Managing the Financial Side of Commercial Fleets

Mike Albert Celebrates 60th Anniversary

February 2018, by Mike Antich - Also by this author

Mike Albert Fleet Solutions offers a comprehensive suite of fleet management solutions and operates on a national basis with vehicles on lease in all 50 states, plus Puerto Rico and Canada. Photo: Mike Albert Fleet Solutions
Mike Albert Fleet Solutions offers a comprehensive suite of fleet management solutions and operates on a national basis with vehicles on lease in all 50 states, plus Puerto Rico and Canada. Photo: Mike Albert Fleet Solutions

Sixty years ago, Mike Albert Fleet Solutions began as, and continues to be, a family-owned and operated business.

The name Mike Albert goes back a long way in the automobile business history of Cincinnati, Ohio, where the company was founded. Mike Albert pioneered the used-car business in Cincinnati. In 1928, Mike Albert established a used-car dealership on Gilbert Avenue in Cincinnati. In those days, automobile needs were pretty basic, and the local market offered Mike Albert enough opportunity to succeed.

The business operated at the Gilbert Avenue location until 1941 when the company moved to 712 Reading Road. The company operated as a sole proprietorship until 1945 when Mike Albert Autos was incorporated. Bob Betagole, currently chairman of the board for Mike Albert Fleet Solutions, joined his uncle’s company in 1949. Betagole served as president until 2000, when his daughter Marty Betagole succeeded him.

Bob Betagole
Bob Betagole

In 1952, Mike Albert went into semi-retirement. That same year, Ray Nathan, who was later to become treasurer of the company, joined the firm. Nathan was Bob Betagole’s uncle, his mother’s brother.

With the post-war boom still on, the used-car business continued to grow. Two additional locations were opened. The post-war demand for used vehicles permitted Mike Albert to relocate to a larger lot, and then to add two more locations. By 1955, Mike Albert Autos, Inc. led the city in the sale of used cars.

Late in 1956, the company explored other ways to expand the business. Automobile leasing was in its infancy and adopting this new concept of automobile use seemed the appropriate method to help the corporation grow. The plan was for all vehicles returned from lease to be sold through Mike Albert Autos, Inc.

In January 1957, Bob Betagole leased the first automobile to a friend whose family owned a jewelry business. “They had a small chain of stores that used three cars for the executives of the company. We leased them their first car and over the next several years, we increased it to 20 leased vehicles for use by their executives,” said Betagole.

The average fleet vehicle in 1957 cost a little over $2,000. “In the early days, we leased to lawyers, doctors, and acquaintances. It was a full-service lease. Back then, cars had snow tires during the winter months in the Midwestern states. As part of our full-service arrangement, we would take the snow tires off in the spring, store them, and put them back on again in the fall,” said Betagole.

Mike Albert’s first true fleet account, Evans Grocery, was also signed as a client later in 1957. Evans Grocery was located in Gallipolis, Ohio, which is 100 miles from Cincinnati. At that time, Evans Grocery leased six 1957 Ford station wagons. Eventually, Evans Grocery branched into the restaurant business and operated under the name of Bob Evans Restaurants.

Marty Betagole
Marty Betagole

A new corporation, Mike Albert Leasing, Inc., was formed in November 1958. When Mike Albert Leasing incorporated, they divided the business, with one-third to Nathan, one-third to Albert, and one-third to Betagole.

A new location dedicated to leasing sales and service was opened on Florence Avenue in Cincinnati. The leasing company operated at that location until 1961 when growth forced another move to a new larger location at 2300 Reading Road, where the business remained for the next 11 years. The Reading Road location included 10,000 square feet of building space on one acre of land.

The business continued to grow, and in the summer of 1972, Mike Albert Leasing moved to its present location on Evendale Drive, converting a 25,000-square-foot truck terminal on six-and-a-half acres of land into a major sales, leasing, and service facility. When the company moved to Evendale, it had approximately 35 employees and 800 cars.

Because of the company’s focus on providing high-touch customer service, it ramped up its hiring. “We’ve always been heavy in terms of personnel,” said Betagole. “We always reinvested in the company. We wanted to have sufficient people to provide the customer service we wanted for our customers. And, we saw the value in automation in helping to grow the business.”

Mike Albert survived the two gasoline crises in 1973 and 1979, but was impacted in 1980 when interest rates escalated to a historic high of 20%.

“We never had a bad year,” said Betagole. “Some years were simply better than other years. By being flexible and innovative, Mike Albert has been able to survive, while others have not been as fortunate.”

