GPS Tracking ROI

I got a nice note from the owner of this site  a few days back.  Instamapper.com  I’m impressed with what he’s already accomplished and his future goals.  Frankly, GPS tracking of vehicles does not really cost that much when you look at the return on your investment .. I used to sell tracking systems with a promise that they would pay off in less than a year … and I had clients who got back three times their investment in 3 months … a pretty hefty ROI (Return on their Investment).

But those facts aside, it does cost something and if you are a plumber, a garage door service corporation, an independent house cleaner or salesman (you don’t think even a one-man band can profit from GPS tracking?  You haven’t thought it through, yet) then you can not or will not free up the funds to make an investment in something you don’t know by your own experience will pay off.

Also, many companies engaged in selling commercial tracking systems can’t server the one vehicle, two vehicle, five vehicle market … they’d like to, but the systems are becoming more and more of a commodity and it costs as much to sell one as it does to sell 100.

Enter Instamapper and an entirely affordable, complete under your own control, nearly free way to track any small fleet.  You might even own the right cell phone already, if not, you can buy one here, cheap.

Here’s a link to the demo which shows off the site’s features quite well.

Here’s a step by step guide that tells you how to get set up.

All in all, I rate this one pretty highly.  I don’t see a lot of business plan as yet, but I know there is one, and I can see basically all benefit and no real drawbacks.

This is an excellent site to "get your feet wet" and prove to yourself that GPS tracking will work for your business.  Later, you may want to consider several things I have noted from experience:

• Cheap cell phones don’t usually offer very good tracking resolution.
• Very fast tracking rates are good, except that over time the data collected becomes too huge to handle, you should think about graduating to a more sophisticated system algorithm in the future, such as these folks.
• Your data will not stay on the server a long time, especially for tax and liability purposes, you might want to set up a procedure to save it while it is ‘fresh’

However none of these cautions should chase you away from having a look here … a fresh, new useful idea to help you bring home more of the money you earn .. or keep your teen safe.

In the years I have been working with GPS tracking I’ve met a lot of pretty intelligent fellows and gals managing fleets.  I do believe, at times, that there is a tremendous "hole" is US business education when it comes to learning the very basic principle of calculating the true cost of something by the profit it will return from you in a given amount of time.

90% (or more) of the folks managing US fleets (even with gas and diesel hitting four bucks a gallon) mange money like this … we have a budget, it’s never enough and when things are tight, corporate (or the County Commissioners, or the School Board or whomever) won’t give us any more.  End of subject, what’s for lunch?

No many companies would appear more mundane that outfits that buy loads of scrap and re-sell it at small profit margins.  Yet here’s a current story of an "old technology" company that made a huge investment and made it pay off four times a year, year after year:

Alliance was an early adopter of Recycling Operations Manager. At an implementation cost of $300,000 across all the Alliance yards, that could have been a risky bet. But Zweigbaum says he effectively recoups the investment every three months in profits. Now 21st Century Programming’s system is spreading to scrapyards across the country.  full article here.

Yes, you are right.  I’m not talking about GPS tracking here.  I’m talking about specialized hardware and software that costs proportionally a lot more than GPS tracking for your fleet.

Yet Alliance was clever enough to pull this off.  If you do the math, spending $300,000 brought in an extra $900,000 in the very first year alone.

What could your operation do with $900,000 a year extra profit?  It’s easy to have that kind of savings, and the more expensive fuel becomes, the easier it is to attain those sorts of savings.

So, when will you catch up with the rust belt?

Here’s a recent item of interest about the actual cost of driving from MercuryNews.COM

Q How much does it really cost to drive a car one mile, taking into account the cost of gas, insurance, maintenance and depreciation? It certainly makes one reconsider driving to the grocery store for milk and is helpful when driving around a group of freeloaders who think a donation of a few dollars will more than cover the expense.

