Six awesome tips to increase margins in your GPS tracking company, without having to make more sales*
1. PROVIDE SIM OR DATA CONNECTIVITY TO YOUR CLIENTS
Are you currently selling SIM or data connectivity to your customers? If not, then you should be! Offering connectivity provides them with more convenience. Even better, it provides you with more control over your support capability, easier mark-up on SIM card sales, and a better margin on the data bundle overall. You can also reconfigure your clients’ devices to report less, while maintaining expectation levels for reporting. Ultimately, this means less data is used. By reporting less and using grouped data deals (rather than capped price SIMs), you will be charged less and improve your margins, while your clients will see no difference. As an example, if you had 1000 units with a saving of $1.50 per month, that would net you almost $20,000 per year. Easy money!
The OEM server device management platform from Digital Matter is a great way to implement this and experience the benefits.
2. UP-SELL TO YOUR CUSTOMERS
Are you up-selling, or just throwing in all the bells and whistles for free? Don’t forget that a client’s perspective is often different to yours. As an example, if your client was a taxi company, you may see adding a free driver ID accessory to their GPS tracker as just a simple piece of configuration. However, the client may see it as a key decision-making function. Now they can hold their drivers accountable as well as recoup fines, improve driving behavior, meet health and safety standards, identify profitable and unprofitable drivers and improve driver fatigue planning and management.
In other words, instead of throwing all the extras in for free, charge for it. In the case of our taxi client, perhaps you could charge $5 per vehicle per month, $200 per month flat fee for the fleet, or $300 for the driver ID hardware as well as an annual fee per vehicle.
The same logic can be applied to the following:
- Duress (SOS) buttons
- Seat belt tracking
- 4wd monitoring
- PTO monitoring
- Secondary run hours
- Service and maintenance modules
All these are adjustable based on your clients need.
3. NEGOTIATE WITH YOUR SUPPLIERS
There is a whole range of discounts or value-add options that you can discuss with your suppliers that can potentially save you a small fortune. Some of these include:
- Asking for discounts – we all know that if you don’t ask, you don’t get
- Asking for improved tariffs based on your potential sales (e.g. you have 200 SIMs now but ask for pricing based on 1k+ SIMs. )
- Negotiating a rebate on orders placed if you reach a target in a given time (i.e. 500 units by the end of the year)
- Asking for a deal on bundled accessories with device orders. Accessories and peripherals generally have better margins than the more competitive devices. Cheaper hardware, and you can keep the accessories in stock for another sale
- Bulk ordering to get better pricing
- Asking for longer terms or split deliveries with invoicing per delivery, giving you more time to sell at a lower cost price with a higher margin
Cut out the middleman and pocket the install money yourself. Your time will be cheaper than an installer (especially if the client brings the vehicle to you). If not technical, simply do OBD installs.
5. REMOVE SLOW-MOVING STOCK
Ask your supplier what stock they have that is slow-moving and whether they would be happy to discount back. We all have slow movers. Perhaps with some concerted effort you could live this slow-moving stock.
6.FOLLOW-UP WITH PAST AND EXISTING CLIENTS
Follow-up with former and current clients to see if they want new features (at a fee, of course). Try offering them 50% for a given period as an offer, or perhaps activate some of the features for a seven day trial for free – if they like them, they may ask you to bill them.