You Can Still Build Corporate Business During Recessions

LCT Staff
Posted on December 1, 2008

Economic conditions in the U.S. have worsened all year, and tightened up even further since the credit crisis hit Wall Street in September. It’s not an easy time for any chauffeured transportation company, yet some are getting through this period with stability and a few are even growing.

Financial service companies and auto manufacturers and suppliers are clearly taking a hit, as are most industries and services. However, many corporations still need ground transportation suppliers to move their employees to meetings and private and commercial airports. This is a critical time for operators to inventory their business plans and marketing strategies so they can avoid the rocks and flow downstream smoothly.

Finding the Right Niche

For Darrell Anderson, president of A-National Limousine Service Inc. in Atlanta, company growth hasn’t come by only competing with large operators. During its 30 years in the industry, growth has come from building relationships in market niches. Instead of focusing only on airport runs for corporate accounts, A-National provides ground transportation for airline crews employed by 18 airlines serving the Hartsfield-Jackson Atlanta International Airport. Delta Airlines presented the company with an award for its 2007 transportation services.

Airlines weren’t getting the employee transportation services they needed, which provided an excellent opportunity for A-National. “Hotels haven’t handled it well,” he says. “Sometimes there are layovers for 48 hours.”

Another niche has been finding local companies in the $25 million annual revenue range that need transportation, or regional offices of major corporations. One client that has worked well for A-National has been Hatco, which specializes in appliances for high-end homes. The company needs to bring homebuilders and interior designers onsite for sales meetings. A-National transports Hatco’s customers in and out of the city for these business meetings.

Anderson has been able to meet local business owners and regional managers at meetings held by Atlanta’s Chamber of Commerce and Convention and Visitors Bureau. Getting connected with destination management companies also has been an important step forward. “DMCs are now making decisions about ground transportation,” he says. “They handle airport runs, meeting sessions, VIP service, bus runs, and sight seeing. They want to see if you can provide better service than anyone else.”

Odds in Your Favor with Casinos

THE GAMBLING/GAMING industry is one of the top 10 fastest growing markets in the U.S., according to the Bureau of Labor Statistics. About 25% of the American population visits casinos, which have been expanding nationwide.

“Casinos have come to a neighborhood near you,” says Marshall Murdaugh, a travel industry expert consultant who used to be executive director for the convention bureau in Atlantic City, N.J.

While several of the largest casinos have their own internal limousine services, this has not been the case with many of the new casinos built nationwide. The key is building relationships with casino managers where chauffeured services are needed. Gambling in the casinos used to be the largest revenue chunk for these companies.

Now most of the revenue comes from restaurants, entertainment, and lodging. Building up their brand differentiation means providing many goods and services, Murdaugh says, and ground transportation is part of these services.

Race track casinos also represent a booming trend that could provide much opportunity for chauffeured transportation companies, Murdaugh says. Racetrack casinos have gone through a growth wave, especially in Delaware, Iowa, Louisiana, New York, Pennsylvania, Rhode Island, and West Virginia, according to an annual report published by the American Gaming Association.

Decision makers from the gaming industry tend to become very involved in their local tourism associations, which can be a great source of business from all sorts of travel/tourism companies, Murdaugh says. “There are about 1,500 convention and visitor bureaus and organizations around the country,” he says. “You can work with what the industry refers to as travel intermediaries, such as meeting planners. These are a great source for chauffeured transportation companies. Convention and Visitors Bureaus court these players.”

Corporate Clients You Might Have Missed

WHEN YOU THINK of Nashville, you think of country music award shows. Yes, these provide good business for Nashville-based operators such as Signature Limousine Service, says Matthew Yorke, executive vice president.

The music industry isn’t the only source of business for operators in Nashville, which is considered an important, expanding U.S city. It’s why one of the 2008 presidential candidate debates took place in the city, he says, and this national attention should bring more events to Nashville.

Country music isn’t the only industry that matters. There are also several healthcare companies based in the city, and a well-known cancer research center at Vanderbilt University. The healthcare industry sends its business to large chauffeured transportation companies that aren’t based in Nashville, Yorke says. Healthcare Corp. and other local companies call the major chauffeured transportation brands, but these operators don’t have vehicles or chauffeurs in the city, and need to send the work to affiliate partners such as Signature Limousine Service, which has a 23-vehicle fleet.

