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Payment Innovation to Help OEMs Retain and Grow Fleet Customers

The Australian transport industry is speeding ahead and seeing strong growth, which is good news for OEMs and independent parts suppliers. However, the industry is also facing increasingly stiff competition as fleets constantly look for ways to optimize their operations.  

Typically, the third highest operational cost for fleets (after fuel and salaries) are the costs incurred in the maintenance and repair of their vehicle assets. Fleets have historically tried to reduce these costs by shopping around the various industry players including OEMs, dealerships, independent workshops and parts suppliers.  

The OEM challenge 

Against this backdrop, OEMs must demonstrate that they can provide an aftermarket offering that reduces friction and Total Cost of Ownership for their fleet customers, whilst ensuring their Dealers remain highly relevant, if they want to retain and grow their fleet customers. 

How can OEM’s use payment innovation to provide a win-win-win for all three parties?  

The solution – build a payments network 

Creating an efficient payments and invoicing network is the solution.  

Let’s illustrate this with a hypothetical example- OzAuto (a notional Australian OEM). OzAuto understands the pain points of their fleet customers who require process simplicity, predictable costs and optimal uptime. In order to achieve this, OzAuto decides to introduce a proven payment and invoicing network that brings the desired commercial benefits to their fleet customers, OzAuto and its dealer network. 

The payment and invoicing network that OzAuto implemented enables the extension of trade credit to its fleet customers that can only be spent within its national dealer network. 

Once the network is activated, OzAuto fleet customers are invited to apply for a line of trade credit. There is no paperwork and the customer experience is entirely digital. In addition, significant lines of credit are available to meet the needs of their largest fleet customers, subject to credit metrics. 

Onboarded fleets can now use their trade credit at all dealer locations nationally. Once an order is placed by a fleet, the dealer receives payment within an agreed timeframe while the fleet customer has 30 days to settle their invoice. OzAuto has the option to offer other payment terms, such as 45-, 60- or 90-days for its clients.  

Benefits for the OEM – sales and stickiness 

By enabling their fleet customers with a low friction network across its national dealer network, OzAuto created a competitive advantage. Simply put, they made it easier for their large fleet customers to buy more, more often. 

With real-time access to orders by their fleet customers, OzAuto also gains valuable customer insights. Those insights can be used to drive more meaningful account management discussions but can also help more accurately plan their parts inventory- helping to drive supply chain efficiency. 

Benefits for fleet customers 

The typical approach of shopping for the lowest cost parts and services around may, on the face of it, show some headline savings. However, this approach also adds a significant administrative burden; one that is exacerbated by manual processes multiplied across many suppliers.  

With the payment network in place, the administrative burden of processing all these purchases is vastly reduced. Whereas they would have previously dealt with numerous invoices from multiple dealers, fleets receive a consolidated invoice or statement and settle to one party.  

The ability to buy parts and servicing using trade credit means fleets can conserve valuable cash flow.  

The accuracy, transparency and predictability of pricing is also a significant benefit. Fleets have direct access to pricing within the OzAuto Customer Portal. They are also able to receive the same pricing on parts, no matter where they buy across the OzAuto dealer network. As the prices of parts are now set and accessible in real-time, fleets can now accurately predict costs in advance. This makes budgeting and cost forecasting more accurate. 

The nature of the national program means that work can begin on vehicles arriving at any time at any dealer location- subject to the fleets purchase controls enforced through the system. Waiting for authorization by their fleet manager or their credit card number before work can begin, becomes a distant memory.   

Benefits for the dealerships 

Transactions are automatically sent to the TreviPay solution via integrations with the Dealer Management Systems in use across the network. Because dealers get paid within days of orders being placed, regardless of when the fleet pays their invoice, dealers no longer need to chase payments. This frees up resources and let dealers spend more time anticipating the needs of fleet customers. 

With pricing verified at time of purchase, the friction of pricing disputes is eliminated, helping to improve customer relationships as well as reduce time and resources spent on solving them. 

Outsourcing or Insourcing? 

OzAuto evaluated building its own payments and invoicing network but quickly decided against doing so for a number of reasons. Diverting internal resources would have both detracted from the core business and taken too long to establish. Additionally, they would have had to bring on additional employees. Finally, the risk exposure and capital required would not have been approved by the OzAuto Board.  

Instead, OzAuto turned to a trusted partner, one with decades of experience in delivering these payment and invoicing networks. In outsourcing the technology platform, services, funding and risk, OzAuto was able to implement its new offering in only a few months. 

The network quickly demonstrated its value, helping to drive increased stickiness and share of wallet of the OEMs fleet customers, strong NPS ratings and strong alignment with their Dealer Network.  

Why TreviPay? 

TreviPay has been providing such payment innovation to clients around the world for over 40 years. With proven global experience of helping clients forge close, more profitable and loyal relationships with their customers. 

With expertise in the Australian automotive industry, combined with market-leading credit lines and approval rates, TreviPay is the natural choice for OEMs and manufacturers.  

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