Barbara Horning
Morgan Hill
A About 62 cents a mile on average, according to calculations based on a formula by the state auto club with gas selling for $3.50 a gallon. That’s up from 56 cents a mile a year ago. The cost varies from about 45 cents a mile for a small car to close to 70 cents for a sport-utility vehicle or van. Click on www.csaa.com and search for Your Driving Costs. The AAA form is based on gas selling at $2.26 a gallon, so update the numbers to figure in today’s price of about $3.50 a gallon.

OK, gas is much more like $4 a gallon now … just a few weeks since I first noted this article for a future blog post.  Wow. And how much more than a passenger car does a truck cost to run … especially a heavier truck in delivery or point-to-point freight operation?  Mind boggling at times.

I should have posted this on Earth Day.  We all know we should do something, but hey, it’s hard for many of us.  we’re often in the position of running on a treadmill … trying to earn enough just to cover costs and maybe have enough left over to pay the kid’s dental bills.

So, with all that going on, this guy Dave is trying to sell me GPS?

Well, actually, I am not selling anything.  I’m trying to help you close that gap between income and outgo so that becky can get those braces she needs this year.

How many miles do you vehicles drive in a month?  2000?  3000?  How many do you have on the road?  2?, 10?, 27?  Let’s make it simple.  Suppose you have 10 vehicles … small ones … doing 2,000 a month.  That’s a direct cost of about $14,000 a month your business has to generate in profits before you can even begin to break even. 

Installing a quality, industry-standard tracking system on these vehicles and using it to monitor nothing but excess mileage and fuel economy will save you 20%, at least.  I’ve installed and monitored thousands of these systems and I’ve never seen less. 

To equip 10 vehicles should cost you less than $7,000 … including an allowance for some downtime, employee training, etc.

$7,000 to earn back, and $2800 a month in savings.  How many months will it be before you show a profit?  Looks like about 2 and a half to me.  So after 2.5 months you are going to be $2800 ahead of the game every month?  Eight more full months of savings in the first year looks like a bit over $22,000 to me.  I know some of those orthodontists are expensive, but that ought t6o cover Becky’s braces, don’t you think.

Of course, if gas and diesel drops in price you might save less.  Hmm, wanna bet that is going to happen?

Our good friends over at GPS Lodge published a post last night about "Predictive Traffic" on Google Maps.  I have mentioned several times how aggregated data from GPS tracking equipment in cars and trucks, along with other traffic sensors already in place, can save time, save fuel and … bottom line … improve business profits. See:

GPS Adds Up To More ,

GSM-Based GPS Tracking World-wide ,

GPS ROI Using Traffic Sensors — Part 1

For a few examples. 

Here’s a real-world example, already accessible on one of the greatest tools available to travelers and business planners anywhere … all free.  Thanks Google and thanks GPS Lodge for breaking the news. Go to Google Maps and select traffic.

Many aspects of business revolve around miles (or kilometers) traveled.  For years we have had a useful tool in almost  every car and truck called an "odometer". (French odomètre, from Greek hodometron : hodos, journey + metron, measure).

Mileage reimbursements to employees, freight charges to shippers, even approval or denial of expensive warranty claims al\re all based on this simple little row of numbers.,

Believe it or not, in the US there is no real requirement that this device be accurate at all.  Testimony at court cases involving miles traveled indicate a generally accepted tolerance of as much as 20% +/-.  This can mean thousands and thousands per year.  I mean, in what other normal area do businesses accept 4% errors?  Want to go to the bank with a $100 deposit slip and hand that along with $96 to the teller and see what happens next?  Come on, it’s 2008 already … we are talking about a basic unit of measurement that costs most of us a lot of money here.  4%?

For years many commercial operators have used a device called a Tachograph … on of those registered trade names that has become universal, kind of like Xerox.  In Europe. also a heavy Tachograph user, the required accuracy is +/- 4%.  When you run a trauck100,000 plus miles per year, that is still a lot of room for error … especially when driving costs go way over $1 a mile.