Hardesty
Hardesty

In the early days, it was a struggle to buy vehicles to lease since the auto industry was still transitioning from a wartime to peacetime economy and there was still huge pent-up demand that dealers could sell all the vehicles they could get. Lease companies were viewed by dealers as competitors for scarce automobiles whose demand exceeded supply. At the time, dealers were opposed to the auto manufacturers supplying vehicles to lessors. This was a key reason why Betagole became a new-vehicle dealer, in order to secure access to auto supply. Today, the Betagole family owns seven dealerships in the Cincinnati and Dayton, Ohio, markets – two Acura dealers, three Hyundai dealers, one Kia dealer, and one Honda dealership.

In the early years of vehicle leasing, banks were hesitant to finance leases, because of losses they incurred from funding early leasing companies, who often used leases as a way to finance buyers who did not have a credit rating to qualify for an auto loan.

This was also before there was residual value GAP (guaranteed auto protection) insurance. Since closed-end leasing was the norm in the early years of the business, when a lease company incorrectly calculated the residual value, some lessors declared bankruptcy leaving the banks with a loss.

“Mike Albert continues to be a leader in offering closed-end leases. Mike Albert has a long history of specializing in closed-end leases and today has the largest portfolio of closed-end leases in the fleet industry. But, in recent years, 65-70% of our leases are now open-end leases. We’ve gotten into the service industry, which primarily operates vans, and those types of vehicles don’t lend themselves to closed-end leasing,” said Mike Hardesty, vice president, strategic alliances for Mike Albert Fleet Solutions. “Although open-end leases have grown, we still continue to specialize in closed-end leases and view ourselves as the market leader.”

Mike Albert’s focus is on small- to medium-sized fleets. “Although we have larger clients, our primary prospect today has between 30-300 vehicles. They probably own their fleet. They are a growing company and want assistance in managing their expanding fleet of vehicles,” said Hardesty.

During Mike Albert’s formative years it did not seek to become a national company. “It was accidental that we evolved into a national company. As former clients moved to other companies in different regions they approached us about leasing their vehicles,” said Hardesty. “This is how we started to grow outside our local area.”

One area of strength at Mike Albert Fleet Solutions is with its strategic alliances extended through franchise programs.

Ownership and Management

A key company milestone occurred when Betagole’s children started working in the family business. His daughter and oldest child, Marty, began her career at Mike Albert in 1977 and became president in 2000.

John Betagole
John Betagole

As president, Marty focused on IT and sales. One of her other accomplishments as president was creating a board of advisors for Mike Albert Leasing.

“Creating the board of advisors, created the recognition that if we were to grow, we had to move to a professionally managed company,” said Marty. “We’ve made great strides in becoming a professionally managed company, which is positioning us for future growth.”

Marty focused on introducing new services to Mike Albert Fleet Solutions. Out of this arose Mike Albert Advantage, which allows companies to outsource to Mike Albert all aspects of fleet management. “If you have fewer than 500 vehicles, why would you want to have a full-time employee managing them?” said Marty.

Today, Mike Albert offers open- and closed-end leases, purchase-leaseback options, and a comprehensive list of fleet management services all tailored to help their customers’ businesses maximize cash flow, lower total cost of ownership, increase productivity and build brand awareness.

Mike Albert has also branched off into the upfitting business as a new revenue channel.

Another area of pride for Marty was being an early proponent of electric vehicles.
A newer service offered by Mike Albert is strategic consulting, which was introduced eight years ago. “We have introduced strategic consulting, so clients are not addressing fleet issues reactively but proactively,” added Hardesty.

In addition to its dealership division, the company operates Mike Albert Resale Center, which today is known as Mike Albert Direct.

When Bob Betagole’s second oldest child, John Betagole, joined the company, he first learned the leasing business and later became national sales manager. John eventually took over responsibility of the family’s dealership business as company vice president. Ultimately, he was named  president of the Superior Auto Group, owned by the Betagole family. In 2015, Superior Auto Group expanded outside of Cincinnati and purchased two dealerships in Dayton, OH.

Richard Betagole
Richard Betagole

Betagole’s third child, Richard Betagole also joined the company eventually serving as vice president with multiple operational responsibilities, such as purchasing, manufacturer liaison, and representing the company  at industry events. Earlier, he served on the board of directors for the American Automotive Leasing Association (AALA). Richard’s other non-leasing responsibilities include managing the family’s other investments, as well as working with dealerships.

The family grew up in the business and as the business grew they divided  responsibilities with Marty managing leasing, John managing dealerships, and Richard focusing on other family investments. “All are still active in the leasing business and work together,” said Betagole.

First Non-Family President

Until December 2016, the post of president was always held by a member of the Betagole family. However, in an effort to accelerate growth, the family hired Jeff Hart as president to bring a fresh perspective to the company. Marty Betagole became the company’s CEO.

Prior to joining Mike Albert Fleet Solutions, Hart was the CEO of OneCommand, a marketing and loyalty solution company serving the automotive industry and spent the last 20 years in the venture capital world turning around two companies and leading them through accelerated growth.

