DEC. LCT: Motorcoach charter and tour services are suffering collateral damage as part of the city’s aggressive new rules.
Prom season can mean an increase of income as well as an increase in headaches. For many operators who focus on retail sales such as weddings, anniversaries and retirements, this extra income is a goldmine. For those who normally focus on the corporate market, it can mean an increase in phone time with young teens in search of the best hourly rates. It also means new opportunity to both the corporate and retail operators.
How an operator responds to these price-shopping calls can have a direct effect on the bottom line profit. It can result in an increase or a decrease of profit depending on how it is marketed and managed. For those operators who shun the youthful business, the bottom line profit could be affected for decades.
I can think of at least five corporate clients that began their business with me by renting a limo for their prom 15 years ago. The kids do grow up and providing service today offers an opportunity to lay the foundation for a long lasting business relationship that could include graduation from high school or college, as well as the bachelor party and wedding. Don’t be too quick to dismiss the opportunity. Corporate cars aren’t usually doing corporate work on Saturday nights anyway, so why not make money and develop a new client?
Depending upon the size of your service area, prom season be a one week period, or in larger areas, six to eight weeks. Eight weeks of consecutive Saturday night sell-outs can surely provide a windfall of cash that can help the smaller operator during the slower times of the year. In addition to the traditional prom, there are also Winter Formals and graduation seasons that provide additional income. Also, when considering the income from youth activities we cannot forget other celebrations such as quinceaneras, bar mitzvahs, bat mitzvahs, and cotillion. All of these social, ethnic, and religious ceremonies tend to be lavish and the luxury of a limousine fits nicely with the glitz.
Should You Be Doing Prom Business?
Whether you should be doing prom business is based on many factors. The most prominent being the consideration of your normal Saturday night business. If you are not selling out every Saturday night, you should of course pursue the prom business. Obviously if your Saturday nights are always sold out, you should probably pass on the increase in headaches brought on by serving teens. Problems with driving teens are their attempts to consume alcohol and illicit drugs as well as where to draw the line with amorous behavior between couples. This places the chauffeur into serving as a glorified baby-sitter for the night. For the patient and considerate chauffeur, it provides the opportunity to educate the young passengers on the etiquette of using luxury transportation.
If you don’t wish to serve the teen market for fear of damage to the vehicle or lack of patience to deal with them, it is understandable. As long as your other bookings are paying the bills, it is acceptable to bypass the increase in revenue in favor of your sanity.
Marketing Prom Work
One of the greatest things about the increase in business from prom season is the fact that advertising dollars don’t really need to be spent. It is a matter of supply and demand. If you have done your homework, you know exactly how many limousines operate in your service area. If there are five limo services in your area, and between the five services a combined total of 13 limos exist, that is the total supply. Each company has a 100% opportunity of gaining the sale because each service will be called for a rate and availability check. Each company has a 20% chance to close the sale without effort based purely on supply. As each individual company rents every vehicle they have, the odds increase that one of the companies who still has vehicles available will get the order until eventually there is only one car left to rent in the community and almost any price can be commanded.
Placing ads in high school yearbooks or student newspapers is not necessary in most communities because of the supply and demand issue. If you have a population of 1,000 students at a single high school, assume only 600 will read the newspaper and of those that read the paper, only 300 will look at your advertisement, and only 30 of those students will be in the market for a limousine. Those 30 students were going to call you anyway, so save your money.
This is why I mentioned earlier that your bottom line profit can actually decrease if you waste money on advertisement trying to reach people that are going to call you anyway. Likewise, I don’t advocate buying student lists and doing mass mailings which are expensive and have a success rate of only about 3%.
Make sure to ask your corporate clients if they need a limousine for their student’s prom. Let them know that you like to take care of your regular clients first. You will seldom have any discussion about rates with a corporate client. They know your rates, your reputation, and the level of service you provide.
