Security firms cope with rising gas prices

When gas prices spiked across the country during the summer of 2008, many security companies were caught off guard and scrambled to find solutions that would help them conserve fuel. Indeed, companies were forced to pass these increased fuel costs onto their customers and others even contemplated eliminating some services due to the pain they were feeling at the pump.

This time around, with prices hovering near $4 per gallon and expected to rise, dealers and guard service providers are taking the lessons they learned three years ago to minimize the impact of fuel costs on their businesses.

When gas prices started to creep above $3 per gallon earlier this year, Patrick Egan, president of Select Security, a Pennsylvania-based provider of commercial and residential security systems, said his company raised their trip charge by $10, rather than implement a fuel surcharge as they had done in the past.

"It's the 80/20 rule," he explained. "Eighty percent of people pay it and they understand it and 20 percent of people would call and complain and we would waive it. But, it generated a significant amount of income to offset the fuel costs."

Egan said that it is easier to increase the trip charge than try to explain to customers why they are being asked to pay for a fuel surcharge.

"Rather than having a separate line item that they can pick up say 'why am I getting a trip charge for $59 and a fuel surcharge of $10?' Now we've just taken the $59 and made it $69 and it has not created the phone calls that the separate line item fuel charge did a few years ago, so we think we're on to something," he said.

Two years ago, Egan said that Select Security stopped doing installations on Fridays and switched to four, 10-hour days in which their full-size installations vans were on the roads, which has also helped reduced the company's fuel consumption. The company also has a complete automation system that allows them to see where their technicians are at all times.

In addition, Select Security purchased a dozen Chevrolet HHRs a couple years back for their inspectors and service techs. Though they get between 28 and 30 miles per gallon, Egan said that the HHRs are not big enough for certain service technicians and the company has subsequently ordered five, fuel efficient Ford Transit vehicles.

The company also entered into a contract with Enterprise Fleet Management, which Egan says will help them save on fuel on maintenance costs. Though the Enterprise contract, the company has been issued Wright Express gas cards, which provide the company with an immediate discount off the pump price.

"We are constantly looking at and monitoring our fuel consumption," Egan said.

Another Pennsylvania-based company that is using lessons learned from the 2008 gas spike to help it keep current fuel costs down is Vector Security. Vector, which installs electronic security systems and also provides uniformed guard services, starting using a GPS-based fleet management system in 2008 called FAS-Trak.

The company implemented the system to accomplish a variety of ROI goals including; wage and overtime savings; increase vehicle productivity; eliminate unauthorized vehicle use; reduce vehicle operating costs; reduce insurance deductible payment costs; reduce vehicle "down" days; reduce fuel and oil costs; reduce fleet administrative costs; and, increase employee productivity.

"Service vehicles are either profit or loss centers. You've got to make certain that if you're going to be providing service to customers that you keep your price levels within a reasonable (range)," said Dave Merrick, vice president of marketing for Vector Security. "People go and they begin charging $25 per service call, gas increase charges and things like that and it doesn't take a long time for people to do one of two things; either not service their alarm systems or just say 'this is too expensive for me' and just cancel the service in general."

What's unique about the FAS-Trak system, according to Chuck Gerginski, FAS-Trak services consultant for Vector, is that it provides analytics for fleet managers to see why a vehicle or technician is not as productive as it should be.

"Essentially, FAS-Trak is a management tool to allow you to have the information you need to really wrap your arms around your fleet and get a true snapshot of what's happening once those vehicles leave the lot each day," Gerginski said. "In my experience, once the fleet owner has the ability to do that, he is surprised by a lot of what he sees. Sometimes he sees things he really wished he hadn't, but it really gives him the information as if he was in the passenger's seat of each one of those vehicles."

Merrick said one thing the company found almost immediately when they implemented the system in their vehicles were technicians that were running their vehicles at sites under construction to stay cool during the summer months. They also found employees using vehicles to run personal errands.

While FAS-Trak has been useful in helping the company identify waste by employees, it has also allowed them to route technicians more efficiently for service calls.

"Within (FAS-Trak), we contain information on who the (vehicle) operator is, what his experience is, what his truck has and everything like that so we know the best truck to send in relation to getting the job done," Merrick explained. "You have to make sure you're not sending your residential-geared technician to service a commercial access control system."

The system has also allowed the company to make sure its' guards are doing tours when and where they're supposed to and that vehicles are not running needlessly. Though some employees have been put off by the implementation of FAS-Trak, Gerginski says the goal of the system is not to spy on techs or guards going about their duties, but to make sure the company's manages its fleet effectively.

"The way that Vector employed the system was totally transparent," Gerginski said. "The drivers knew and were told why this was being done and it was not being done as a punishment, it's not being done to find people doing things wrong, it was done to be as efficient and productive as we could be. That's really what the intent of FAS-Trak is, it's not to be a Big Brother, it's really to allow an organization to be as efficient and productive and profitable as it can be by allowing a management team or individual to have total access to the vehicles and what they're doing each day."

Clarion Security, a Memphis, Tenn.-based guard services firm founded last year by Kim Heathcott, has managed to keep their fuel costs to a minimum by having their employees use a fleet of Toyota Prius hybrid vehicles.

Larry Heathcott, who serves as the company's president, said that one reason customers come to Clarion Security is because they know the company is energy conscious.

"One thing that we feel is critical to the success of the business and the success of the officers is checking on them. So one of things we do to check on the officers is to send a supervisor," he said. "Every shift, every post is seen by a supervisor, every single shift, period. One of the things we do when we approach the officer is we provide a meal to them at no cost because we know they can't get away."

Compared to other guard firms that use pickup trucks, which get between 10 and 12 miles per gallon, the Prius' used by Clarion get between 45 and 50 per gallon.

"They have those pickup trucks for one reason and that main reason is they look macho," he explained. "They want to look tough. They all drive trucks or big Impalas around because they are a bunch of want to be cops in some situations. We want to look like we are environmentally conscious and we are cutting edge."

Kim Heathcott, the company's CEO, said that using the hybrids also keeps the company from passing on a fuel surcharge to their customers.

"We made the commitment that we absolutely have to have the supervisors out there supporting our people in their positions and I think that makes us much more cost effective," she said.

Clarion's guards also carry a GPS-enabled smartphone that allows the company to know where they are at all times.

Larry Heathcott said that he's also looking into electric and hybrid vehicles from other auto manufacturers as well.

"We just don't see the need to have all gas vehicles," he said. "If I could get a fleet of Nissan Leafs right now, I would be all over it."


 

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