First, let’s be clear on who we are. Of the 8,305 limo operators, more than half of this industry is made up of operators running less than 10 vehicles. So from a “head count” stand point, about 4,600 are small companies grossing under $500,000 per year.
At an industry average net profitability, 55% of the total universe is ending their year with $50,000 to $75,000 on the books. With 32% of all operators falling in the “medium” category (11-50 vehicles), that means about 2,700 operators who are grossing an average $3.5 million for a year-end net of $600,000, while the 13th upper percentile represents a total of about 1,080 operators who in that 50-plus fleet size and gross more than $10 million. [Note: The above percentages reflect the proportions of respondents to the statistically valid operator survey; raw numbers of operators in each category are based on figures from List Strategies Inc.].
Importantly then, most LCT readers have unique concerns compared to the minority group. Most operators in the 1-10 fleet space are looking to grow. Year over year, about three quarters reported gross revenues of $300,000 or less.
They are interested in education in terms of finding ways to make and save money by learning from seasoned operators. They rely more on retail work and may be feeling the sting from the TNCs more than the rest for now. Most purchasing power goes to the elite few operators. Collectively, this small body of industry owners makes up 12 times the volume of runs per month compared to the rest of the industry and controls most of the corporate business as opposed to retail. They are more concerned about HR issues including chauffeur retention, insurance hikes, and wage/overtime.
On the technology front, with 90% of the industry still leaning primarily on phone reservations, we are seriously behind car booking trends and need to pick up the pace with mobile technology. Social media is another area we need to improve, since most operators are only maintaining their Facebook pages every few days.
What’s more, we need a better understanding of the do’s and don’ts of social media branding and referral/lead harvesting.
Here are a few facts to back the case for making social media strategies a major priority:
- Consumers are 71% more likely to make a purchase based on social media referrals (Hubspot).
- Out of 53% of consumers who said they use Twitter to recommend companies or products in their Tweets, 48% bought that product or service (SproutSocial).
- Twitter is the #1 online channel for influencing purchasing decisions surrounding electronics (Mashable).
- 15.1 million consumers go to social media channels before making purchase decisions (Knowledge Networks).
- 74% of consumers rely on social networks to guide purchase decisions (SproutSocial)
- Facebook is the most effective platform to get consumers talking about products (SproutSocial).
- 79% of consumers like a Facebook company page because it offers discounts and incentives (Forbes).
- 81% of U.S. respondents indicated that friends’ social media posts directly influenced their purchase decision (Forbes).
- 78% of respondents said that companies’ social media posts impact their purchases (Forbes).
- 70% of active online adult social networkers shop online; 12% more likely than the average adult Internet user (Nielsen).
- 44% of social media savvy women said their trusted/favorite blogger influences their purchasing decision (Business2Community).
As I said in my March State of the Industry presentation at the International LCT Show in Las Vegas, consumer spending on luxury transportation is up this year. Weekend work, incentive travel, meetings/groups and airport runs are all strong.
Please be sure to read through the 2015 LCT Fact Book carefully. In fact, keep it on your desk all year. It’s not only filled with great insight from a statistical point of view. It serves as a buyers’ guide and resource book with verified vendors and suppliers for quick and easy access.