Another popular method for searching for limo prices is through the Internet with referral companies such as Limos.com. Make sure your company has a presence on the Web either through your own website or by becoming a member of various referral sources such as NLARide.com, Limos.com, Limopros.com, and many others. Your own website should include pricing. Americans have become a “now” society, and expect all information to be at their finger tips. If your website doesn’t have prices, it doesn’t really tell them what they want. The only reason for visiting the website is to see what type of vehicles you have and how much they cost.
The Price Shopping Game
As prom season approaches, calls from youthful price shoppers begin. In the week before the prom, the ringer on your phone can wear out from the number of calls of young price shoppers and their parents.
The teens generally have one thing on their mind and one question. How much is it? Other regular questions are what kind of cars do you have and what comes in them. How you treat this call, regardless of your pricing, may determine whether the price shopping game ends here and you get the order. Remember, our service begins the moment we pick up the phone and the person answering it represents the entire company in that phone call. Teens are spending the same amount of money as our adult customers and they expect and have a right to be treated with courtesy and dignity. Don’t assume it’s another teen without enough money to possibly rent a limousine. Mom and Dad may be paying and asked the teen to perform due diligence in price shopping before booking.
Parents calling will also be looking for pricing but are more likely to listen to a sales pitch about what makes your service better than the competitor if your pricing is higher.
I tell all clients shopping by price that you can get a bed and a hot shower at Motel 6 for an outstanding price. A bed and hot shower at a Hilton Hotel costs more but isn’t really comparable to Motel 6. The two are in the same business but not serving the same clients. Likewise, there are limousine companies that cater to those on a budget and there are those who cater to clients seeking a higher level of service. Remember, it is prom night and you will sell out. You never need to discount for prom — ever!
Let parents know that you take the safety and responsibility of their children seriously. Explain your policies about keeping the night alcohol and drug free. All backpacks, purses, fanny packs, and overnight bags will be stored in the trunk until the end of the night. Share with them your Prom Pledge for a safe night. If you don’t have a prom pledge, obtain a copy from the National Limousine Association and adhere to it.
Explain the cost of hiring and training professional chauffeurs and your screening procedures for hiring. Explain your maintenance costs and how you believe it is worth it to have your vehicles maintained by a professional mechanic and detailer to provide the cleanest, safest, most reliable vehicles. Have a prepared Top Ten reasons for having a higher price list. Offer to name a few of your high profile clients for a reference check with advance approval from your client.
Making Proms More Profitable
There are a variety of ways to increase your profit as well as your total selling price. One method is up-selling to a larger vehicle. The larger the vehicle, the higher the hourly rate is. However, this generally causes the average cost per passenger to drop down. Since students are looking for the best deal, this becomes more appealing to them to take a larger vehicle both for the attention it garners, as well as a lower individual price for students splitting the fare.
Create packages which include flowers and/or dinner. Most limousine companies already have a relationship with a florist for special orders. Use this established relationship to include boutonnieres and corsages. Create packages which include a set of two, six, or eight. People love one-stop shopping. Ask the florist for the price of each when buying multiples and mark it up, and divide the total cost over the minimum rental period. Raise your hourly rate to cover the marked up cost of the flowers but don’t present it as an hourly rate, but rather a flat package which includes the limousine rental for a specified number of hours, flowers, gratuity, fuel surcharges, etc., as one single price.
Before prom season arrives, make a deal with a restaurant to include dinner for your clients. It doesn’t have to be specified that it is just for prom. Most restaurants will make a deal with you to give you one meal with each paid meal. Make sure you let the restaurant know that you will include their name on your website and marketing materials for being their exclusive restaurant recommendation. Other alternatives could be a 20% discount, or even a complete trade for limousine services, which is better for both the limousine service and the restaurant. You will need to establish an average cost per plate to figure this into your package price. Again, offer dinner packages for two, six, or eight passengers. Make sure you include the tip for the waitress in the pricing in case your young passengers assume it is included as well.
