greater efficiency and flexibility in managing a fleet Fleet operators vary in the exceptions they want reported  Fleet managers establish parameters for each exception when their account is set-up, and change it as needs dictate Fleet Cards offer sophisticated and flexible exception reporting capabilities to fleet operators 21
  22. 22. TRENDS IN FLEET VEHICLE REPAIR,AND MAINTENANCE EXPENSES For every dollar spent on fuel, fleets spend an additional 20 to 40 cents on other fleet variable expenses Fleet Cards are improving information capture on fleet repair, vehicle washes, & maintenance expenses Managers use reporting to reduce expenditures for these activities through vendor negotiation and monitoring procurement 22
  23. 23. NEWEST TRENDS GPS Technologies  Mobile Technologies  80% of business fleet operators  67% of drivers use smart phones use GPS devices in at least some of (described as phones with at least their fleet vehicles web-browsing capabilities)  27% of fleet drivers use GPS to at  23% of fleet owners are “very least “occasionally” to find fueling interested” in in-vehicle mobile locations tablets and apps that improve driver productivity and efficiency  12% of fleet drivers use text messaging to find cheapest fueling locations 23
  24. 24. MOST VALUABLE FLEET CARD REPORTINGINFORMATION Date, Time, Location of Purchases Cost Per Mile Brand & Types of Fuel/Services Bought Other Products/Services Purchased Driver-input Odometer Readings Number of Gallons/Quantities Purchased Price Per Gallon/Unit Paid Total Purchase Amount Miles Per Gallon 24
  25. 25. TRENDS IN FLEET CARD ENHANCEMENTS Fleet Cards are adding valuable enhancements  Driver Assistance Center  Auto Rental Insurance  Emergency Card and Cash Replacement  Liability Waiver Programs  Travel and Emergency Assistance 25
  27. 27. FLEET CARD STUDY CONCLUSIONS Enhanced Fleet Cards increasingly delivers significant value to fleet vehicle operators by offering  Enhanced data capture  Robust reporting  Wide merchant acceptance Organizations are attaining positive economic benefits  Proactively using Fleet Card information and controls  Some fleets are integrated reporting of Fleet Card transaction data with Purchasing Card & Corporate Card data 27
  28. 28. MORE CONCLUSIONS 95% of Fleet Managers prefer payment solutions that limit usage to vehicle related expenses when appropriate Less than 5% of fleet managers have a need for Credit Card programs that offer expanded purchasing capabilities beyond traditional vehicle expenses (e.g.,Visa Fleet, MasterCard Purchasing, or AMEX) Merchants need to embrace fleet payment solutions as a cornerstone to effective fleet marketing solutions 28
  29. 29. Dan StielPrincipal ResearcherStiel Direct LLCwww.stieldirect.comTHANK YOU! 29