The traditional landscape of sales has been undeniably reshaped, particularly with the dramatic reduction in face-to-face interactions due to recent global events. For many sectors, the conventional methods of nurturing client relationships – from casual lunches to office drop-ins for updates – have been significantly disrupted. This shift has placed considerable pressure on field sales representatives accustomed to these in-person strategies, forcing businesses to reconsider the long-standing reliance on company cars for their sales teams.
While the value of personal connections in sales remains strong, the past year has demonstrated the viability of virtual sales models. As remote and hybrid work arrangements become increasingly prevalent, the future of the company car is being seriously questioned. Is this long-held perk becoming obsolete, or does it still hold relevance in today’s evolving business environment?
The Rise of Virtual Sales Strategies
Historically, industries like pharmaceuticals have heavily depended on company cars to facilitate their in-person sales approach. However, the rapid pivot to virtual selling has surprisingly amplified communication between sales representatives and healthcare professionals. An Accenture survey from May 2020 revealed that 61% of physicians reported increased interaction with sales reps during the pandemic compared to pre-pandemic levels.
Virtual meetings present a mixed bag of advantages and disadvantages. On one hand, they broaden a sales rep’s reach beyond geographical limitations and optimize time efficiency by minimizing wait times for appointments. This allows both reps and clients to manage their schedules more effectively. Conversely, digital meetings can be prone to distractions, potentially diminishing engagement and the depth of interaction.
Despite these drawbacks, decision-makers are showing a preference for virtual engagement. The same Accenture survey indicated that a significant 87% of healthcare providers in the pharmaceutical industry favor either a fully virtual or hybrid engagement model even after the pandemic subsides. This preference further fuels the debate: Is the era of the company car drawing to a close?
Company Cars: Far From Extinct for Sales Teams
The notion of completely phasing out company cars is unlikely, as these vehicles remain a dynamic component of business fleets. While their specific role may adapt over time, historical trends suggest they will continue to be a part of the business landscape.
Consider businesses where company cars serve as employee perks or sales teams transitioning to virtual sales methods. This segment of fleet usage might indeed contract, echoing the fleet reductions observed during the 2008 recession. During that period, many vehicles deemed non-essential were removed from fleets. However, as the economy recovered, company cars re-emerged as a crucial tool for talent retention. Providing a company car to a sales representative became a key strategy for not only retaining valuable employees but also for maintaining their engagement and motivation, ultimately driving job performance. This pattern is expected to repeat, with a resurgence of company cars following the recent pandemic-induced slowdown. Business owners and fleet managers should draw lessons from the post-2008 recovery when planning future fleet strategies.
Conversely, for businesses where vehicles are integral to operations, such as on-site estimations in the construction sector, fleets will likely remain essential. The inherent value – and often necessity – of in-person sales tactics should not be overlooked as companies implement return-to-office strategies.
A Tailored Approach to Company Cars for Sales Roles
Business owners and fleet managers must carefully evaluate both internal and external factors when deciding on their company car fleet, as needs will vary across industries and individual businesses.
Maintaining a unified company fleet offers several key advantages:
- Enhanced Sales Team Productivity: Company cars remove the burden of mileage, vehicle wear and tear, and personal insurance costs from sales representatives, encouraging them to actively engage with prospects and clients.
- Strengthened Corporate Branding: Company vehicles act as mobile branding assets. Consistent vehicle types and visual branding reinforce brand image and reputation. For example, environmentally conscious companies might opt for hybrid or electric vehicles for their sales staff, directly provided by the company.
- Attractive Hiring Incentive and Retention Tool: In a competitive labor market, company cars can be a powerful tool for attracting and retaining talented sales professionals.
Conversely, allowing employees to use personal vehicles for business purposes presents certain disadvantages:
- Inconsistent Brand Image: While offering allowances or mileage reimbursement may seem cost-effective, businesses lose control over the vehicles their sales reps use. A representative arriving at a client meeting in an older, poorly maintained car can negatively impact the company’s image.
- Reduced Motivation for In-Person Sales: Sales teams might be less inclined to travel for in-person meetings due to concerns about mileage, vehicle wear, or even embarrassment about their personal vehicle.
- Uncertainty in Safety and Reliability: Personal vehicles may lack adequate maintenance or up-to-date safety features, potentially leading to breakdowns or accidents, increasing the company’s liability risks for on-the-job incidents.
While the reliance on traditional company cars may fluctuate across different businesses, the recent shift towards virtual operations is undeniably influencing fleet management strategies. Businesses should conduct a thorough financial and cost-benefit analysis to determine the optimal approach – whether it’s maintaining their current fleet, transitioning to employee-owned vehicles with reimbursements, or downsizing their fleet in line with virtual sales strategies.
Partnering with experienced fleet management specialists, such as The Bancorp, can provide valuable support to business owners and fleet managers as they navigate the evolving role of company cars and the broader future of their business operations.
