Fleet GPS Tracking has been around for 15 years, and customers have gained a lot of experience in buying, comparing, and extracting more from their fleet tracking solutions.
But as recently as a few years ago, a customer would get into a 5-year contract with their GPS tracking provider. Long-term contracts usually led to complacency on the provider’s part and a lowering of service standards. Customers have seen enough and have had enough of this.
Customers also realized there was a flipside to the monthly fee that didn’t require a down payment for the device. Providers chose this strategy to encourage adoption. The customer didn’t have to pay at once for all the devices in the fleet. As the terms began to change, the contracts changed too; often, the customer was only worse off in the end.
The Anatomy of a Punishing Contract
- Tons of legalese: of course
- Lengthy: Supposed to be good for you because you are locking in a high price for several years even as the technology is changing around you ?? Not!
- Punishing Early Termination Fees (ETFs): typically calculated by number of months remaining multiplied by the monthly subscription price. That’s a lot. At $35 per month, in a 3-year contract, if you want to get out at the end of year 1, it means $35 x 24 = $840 per vehicle. For a fleet of 100 vehicles, that’s $ 84,000!
- Every move you make: Each device you buy has its own contract length. Buy five on Jan 1, 2022, and those five expire on Jan 1, 2025, for a three-year contract. Let’s say your fleet expands. You then buy ten more on Sept 5, 2022, and now those ten expire Sept 5, 2025. Repeat this each time you add new trucks to your fleet, and you could have dozens of dates to track. That’s exhausting. Who can ever keep track of this? How about some sanity here…co-termination to the same date, anyone?
- Auto-renewals that sneak up on you: “You must notify in writing 90 days before”. Well, that’s hard to do unless you have dozens of calendar reminders set up to keep track.
Is That a Good Deal and a Good Deed?
Customers can now estimate the hardware component of the overall cost, so these can’t be tucked away in the folds of the contract. Other fine print conditions also restricted the customer’s flexibility and choices.
The barriers to switching providers are today much lower. With the advent of over-the-air programming, adding new vehicles has become a much-simplified procedure. At the same time, a tracking contract can prove beneficial for both sides. It can help the provider deliver better service while the customer doesn’t get locked in.
The checkpoints for a decent contract:
- 1- and 2-year contracts unless the negotiation over a longer tenure fetches a substantial customer benefit.
- Customers don’t bear any further costs towards hardware once paid in full.
- The quality of customer service is what counts, and while the contract indicates an assurance of it, the provider’s reputation for service matters. Azuga has been recently ranked as a Top 5 Fleet Management Provider with a high ranking for Customer Service as per Software Review of the Gartner Group.
- Ultimately, the contract will be about what you get for what you pay, and this is where an authentic ROI Calculator can help you gauge the actual worth of your investment in telematics.
- Include access to many apps via an integration engine that helps fleet managers quickly improve fleet productivity.
Finally, this isn’t just about the contract; it’s about the next generation of technology. The tangled web of Black Box GPS will not feed you insurance discounts (seen the Progressive commercial ?) and other goodies from the maintenance folks who all want your business….and are willing to give you a great price. In fact, Fleet GPS can often quickly pay for itself. Choose next-generation technology.
