Quartix: ‘Three-year telematics contracts are nuts’

Quartix MD Andy Walters (pictured) explains his approach to payment plans and flexible telematics contracts. 

Telematics has been around for a quarter of a century, yet despite the obvious benefits, experts estimate that just one-third of the vans operated by fleets in the UK have a system installed, with a far lower proportion for company cars.

It equates to around 550,000 of the 1.7 million company vans.

Many of the early adopters simply wanted to know where their vehicles were and whether they could save fuel by travelling fewer miles or by preventing employee fraud.

Today, more often than not, telematics is being adopted to address driver behaviour from a safety and risk management perspective, according to one of the UK’s leading suppliers Quartix.

With 78,000 fleet vehicles under subscription in the UK (and almost 100,000 globally), Quartix has a market share of around 13% and is seeing a rapid acceleration in growth. 

Installations have risen five-fold since 2010, with a 44% rise in the first half of this year alone. It is consistently carrying out more than 2,000 new installs per month in fleet (with another 5,000-6,000 in the private insurance market).

Managing director Andy Walters co-founded Quartix in 2001.

He believes small- and medium-sized enterprise (SME) fleets are still wedded to the vehicle location and utilisation elements of telematics but most other companies are now embracing the broader data-set to tackle incidents and efficiency, both related to driver behaviour.

“Risk management is where our focus is now,” he says.

Walters “re-set” the business at the start of the year, recruiting Ed Ralph as chief operating officer and Lynne Austin as director of UK fleet operations.

The appointments signalled his intention to put fleet back at the core of the business.

“The insurance business has taken up a lot of our time and I was having to be a jack of all trades,” he says. “The two appointments mean we are now refocused on fleet.”

Walters has also accelerated product development, improving both the real-time dashboard and fuel card integration via a partnership with FleetCheck.

He is working on an API (application programming interface which opens up the operating system) to enable customers to pull data from Quartix telematics into their other IT systems for full integration.  

The investment is increasing the conversion ratios, with the majority of business wins first-time telematics users.

“It is still the case that two-thirds are customers that were without tracking, but there are also the ones leaving a tracking provider to come to us and even those who are coming back,” he says. 

As fleet priorities shift towards driver safety, Quartix has devised a new approach to tackling speed-related risk, which looks beyond the conventional view that the regular speeders present the gravest danger.

It has created a safe speed database with stats from all its 180,000 vehicles (fleet and private) pegged to the speed limit.

But the driving style score isn’t measured against the speed limit; it’s measured against the speed of other road users.

“Even if the speed limit is 60mph, our distributions might reveal that the average speed is 45mph,” Walters explains.

“Our figures show that the upper 95 percentage above the average driver speed are 20 times more likely to be involved in an accident, despite still being beneath the actual speed limit. It’s a different way of looking at risk based on the true safe driving speed, and fleets are starting to use it more.”

Such innovative thinking is where Quartix claims its differentiation with rival telematics suppliers.

Walters also points to its payment plans – Quartix was the trailblazer in flexible pay-for-use agreements with no contracts, and often provides a system rent-free for the first three months to encourage uptake.

“We have always pushed the flexibility of our contracts, with open and transparent pricing on our website,” Walters says.

“They are there for everyone to see, including our competitors. That was unusual in 2001 and it’s unusual today.”

He has strong words for the actions of some rivals who “quote on the basis of what they think they can get away with”, adding: “And then they also go for three- or five-year terms, which is nuts. We always run on a 12-month contract, which they can cancel on 30 days’ notice.

"It means we have to be good at customer service.”

Quartix introduced the no-commitment flexible contact in 2008 and it helped to double its conversion rates.

Fleets – people in general – are more willing to take a ‘risk’ with a new supplier, product or service if they know they can back out at a moment’s notice.

The greatest unknown when signing a contract is always customer service: companies talk the talk, but they don’t always walk it.

“Customer service is always an unknown quantity for a new customer; it’s hard to show during the sales process. People often don’t appreciate it until they go somewhere else,” says Walters.

“We’ve had quite a few fleets this year that have come back to us after leaving for a competitor on price.”

Service isn’t always the obvious things, either. Walters cites the many phone calls Quartix receives from anxious customers who have left the telematics system installed in cars that have gone to auction. 

“They ask ‘can we go and get it?’, and we always do,” he says.

Van fleets remain the major impetus behind the growth in telematics sales; they account for 70-80% of Quartix’s business.

Cars tend to be added to an existing van contract; few fleets lead a telematics policy with them. 

Its customer base ranges from companies with two or three vehicles to those running hundreds. SMEs and owner-drivers are a surprisingly big part of its business, helped by the concise, digestible reports generated. 

Their needs are less complex, typically about understanding capacity, utilisation and vehicle location.

In contrast, larger fleets require greater sophistication with in-depth data to enable them to tackle efficiency and accidents through driver behaviour and risk management.

“We can help them with exception reporting by providing leader-boards and league tables rather than them having to sift through all the data,” says COO Ed Ralph.

“We can also provide guidance to fleets if they have vehicles in the red zone.”

The next step for telematics is in self-install products. Quartix launched its on-board diagnostics (OBD) system in May and is the process of rolling it out. The driver simply plugs the unit into the OBD port.

Walters predicts self-install systems could account for 20% of his fleet volume in the coming years due to its simplicity of use and the fact that nothing is hard-wired.

He believes they are preferable to mobile phone apps – which Quartix offers to customers free of charge – due to the drain on the battery from continuously running GPS.

“This will broaden the way we can get data into our platform,” he says. “It also changes our proposition from being a black box provider to being a provider of a solution.”