Why can’t GPS solve this problem?  Well, it can help … you can expect accuracy in the +/- 1 % range if you chose the correct GPS tracking equipment.  But this still doesn’t get you scientific (or legal) proof that is needed when you are talking about money, employee compensation and even criminal evidence.

I have long been a reader of the excellent trade magazine, GPS World.  They feature a monthly column titled "Innovation".  There are times, quite frankly,that Innovation is way over my head, but I always try to blow through and get at least the gist of each month’s article.  After all, learning means starting from scratch and stretching your mind a bit, yes?

This month’s article is technical and scholarly enough to suit anyone, but it is readable, and very informative.  Even though the discussion is technical, this is down to earth business information that owners and executives need to know.  Recommended.

Here’s an interesting report from the UK that shows that telemetry, usually GPS powered, is really catching on.

Analyst firm Berg Insight found 2.2 million passenger cars in Europe had an on-board telematics device at the end of last year. Stolen vehicle tracking is the primary telematics application, followed by automatic emergency calling, driver assistance and motor insurance telematics.
“After many years of slow adoption, we now see that the market is entering a growth phase,” said Tobias Ryberg, senior analyst at Berg Insight. “The penetration rate is still below 1% of the total car [registration], so there is a huge untapped potential.” full article here.

This is some good news for the GPS tracking market and for insurance companies … and all drivers who, after all, eventually pay the costs of all car thefts when they pay their insurance fees.

And I want to point out something here that the media often misses in these sort of reports … theft recovery systems, such as LoJack and GPS-based tracking systems which can aid in theft recovery as just one of their capabilities.

The LoJack-style systems are based on what is called a “bird dog” in the trade. If the vehicle goes missing police (the only authorized users) can drive around and pin point the location of the stolen asset if, and only if they have specialized receivers in their patrol cars. This is a big hidden cost and potential shortfall. On the plus side, Lojack and it’s technology colleagues do not depend on seeing the sky as GPS routinely does, so they can be used to find a stolen car say in an underground parking garage, which GPS really is useless for.

That being said, why would a person spend a significant amount of money to install a device that will only aid in stolen vehicle recovery? With GPS tracking you get:

• Proven savings on fuel … as much as 15% is common
• Proven savings on safety and even safety-related aspects such as workman’s comp claims
• Proven time accounting
• Proof that the vehicles went where they were supposed to and when
• Real-time alerts for maintenance problems to avoid high repair costs
• With the right system (networkcar.com is one) you can even automate the emissions testing process and avoid all that wasted time.

In short? theft recovery is great, but there is so much more that you can get, even as a private owner, with a true GPWS tracking system. Buy wisely, it’s your money.

There’s a lot of ways to advertise.  Many of us say we hate advertising but we all use it and respond to it every day.  It  wouldn’t only be a dull world without it, it would be a world of paupers, because advertising is essential to business growth … and business growth is what gives you a job and money to spend.  (I know that sounds a little basic, but you would not believe how many people these days live in daddy’s basement and have no concept of commerce).

Billboards have long been a very effective advertising media … especially for drivers and passengers on the road, but they have a lot of disadvantages:

• Spoil the view
• Fixed location … pay for an add 24/7 yet only have it seen by many during rush hour
• Difficult to change … sell one add, can’t resell the space for a fixed time.

Enter the mobile billboard.  This concept has actually caught on much faster overseas than in the US … these roving billboard trucks are very common here in the Philippines … we aren’t as third-world as some think … or is it that the US is becoming third-world?  Hmmm, that’s an argument for another day.

Big advantages here because the trucks take up no fixed space, they don’t have to run 24/7, they can easily advertise multiple client’s products and, here’s what no other form of advertising can do … they give the client detailed time, date and location display data, along with very accurate estimates of ‘eyeballs’ … so calculating the advertising ROI is way more accurate than it has ever been.

Once again, there’s a lot more ways to get an ROI on GPS tracking than many people ever consider.