Throughout its history, vanpooling has been very good to Ann Fandozzi’s company.
For more than 35 years, VPSI Inc. — which is now branded as vRide — has grown and profited from running vanpools for commuters who want an alternative way to negotiate rush-hour traffic. After becoming the company’s CEO this past June, Fandozzi likely could have continued focusing solely on vRide’s vanpooling expertise with no ill effects to the company’s bottom line.
But Fandozzi saw more. She saw vRide’s potential to grow outward from its staple business, with a goal of becoming a comprehensive commuter solutions company. So Fandozzi challenged her company to expand and employ its expertise in new ways.
“My vision, and something that is palatable for us, is really broadening what we do,” Fandozzi says. “There really isn’t any type of commuter solutions company that does what we do, so that made it kind of exciting.
“When you think about it, we are really at an all-time peak of forces coming together, be it congestion in cities, be it gas prices, be it people’s time worth more of a premium than ever before. All of those forces coming together is something that allows us to come in and really offer a unique solution for commuters.”
To make her vision a reality, Fandozzi has needed to develop and implement a methodical approach that helps vRide — which generated $75 million in 2011 revenue — identify its target customers and create new ways to serve them by employing internal resources in the most effective way possible.
“If you have a commute of, say, 45 minutes or longer, you might come to us because of our vanpooling reputation,” she says. “But as we grow, we’ll be able to offer you a multitude of different solutions. We can certainly still put you in a vanpool, but we might also be able to put you in a carpool if you have a smaller group. No matter the service offering, the goal is commuter focus.”
Form a vision
To expand your company into new areas, you need a reachable vision, guidelines for achieving that vision, building blocks that will help you turn the vision into a reality and metrics that will help you measure your performance in relation to the guidelines and building blocks.
“Your vision has to be both broad and targeted,” Fandozzi says. “It has to be broad enough to capture the various value streams that the business model can deliver but focused enough that you’re not trying to be all things to all people.
“When we thought about broadening our company from a vanpool company to a commuter solutions company, our vision was significantly broader, but it was also very targeted from the sense that we are going to go after commuters and focus on solving their needs.”
To formulate an achievable vision for vRide, Fandozzi and her leadership team had to connect with the needs and pain points of current and potential customers. It required vRide’s representatives to gather customer data and conduct market research with an eye toward finding the holes in the marketplace that vRide could capably fill.
“A lot of it really has to do with delving deep into the customer’s world,” Fandozzi says. “In order to know where you want to go, you really have to take a step back and see what needs there are from a customer standpoint, areas that being underserved, and those are where the juiciest opportunities will usually present themselves. You go where the needs exist and where potential customers are being underserved.
“In our case, we’ve been looking at traffic congestion, people who are becoming frustrated with commute times, the state of the economy and gas prices, and people wanting more money in their pockets,” Fandozzi says. “We know those are the pain points, and from there, we dig a little deeper and get a read on whether we can expect those factors to increase or decrease over time.”
With traffic congestion and high gas prices remaining as fixtures of day-to-day life, Fandozzi’s team felt comfortable building a vision around how to address those needs. Then, she moved her company into the implementation phase.
“You don’t need to know every step of the 100 steps you’re going to take to get from here to there, but in general, you need to have a pretty good plan for how that vision can be achieved,” she says. “For us, a big fundamental building block has been the Web and mobile technology.”
Under Fandozzi’s leadership, vRide has taken steps to create a mobile-device app that can give would-be commuters instant access to potential solutions provided by the company.
“It’s the nature of addressing consumers who are on the go,” Fandozzi says. “You need an on-the-go solution. You need to automate instantaneous answers for consumers. For 35 years as a vanpooling company, that is a competency we didn’t have. So then the question becomes, ‘How do you scale to add those competencies?’”
It was a question of whether vRide needed to add new resources and competencies, or find new ways to utilize what was already in-house. Through rounds of organization analysis, Fandozzi’s team realized the company had a great deal of physical infrastructure already constructed, meaning scalability would be a mixture of the old and new.
It was a matter of creating new technology platforms and plugging them into what already existed in terms of vans, people and facilities.
