Industry Research

Limo Industry Must Work Together, Raise Standards

Posted on April 24, 2012 by Sara Eastwood-McLean - Also by this author

Our Show themes aren’t random. This was something we thought up last spring after I had a provocative chat with a smart guy named Dr. Jim Taylor. He runs a consulting firm in Connecticut that studies the buying trends of the affluent. He travels in chauffeured cars all the time and uses them for his clients. He also was our guest speaker at the LCT Leadership Summit in Miami Beach in September 2011.

I asked him, “What do the rich think of our industry? Why is pricing such an issue?” He said it’s really simple. “You are a fragmented group. Your values are not organized. Your methodologies are inconsistent from market to market. Therefore confidence and respect from the affluent market is not as high as it could be. It’s hurting your pricing structures because people are confused about what they get for the money. Service levels for the price are all over the place.” Change that and help the end user buy services with the confidence that they REALLY WILL get what they expect, and you improve your levels of pricing.

In a highly entrepreneurial mindset such as ours, working together for the common good is a hard sell to be sure, but it is do-able and it is necessary! For those of you who attend networking functions such as the Summit, participate in private 20 Groups, work for your local associations, or serve on NLA committees, you know what I’m talking about. I have seen firsthand in local markets a cool operator alliance structure where several corporate-centered operators will farm out all of their party car business to one operator. That way they don’t have to run out and buy a super stretch for those one-off requests AND they don’t have to turn the business down. They book it, take their referral commission, and farm the job out to that special operator who IN TURN sends sedan runs back. Many operators have structured alliances like this with bus operators to avoid the cost of a bus.

In today’s business world, EVERYONE you talk to has been told to ask for a better price. Professional buyers and key decision-makers know that operators will drop their prices at the first sign of resistance, so they ask everyone for a discount. And they can be aggressive in their approach. The pitfall here is that experienced negotiators lose respect for people who drop their prices too quickly. Standing your ground and refusing to cave in right away also shows strength, and executives respect such behavior.

Remember, everything you do now affects your customers’ attitude toward you in the future. A business executive once told me that she knew which of her suppliers she could browbeat into giving her a better price and she always took advantage of that perceived weakness. Pricing pushback has a lot to do with the lack of perceived value for your service. Taylor says our image is a problem and it’s lower than it should be because we lack consistency in services across all markets. And that is a sticky sitch. Back in the day, operators followed their clients around town ONLY. You were able to offer consistent chauffeurs. Your companies got deep with clients and could anticipate their needs. You could form personal relationships with them. Thus, they knew what to consistently expect. Today you must follow those customers all over the globe. That means you have to somehow manage clients’ expectation levels when they are out of your reach, and that is where we fall down. If you want to hold price, you must make sure that no matter where your client travels, the service is exactly the same.

This is tough to do. But the first step is profiling your clients and making sure those profiles are followed — including chauffeur style — without exception with anyone you outsource to. Consistency in service is an absolute selling point for you!

On the subject of image, I challenge all of us to renew our ethical vows. Sorry to sound like Debbie Downer, but we have a perception problem in the public sector. This points to our behavior toward one another. Just in the last week two different operators told me they were embarrassed to tell people what they did for a living — not a good sign. When we belittle the competition, we come across as unprofessional. Bad-mouthing the competition lowers the bar for everyone in the industry.

We must operate our businesses as if the world is watching our every move. We must be conscious of those who work for us and who need to see us as moral leaders. Our behavior and code of conduct make a big difference in our service levels. It’s been a bad few years for this nation’s leaders, and our society is paying a hefty price for the disregard of ethics in business today. As evidenced in the news almost daily, the me-myself-and-I/winner-takes-all attitude is NOT a sustainable business model.

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