Like many midsize operators, Signature Limousine Service has built relationships with several affiliate networks that lead to corporate business that it didn’t get before. Building relationships with operators matters for Signature, and not just for providing local transportation. Being part of the country music industry means that Signature must farm out work to affiliate operators in New York and Los Angeles, which has been good for his company.

Positive Attitudes Matter Much

ALTHOUGH YOU MAY be based in a metro area like Detroit that’s hurting from the downturn, you must maintain a positive attitude, says Sue Jarvis, president of Aristocat Limousine and an NLA board member. She’s owned her business for 21 years, and recent weeks have been the worst she’s seen in the local economy. Now it’s more important than ever to give employees and clients as much positive energy and support as you can.

“Don’t get caught up in negative attitudes and with negative people,” Jarvis says. “You need to focus on what’s the problem and what’s the solution, and then work on it. Take it day by day. Don’t get caught up watching the news.”

Having the right attitude also means doing what’s necessary to cut costs and grow the business, she says. She’s had to put in long-hour work days, and carefully analyze the company’s fleet, payroll, and business expenses. She was able to cut expenses in phone bills and credit card processing charges, but this took careful analysis of billing statements and discussions with suppliers. It’s also meant selling off cars that haven’t been getting enough use. “If the car’s not pulling its weight and making money, let it go,” she says.

She also recommends looking carefully at what you have in client relationships and seeing how that can grow and bring more revenue. “Take care of what you have,” she says. “It’s much easier to retain current clients. Get in touch with them and ask if other departments need transportation.”

Tapping business relationships is an important part of growing during tough times. Signature Limousine Service is using its reservation agents to make “warm calls” to current clients and let them know they can fulfill transportation needs across the country, and ask if they have any referrals. A-National Limousine Service offers 10% of the transaction cost to concierges, valets, and travel agents who refer business to them.

It’s not all about finding new business. During recessionary economic conditions, building on your network of clients, affiliates, and local businesses is an essential part of growing and staying afloat.

Time for Team Building

DALLAS IS FEELING the financial squeeze, as are most major metro markets. Like many operators, ALT Worldwide Chauffeured Services is strategizing on growing to the next level during challenging times, vice president Kevin Hoque says. The company works on increasing revenue from targeted corporate markets: pharmaceutical, entertainment (music and sports), technology and computers, accountants, and consultants.

One step forward for the company has been merging with Fort Worth, Texas–based Agency Limousine & Coach, which increases its size, revenue, and profits. “This move made up for the business we lacked in the summer,” Hoque says. “We consolidated most of the fixed costs to acquire the profit margin desired.”

Hoque recommends focusing on team building as an essential element of strengthening your company. This will happen through company staff meetings and social outings, where staff members can talk about what matters to them. “Communicate with each associate, and make them part of your team to work through these tough times,” he says. “Do not be afraid to ask for suggestions and recommendations,” and thank them for doing so.

Hoque believes in setting up special events for his management team. “Take your managers to an out-of-the-office activity,” such as bowling, Hoque says. “It shows you still care, and are not afraid to invest where it matters without breaking the bank.” The social experience gives managers a good example to practice through their own job responsibilities. “Then let the managers do the same for people under them… chauffeurs, customer service representatives, fleet controllers, detailers, etc.”

Strengthen Your Sales Team

MICHAEL LINDSEY, president of Lindsey Limousine in South Windsor, Conn., has changed his sales training techniques with customer service representatives over the years after focusing on what works and what doesn’t. His training seminars used to feature a long slide show with sales strategies and a detailed script for phone communications. Some of this worked and much of it bored his staff members and didn’t work very well.

Instead of lecturing employees on everything they need to do, he’s learned that they must talk to each other about effective customer sales experiences. “They hear true-to-life stories,” he says. “It’s great for them to hear what’s worked.”

Getting the team to talk to each other and share tools of the trade has led him to produce an easy-to-read training document. “I used to write a script for the staff, but it wasn’t used by them,” Lindsey says. “I asked them what would work. They said short bullet items would work.”

He revamped the format and shared the document with staff. They gave him feedback and he made their suggested changes. Then he had it laminated into a small document, distributed them out to his team, and kept one for himself to review regularly. “They bought into it,” Lindsey says. “It was huge. It shows them what questions to ask,” during phone calls, “and what to say.

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