“Currently, we have more than 5,000 vans, and there is a set of solutions that works really well there,” Fandozzi says. “So the question to the leadership team is, how do those get scaled? Anything from the way the vehicles get serviced and delivered, and anything or everything in between. That is why it really becomes a function of having those building blocks and being very honest with your assessment of whether you have them in-house, versus the items you need to bring in.”
Develop a marketing plan
With a vision and implementation plan in place, you need to get potential customers interested in your organization’s new direction. That is where a comprehensive marketing campaign comes in.
Fandozzi divides vRide’s marketing campaign into various phases focused on educating consumers and driving traffic. Once those phases are fully implemented, marketing can become an effective tool to spur further growth.
“You need to develop a phased marketing strategy that is appropriate for where you are in your development cycle,” Fandozzi says. “For us, we are kind of in a heavy learning mode right now, because we are still in the process of putting our fundamental building blocks in place.
“The next phase is once those building blocks are in place, you want to take what you’ve learned and use it to educate consumers. Then, once everything is place, you can expand your marketing efforts as you grow.
“For instance, we could then say that every man and woman in America who commutes more than 45 minutes to work is our target consumer,” Fandozzi says. “But that is a different kind of marketing effort from where we are now.
“The trick is in knowing what phase you are in at that moment but planning for the next one as you are in the current one.”
Developing a successful marketing effort around your vision often requires a combination of developing internal expertise and utilizing outside resources. Your internal marketing experts have an intimate knowledge of your business and your customer base. Third-party marketing firms will bring an outside perspective, along with data gathering and research capabilities that your company may not possess.
However, Fandozzi says external consultants should not drive your marketing philosophy. Though third-party firms bring useful skills and resources to the table, you and your team know your business the best.
“You want the latest and greatest, but you want it centrally managed with internal resources,” Fandozzi says.
“That is why you assign and train a leader who is centrally responsible for your marketing vision, because that is the person who is going to really understand where you’re going as a company, what building blocks are in place and what phase of marketing you’re going to need to be in for each phase of growth — are you in a heavy learning mode, or a heavy execution mode, and so forth.
“Those are the people who will be in charge of bringing in experts along the way to help them execute on each of those facets.”
If you make a misstep in your marketing, learn from it quickly and correct it — and have those systems in place from the outset.
“You’re testing along the way, fully preparing to fail,” Fandozzi says. “One of the things we do here is we like to learn fast-forward. You want to do something quickly and you want to learn from it quickly. Failure is OK if you learn from it, but you want to do it and correct it quickly. You are trying to fast-forward the entire process so that you develop definite answers on what you can move forward with.”
How to reach: vRide, (248) 597-3500 or www.vride.com
The Fandozzi file
More from Fandozzi on self-assessing as a business: There are several modes of self-assessment. One is having some conversations about just looking in the mirror with the leadership team and saying, ‘Hey, this is where we need to go and this is where we are.’ Another is bringing in experts, because sometimes you need a fresh set of eyes since you are just so close to the business, and it’s tough to see. One of the hallmarks of good leadership is knowing when to ask for help, and looking at experts instead of thinking that you have all the answers.
The third method is looking around at adjacent industries and seeing how they’ve been able to solve similar problems, to also free up your thinking. So, you may be stuck, but they’re going to bring in an expert and give you an expert solution along the lines of how you’re already thinking.
Fandozzi on hiring and retaining top talent: That is always the silver bullet to a business, having the right people. It comes from a multitude of sources. First and foremost, it comes from having the right screening techniques in place to make sure that as we’re bringing in people, they’re the right people. There is a lot of ownership on the part of the leader to make sure the vision is exceptionally clear, that people aren’t hunting in the dark and hoping they find the right answer.
There is a lot of personal ownership, for example, in order to develop and work with my people, I overinvest. People tend to underestimate how much investment this takes, but overinvesting on tools, resources — making sure we’ve put the right metrics in place. Then, it’s taking a step back and seeing if they can do it. It’s guaranteed you are going to make mistakes along the way, but you want those mistakes to be smaller-sized, and you want the wins to be bigger, and you want to course-correct as you go.