We live in turbulent times. Very many vehicle tracking companies are finding that the business models that they have relied upon for years are build on sand and work only in boom-time. Damage limitation is the key for so many today. So what are the problems faced by the CEO’s?

1) By far the biggest issue has been the ready availability of credit to lend to almost anyone. The lightness of the regulation and the pressure to meet/exceed targets by the finance houses has led to every shaky business being lent money to purchase a vehicle tracking system. Vehicle and asset tracking companies made hay whilst the sun shone and sold third party leases by the thousand. Pay nothing now but commit to ING or Shire Leasing for 3-5 years. Tracking companies took the whole lease value up front from the lender – and spent it. Post credit crunch, the finance houses have applied the brakes in no uncertain fashion and companies are now left with little new income from leases, no pot of money to dip into to self-finance and no way to pay their fixed costs. The lesson from this is simple – if you make hay whilst the sun shines then you had better store some away for when it rains. If you didn’t then you are done.

Now it is raining, the tracking companies are struggling at best and closing at worst. And their clients will be paying for years for their greed or short-sightedness. (Leases are payable regardless of the system working or not – ING an Shire lent only money not the system and are not responsible if your system no longer works).

2)  Economic downturn. Whilst vehicle tracking and fleet management are, done properly, a way to save a large amount of money for a client company, it is often seen as an expense! Systems are sold on price rather than value. The perception is that all systems do basically the same things. The reality couldn’t be more different. Asset and vehicle tracking companies need to come out of the ‘double glazing’ mindset and establish clear benefits with a consultative approach, long term commitment from them and serious customer service. Until they do this, the ‘cost’ of the system will be the killer for the provider. Sell for nothing and you gain nothing.

3) Barriers to entry. The market is busier than ever. Almost anyone thinks that they can make money from tracking these days. But sound businesses are not built on shaky foundations. The companies established over 7 years ago that are still around are still there for a reason. Very many have fallen by the wayside in the interim. Those that have prospered and grown have done so through sound business models (public companies excluded as the evidence is completely the reverse). The bottom end of the market is flooded and the participants drowning. Barriers to entry used to be the very technology which has now become mainstream. But they are re-establishing themselves now. Advances in technology offer added benefits to clients and the long term winners are embracing the new technologies to offer new features and benefits. Selling on price is the way to destruction, the smart companies are moving to selling on value and the worthwhile customers look for value.

So what is the CEO’s job throughout all this?

CEO’s of tracking companies need many skills to cover all areas of the business. Their job is to steer the ship through the choppy waters of change. Set the sails right and they sweep ahead of the flotsam and jetsam that sells basic systems on price. Set them wrong and they sink in the melee.

Simplytrak have long been established as one of the most adaptive companies in the industry. In fact, this industry moves so quickly sometimes we wonder how any of the larger companies in the marketplace can ever expect to make any money at all – with the speed at which the leviathons take to turn.

Back in the day, GSM and GPS were the way to go for the originators of this industry. Add to that basic locally held mapping software, dedicated PC’s and single or multiple dial up modems and it might as well have had a hamster running in a wheel shouting instructions to the user. But back then it was all that there was. Then came broadband and GPRS. With broadband came faster Internet and with GPRS came multi-unit updating. ‘Live’ tracking became more, well, live – though many companies charged extra for faster updating. Faster than the 10 minutes that you got when you signed up to headline rates anyway!

Customers changed from logistics companies to white van man, from the courier to the service engineer. Nowadays sales fleets and landscape gardeners are just as likely to have vehicle tracking as Eddie Stobart; Peninsula Business Services as likely as UPS. But it is not just about vehicles anymore either. All kinds of assets from trailers to generators, horseboxes to caravans are tracked too.

Software is expected to be 100% web accessible now. Google maps and Virtual Earth with satellite and street views are more likely to be found than maps held on local computers. Everyone logs in via username and password protected web pages. Software is old hat and java rules the waves.

Third party lease providers, ING, Shire and GE Capital have had their cake throughout the history of tracking. Now that credit is crunched and companies that relied on up front income have fallen thick and fast. It is the sort of radical change that big companies can struggle with, yet the smaller and more agile quickly adapt.

CanBus has become more standardised too. Over-revving, harsh braking and impact sensing are all possible. Now Formula 1 telematics is starting to hit the mainstream. If this pace keeps up then you can expect to be dialled in to on-board camera action before you know it.

And all this has happened within a few short years. Sea changes in methodology, hardware and software, financing, data delivery and in-vehicle information. Faster, everything must be faster. And that is the key and the reason that the big players will always struggle. What they do best is sales. However, with so many niche players offering specialised services now, their traditional market is squeezed and adaptation is difficult.You cannot turn an oil tanker around on a dime.

The old business models no longer work now. Only the swift will survive. Consolidation has been mooted as the way forward. But we don’t think so. Specialisation is the way to go. The market is more likely to be dominated by niche players than leviathons by the end of this decade… and the end of this decade is just around the corner.

If you think you have seen the last of the big names disappearing then think again. Watch out for the specialist providers. They are the ones to fear.

Following on from a number of recent distribution contracts signed for individual countries on the African continent, Simplytrak have recently signed up a Master Distributor for the whole region.

Africa and Simplytrak are developing a long and fruitful relationship based on distributors meeting strict criteria for representing the company in their individual countries. These criteria include minimum standards of customer service, price levels, authorised use of the Simplytrak brand name and minimum quarterly order levels. “The model had far proved successful in seven African countries and so we felt it was time to bring them together under one umbrella” said David Coleman, joint CEO.”We were already active in Ghana, Nigeria, Libya, Kenya, Zambia, South Africa and Tunisia. It made sense to sign a Master Agreement to allow for more efficient distribution of products on the continent and to assist in supporting our successful regional resellers” he continued.

In signing the new agency, Simplytrak aim to increase penetration of the continent by both selling in additional countries and increasing sales in those already established. The new Distributorship will cover all Simplytrak products from the stolen vehicle systems through to the advanced fleet management and generator products that have all been developed in house. Simplytrak Asset Managers, the new Master Distributor, are based in a number of African Nations and have strong relationships with a number of Government agencies and industry groups. They are particularly strong in the oil, banking and mining sectors.

Simplytrak Asset Managers can be contacted via the website www.simplytrakassetmanagers.com

Simplytrak can be contacted via www.simplytrak.co.uk