One focus of Hart is the elimination of silos within the organization and focusing on a “One Mike Albert” philosophy by aligning everyone to a common goal. The focus is aligning everyone around the client and designing operations to enhance the relationship while accelerating investments in technology.

Hart
Hart

Another of Hart’s early decisions was to expand the Mike Albert sales force. Hart’s goal is to more than double the sales staff by 2019. Mike Albert has expanded its sales representation into Florida, Georgia, Pennsylvania, South Carolina, North Carolina,  Rhode Island, and Washington D.C. It is looking to hire sales managers in Arizona and Colorado.

One of the newest members of the Mike Albert Fleet Solutions leadership team is Ted Cain, executive vice president of sales. He joined the company June 1, 2017.

Cain was familiar with Mike Albert prior to joining the company when he worked in the dealership business. “They had a good reputation of being a family-owned company that takes care of its clients and works with them as a business partner,” said Cain.

Technology will play a crucial role in the future growth of Mike Albert.

“We see a very strong need to continue our investment in technology. The technology investments will be made to enhance our data warehouse and analytical tools while also optimizing our services,” said Cain. “Our clients don’t have time to understand all the complexities of managing and optimizing a fleet. They turn to Mike Albert for the insights, optimization, and management of those aspects of their business. No matter if you have a couple vehicles or 2,000, our clients are looking to us for that expertise.”

Cain
Cain

In terms of market segments, Cain says the company’s value proposition is fairly flexible. “Mike Albert works with clients where fleet is core to the success of their business and proactive insights and a deeper partnership are needed, but we also engage clients who simply need help with tactical areas like maintenance,” said Cain. “Markets can range from sales organizations to landscapers to HVAC contractors to municipalities and beyond.”

As sales manager, Cain has an aggressive three-year growth goal for new units leased. “There’s a lot of business out there. We can easily double our units in operation,” said Cain. “We’re very good at what we do and we haven’t reached our potential yet. There is lot of opportunity for growth.”

(L-R) John Betagole, Marty Betagole, Bob Betagole, and Richard Betagole. Jeff Hart (far right) became the first non-family member to become president of the company. Photo: Mike Albert Fleet Solutions
(L-R) John Betagole, Marty Betagole, Bob Betagole, and Richard Betagole. Jeff Hart (far right) became the first non-family member to become president of the company. Photo: Mike Albert Fleet Solutions

One of the areas that Mike Albert prides itself is its truck engineering group. With its increased truck business, Mike Albert has increased the size of the truck group with experienced truck engineers. “Our truck engineering group is a game changer for us,” said Cain.

According to Cain, approximately 60% of the Mike Albert portfolio is comprised of trucks and vans.

Another area of growing strength has been with client retention, which has increased 30 to 40% under the leadership of Terri Wallace, vice president of client relations.

Mike Albert Pioneered Innovations to Fleet Leasing

Mike Albert Fleet Solutions trailblazed many new areas of the fleet leasing industry.

  • Small Cars: One of its pioneering initiatives was the shift to smaller cars. An example of a “small” car of the era was the Oldsmobile Cutlass, which, by today’s standards was huge. “Some of our customers initially resisted it, saying it was too small,” said Bob Betagole, chairman of the board of Mike Albert Fleet Solutions.
  • Import-Badged Vehicles: Another area that Mike Albert pioneered was the introduction of import-badged vehicles to its customer base. “We had resistance to offering the Toyota Camry, but customers grew to like it because we were able to offer it at a good price because of its high resale value,” said Betagole.
  • High-Mileage Vehicle Leases: One innovation that Mike Albert pioneered was high-mileage vehicle leases. “We were one of the first to offer high-mileage cars. We began offering unlimited mileage contracts. We had cars running up to 70-80,000 miles,” said Betagole. At that time, it was uncommon for cars to be in service beyond 60,000 miles. “Cars were better than they were given credit,” added Betagole.

“We have some companies that have been with us for over 30 years,” said Wallace, who joined Mike Albert six years ago following a 23-year career with American Express. Wallace is responsible for all teams who touch the customer directly, which includes the customer service team and client relations team, which cumulatively is comprised of approximately 30 individuals. This department has experienced tremendous growth since the time Wallace joined the company, which at that time had five client development managers.

Wallace
Wallace

One new project Mike Albert Fleet Solutions is very excited about is its recently introduced program called Express, which is a dedicated team solely focused on smaller clients and their specific needs. “Some of the exciting changes here included moving to a single contact for all our clients fleet needs, faster credit approval, and electronic signature to speed processing,” said Hart.

Today, Mike Albert Fleet Solutions has a comprehensive suite of fleet management solutions and operates on a national basis with vehicles on lease in all 50 states, plus Puerto Rico and Canada.

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