Implement a minimum five-hour rental period. Students and parents always seem surprised that they have to pay for the limousine to sit and wait for the passengers. Generally, people don’t like to pay for the vehicle to sit. If the vehicle had been rented to bar hopping adults for the night, it would be sitting in front of a bar instead. There is no reason to accept drop-offs only or a pickup after the prom. Get paid for the entire evening.
Networking with Other Limo Companies
I have always advocated maintaining good relationships with other local limousine services. When you are sold out and a VIP calls, you should have a friendly competitor who you can trust to handle the job without stealing your client. Likewise, a breakdown or accident that cripples one of your cars is much easier to handle when the competition will help you.
During prom time, talk with your competitors to find out what vehicles they have available and share with them which vehicles you have available on various prom nights. Just as sold-out hotels will refer guests to another hotel, our industry can do the same. People will appreciate the referral and remember that you didn’t just tell them you were sold out and hang up, but assisted them in locating transportation.
By working together, operators can completely deplete the entire community supply of limousines through referrals to each other based on what type of vehicle the client is searching for.
Other Youth Events
In a addition to the prom and formals, there are many specialized events such as quinceaneras, bar mitzvahs, bat mitzvahs, and cotillion. With the exception of cotillion, most of these events are hosted and sponsored by family members under the guidance of a coordinator provided by the church. These coordinators assist families in proper protocol, traditions, and services. Just as you might include hotel concierges and travel agents in your marketing efforts, face-to-face visits with these coordinators can be just as financially rewarding.
The coordinators themselves can be offered discounted or comp service, but the approach to such gestures should be more subdued. Many of these coordinators perform their job as a matter of respect and commitment to their religion as opposed to doing it for the income or freebies expected by travel agents. Ask friends who attend various churches who the bridal coordinator is for the church. The coordinator usually handles all types of ceremonies in the church. Offer to provide the coordinator with a stack of brochures or business cards that can be placed in an information package given to members of the church hosting such ceremonies.
Cotillion is generally sponsored by private schools and those attending usually come from high income families. Cotillion is a celebration of young ladies who are presented as debutants. High income families will seldom consider pricing before ordering the transportation they need. Cotillion may be held at a rental hall, a hotel, or at the school. Check with private schools in your area to see who holds cotillion. Once you have found which schools or organizations do, find out what the best method for advertising your services might be.
DEC. LCT: Motorcoach charter and tour services are suffering collateral damage as part of the city’s aggressive new rules.
DEC. LCT: Tom Holden presented a webinar on making a decisionthat can help you save money in the long run.
eNews Exclusive: Zena Kulikowska has grown to love the fast-paced, always-on world of luxury vehicle service.
The TNC's low rates are made possible by massive investor subsidies that add up to poor returns and big losses.
DEC. LCT: Seasonal Bookings: If you look hard enough, you can make your bus business a year-round revenue generator.
A leading industry advocate calls the decision a big win for luxury ground transportation in New York City.
A first-ever industry trade show across the Atlantic will bring together a growing international luxury transportation sector.
EVENT PREVIEW: Bill Faeth spoke to LCT about what operators can expect when they come to his annual educational event.
DEC. LCT: Chris Hundley embraces challenges and uses them to improve his business and himself.
DEC.: LCT hit up cutting-edge industry owners and entrepreneurs for their latest business approaches and ventures.
DEC. LCT: This isn’t your typical social media etiquette class — get ready for some hard truths.
DEC. LCT Editor's Edge: The media has moved on from its mad mangle of a big story. Some of these points never got in their way.
DEC. LCT Publisher's Page: The mission of this year was about focus, retooling, and turning a profit.
DEC. LCT: Reach out, own it, and keep it real.
DEC. LCT Profit Motives: You can gain more conversions through retargeting toward consumers interested in your service.
The world's No. 1 online marketplace and trader for professional chauffeured and chartered vehicles, including all types of motorcoaches, buses, vans, stretch limousines, sedans, SUVs, exotics, and classics. New and used vehicles are available from sellers across the nation.
The best online networker to find quality affiliates worldwide and market your company.
Click on any state to see the latest industry news and events in that region.