Why Service Providers Charge Monthly Fees For Tracking Services28 Feb 2010
We recently had a few calls from potential customers, telling us, how one provider was selling a GPS Tracking device for $149.00 with no monthly fees and 20 on demand locates per month. Wow! That seems like an amazing deal! But is it? There are a few things, that I would definitely check on. Maybe we weren’t getting the whole story, who knows. Here are our thoughts on this matter…
The first, would be reliability, both from a service perspective and customer service view. Most every GPS tracking device that tracks live or in real-time via a web based system, uses some sort of wireless transport method to get the position data back to the server. GSM or SIM cards inserted into these devices are what most gps providers use, as they are the most affordable. These SIM cards must be activated thourgh a carrier, like ATT who provides the wireless data link between device and server. With this there is a monthly charge that ATT charges the GPS provider.
Another associated cost, would be server and internet connection cost for the GPS provider. All of these things cost money – don’t forget the electricity to run these machines!
What about Customer Support? Having employees who are capable and able to handle issues that arise from a technical standpoint to just running an effective business in general all have costs, like wages, worker’s comp., etc. Don’t forget the business these employees work also have associated costs, toll free phone lines, insurance, etc.
Another thing – running licensed maps is expensive! You know the maps you see from providers like Google and Microsoft. You just can’t take those maps and use them without paying for them. If a map service provider finds a gps company using maps without paying for it…Watch out below!
The point here being, if you get your gps tracking devices from somewhere that your costs are about $30 per device, have a single server connected to a $50 a month dsl connection run out of your home, with e-mail and none or limited phone support, and unlicensed maps – you may get away with selling a device for $150 and not charging your customer a monthly service fee. Ultimately, though at some point, your costs, will start exceeding the revenue your bringing in. We all know what happens at this point!
Over the last 5 years, we have seen countless GPS service providers come and go. We even get calls from companies looking for a new GPS provider, because their current ones went under.
With all that being said – I would say, “Buyer Beware”, if the deal seems to good to be true, many times it is.
I would also suggest this model for any current or future GPS providers reading this post:
Provide Your Customers Exceptional Service, devices that are proven to work, albeit not the cheapest – yet not the most expensive. Give your customers value, but don’t take more from them in cash that you give back in use - we all know where the big fat piggies go! All the while, operate with integrity, treat your customer as you would want to be treated, and never settle for good enough. This is what we strive for daily at LiveViewGPS, Inc.