Finding Success in a Small Market

LCT Staff
Posted on May 1, 2001

Not all of the limousine industry is based in large metropolitan areas. There are operators that run vehicles in even the smallest cities of the country. They face many of the same challenges that operators in New York, Chicago and Los Angeles face, but they operate in a smaller market, with less to draw from. Most of the successful operators in these markets agree that in order to be successful they have to work with their noses continually to the grindstone. Patience is a must in small markets.

Success is not going to happen overnight. Operators in small markets also maintain that they are in a constant state of battle with competitors over the smaller amount of money in the particular market. Every hard-fought victory forces these operators to create new and inventive ways to make themselves stand out.

Jay Johnston, president of Tennessee Limousine Service in Memphis, Tenn., is a 30-year veteran in this small market. “It’s hard to stay in this business that long,” Johnston admits. “I’ve seen them come and go.” Johnston boasts a fleet of 27 vehicles, comprised of 18 stretches, four vans, four sedans and two SUVs. He explains that his longevity in the business is a result of a lot of hard work and long hours.

Going Corporate

Johnston stresses that a key for limousine companies to succeed in a smaller market is to strive for corporate work. “What hurts a lot of limousine companies is that they don’t have any corporate backing to carry them through the week,” he explains. “They’re just ‘weekend warriors.’ They do the drunks, the proms and the weddings.”

Michael Gonzales, president of Limotion V.I.P. Limousine Service in Albuquerque N.M., agrees with Johnston. “We do mostly corporate work,” Gonzales says. “There’s a lot of retail work out there, but I try to focus more on corporate work for its stability.” However, since these are smaller markets, the corporate clients are a little more difficult to find than those in larger cities.

According to Johnston, operators need to establish a name for themselves to lure corporate accounts. “We’ve been around so long that everyone in the area knows us,” Johnston explains. “And we do a lot of corporate business in Memphis.” There are a few ways in which your company can establish a name for itself that will attract corporate clients. One way is to become a familiar face to the staff at the local hotels. When business travelers ask the hotels for suggestions on ground transportation services, you want your name to be at the top of the list. Another way is to become a member of your local chamber of commerce. This will help you get to know the business in your area, and better yet, let them know you.

Selling the Sizzle

As most operators know, the most important way to establish yourself in the market and make yourself known, is by providing great service to the customer. Often in smaller markets, clientele expect only the minimum type of service, and would gladly welcome full service. To promote themselves, most operators rely on the advertisements in the local Yellow Pages. However, this is not enough. Word-of-mouth advertising is essential for success in small markets.

“The word-of-mouth is what I want, because that doesn’t cost me anything but the hard work,” says Jeannine Porfilio, president of Allure Limousine, in Milwaukee. According to Porfilio, an operator can establish themselves in their respective markets by providing better service. “I go the extra mile,” Porfilio says. “I live by the saying: Sell the sizzle and not the steak. The steak is the car, and the sizzle is what type of service your going to get with that vehicle. What the company is going to do for you as the customer.”

Tough Competition

Porfilio runs a fleet of seven vehicles and has been in business for seven years. She explains that one of the major challenges that she sees in her market is competition.

“It’s a tough market here,” she explains. “There’s a lot of cut-throating going on here in Milwaukee. I’ve got some companies in my area where the cars look like something that you wouldn’t want to take a rat that you caught in your basement to the vet to have them put to sleep in. I get $100 an hour because I have all nice cars. And they’re renting theirs out for $35. How can I compete with that?”

Rob Hansen, of Bayview Limousine in Seattle, echoes Porfilio’s frustration. “A big challenge we face here in Seattle is the ‘gypsy’ or the ‘black car’ companies undercutting everybody,” Hansen says. “Most corporations won’t deal with those guys, so that’s not much of an issue there. But at the hotels, they’ll say they’re with our company and snatch up our clients off the curb before we have a chance to get down there. It’s real frustrating.”

Gonzales, who has a fleet of nine vehicles, adds that even in his state there is cause for concern. “There’s a lot of competition around,” he says. “New Mexico’s not a big limousine state. The limo business itself is not faring well. For us, it’s mostly sedans, vans and suburbans that we do well with.”

Porfilio says that the only real way to truly deal with this situation is by providing good service and educating the customers. “The biggest difficulty by far is the price gouging with the other limousine companies,” she says. “I combat it by, number one, giving the best service, and number two, when people call for prices I ask them to do some checking. Before they book a limousine they should call the Better Business Bureau and check out that company.

And always make an appointment to go see their fleet. There’s so many companies out there that you might get a car that’s less expensive, but does that mean that the car that shows up on you wedding day will be a nice car? No.”

Trying New Things

Porfilio adds that smaller markets often may not be as “sophisticated” as major metropolitan areas. Thus posing yet another challenge for the industry.

“Milwaukee is a small town.” She says. “It’s a little town within a city. The people here are 50 years behind the times, and always will be.” With a market that prefers a more traditional type of ground travel, selling specialty vehicles may be a little difficult However, one of Porfilio’s prized possessions is a red, 120-inch stretch with a tuxedo top that Springfield Coach debuted at the LCT Show in February.

“When I called Milwaukee and told the staff that I had purchased this red car, they all thought I was out of my mind,” she explains with a laugh. “I had them change the carpeting because what they had in there was too light for this area, and when it arrived everyone thought it was beautiful. Right now the car is starting to sell really well for me because it’s being seen a lot. Before, when I would try to tell them on the phone that I have a specialty car that’s red with a black tuxedo top, they’d say ‘no thank you I want white.’ Now they’re calling every operator in the city and asking if they’re the ones with the red car.”

Making Friends

Another way that operators in small markets can become successful is by affiliating themselves with large, national operators for farm-out work. Johnston and Tennessee Limousine Service have aligned themselves with numerous large operators.

“We do work with a lot of the major carriers, BostonCoach, CLS, Music Express,” he says. “We get a lot of referrals from corporate travelers coming from the larger cities.” Johnston adds that having one of the largest fleets in the area also allows him to do more work and make himself available for farm-in work. “We do tons of corporate events,” he says. “And because of how big we are we’re about the only ones that can handle major groups coming in.” However, working with larger carriers may have some disadvantages for the small-market companies. “We work with a lot of the larger limousine companies,” Gonzales explains. “Getting large companies to pay is difficult. Sometimes they don’t realize that we’re not a large company, and we can’t hold over that kind of money for that long of a period.”


Related Topics: affiliate networks, corporate travel, marketing/promotions, small markets

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