Business Case For Smart Maintenance


The objective of the Smart Maintenance  is to create a new maintenance customer engagement model and improve the operational efficiency of customer’s business by utilising vehicle telematics devices and a cloud-based service, accessible through web-browser and mobile application interfaces. By making the customer's daily fleet/vehicle management tasks automatic and by providing them access to valuable capabilities like fleet GPS-tracking and automatic reporting, the maintenance company will increase their customer loyalty, lower their costs, and increase the resource and personnel utilisation. But what is the bottom-line impact a workshop can expect from adopting the Smart Maintenance -approach?

Based on our experience in working with the maintenance businesses and franchise chains in Europe, the bottom-line impact of Smart Maintenance varies depending on the business type (dealer, independent), target customer segments, market competition, and go-to-market approach. Despite of the differences, however, there are also strong similarities between the business outcomes and, by adopting the Smart Maintenance approach, the maintenance businesses typically

1. Increase customer loyalty in their existing customer base, in three different categories

  • Customers utilising only the Smart Maintenance services (mobile client -only or with an on-board device).
    The churn of these customers is typically reduced by 40%, i.e. with 12% annual churn the Smart Maintenance results in a 5% increase in the overall customer loyalty.
  • Customers utilising the basic value-add services such as automatic expense claims, tax reporting, and driving style analysis
    As these customers are utilising more features in their every day tasks the Smart Maintenance offering has more significant impact on their loyalty and the churn reduction varies between 63%-78%.
  • Customers utilising full GPS and telematics based fleet management services
    These customers typically commit to long-term maintenance contracts and have a high contract renewal rate. Hence the customer churn is practically eliminated in this segment..

2. Create operational cost savings in the customer engagement tasks, like service booking

  • As the customers book the car service by themself, information on the service to be performed is automatically available online, and less time is spent in explaining labour and cost items to the customers, the maintenance and repair shops save in the customer egangement labour costs. Depending on the Smart Maintenance integration level these savings typically vary between 14minutes - 23minutes per customer visit.

3. Increase market share

  • With improved maintenance service experience enabled by the Smart Maintenance features
  • By providing customers cost-effective & feature-rich GPS fleet management capablities
  • While the exact market share impact of Smart Maintenance is difficult to determine (vs. advertising campaigns and other initiatives), by working with our customers we believe it to be in the range of 0.25% - 0.7% (of the total available market).  

4. Increase utilisation of the workshop resources by

  • Balancing the quiet and busy times with proactive invites (i.e. long customer wait-times increase the customer churn and hence lower overall utilisation)
  • Increasing the number of total customers (market share increase)
  • Increasing the visits by the customers who do not otherwise service their cars according to the recommended schedule (up to 40% of vehicle owners); To avoid double counting the financial-benefits we usually consider only this as a factor in the increased utilisation, and estimate its impact to be approximately 10%. 

5. Create additional revenue from value-add services

  • The value-add services, like the fleet GPS-management features, can be either bundled into the vehicle maintenance packages or sold as a cost-attractive add-on service. The bottom-line impact to the maintenance business varies based on the pricing strategy and business type but in most cases the additional revenues improve the per-customer profit by 7%-11%.  

In addition to the direct benefits, some maintenance businesses create additional revenue and customer loaylty by partnering with other service providers (such as fleet management, insurance, tires, fuel, etc) and by enabling them to utilise the same telematics infrastructure / data in their services The business agreements, however, vary too much for us to draw a generalised conclusions from them.

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