DEC. LCT: Following gradual steps can ensure cool heads and sound judgment prevail.
Custom Transportation Service (CTS) in Braintree, MA, started out as a three-car operation in 1988. The business was being operated out of founder John Greene’s basement. Currently, CTS is fully diversified, utilizing a fleet of 43 vehicles that includes 27 corporate sedans, 10 stretch limousines, five 15-passenger vans, and one full-size motorcoach.
CTS serves virtually all ground-transportation needs. Their clients range from the once-a-year vacation traveller to large corporate customers that use up to 50 cars a day.
Greene’s business started out as a limousine service. Diversification was an aspect he initially gave no consideration. Customer demand made Greene realize that he would have to diversify to satisfy his customers’ needs. “We started as a limousine service and found our customers were using other types of cars and buses,” says Greene. “Initially, we started by sub-leasing our bus business to various carriers in our area.”
Business volume reached a point where it made sense to diversify. “The need to diversify my fleet was evident,” says Greene. “There was too much interest in utilizing vans and full-size motorcoaches.”
Diversification enables operators to take their existing client base and get more business from those clients. Many clients will use one operator for stretch limousines, then go to another operator for airport transfers that require sedan or van rental, and use yet another service for large transfers such as transporting employees to a corporate training session. If your fleet is diversified, you have the potential to acquire all of this type of business.
“By diversifying your fleet, you can take your existing clientele and by simply sending them marketing pieces on the other services you have available, you can increase your revenues and your bottom line without having to expand your existing client base,” says Greene.
STRETCH LIMOUSINES VS. MOTORCOACHES
A new six-to-eight passenger limousine can be purchased for about $50,000. A 28-passenger motorcoach ranges from $42,000 to $200,000.
Greene’s fleet grosses from $200,000 to $300,000 monthly. “Our sedans gross from $6,000 to $7,000 per month,” says Greene. “The stretch limousines bring in from $8,000 to $10,000 per month. The motorcoach side of the business grosses my company from $5,000 to $9,000 monthly.”
Greene promotes his diversified fleet via direct marketing to different corporate accounts and direct-mail advertising. CTS’s direct marketing campaign consists of quarterly newsletters that provide updates on new equipment, current news on staff, and new innovations the company has incorporated. Greene will also utilize press releases for the more significant information he wants to convey to his customer base and prospective clients.
“The fact that we offer a complete array of vehicles makes our company the place for one-stop shopping,” says Greene.
“I think diversification is going to be the wave of the ‘90s,” continued Greene. “There is no question that an operator that is focusing on being a prom and wedding limousine company is not going to be able to compete with a total-transportation company.
We’ve found that in the past five years, many of the operators are looking strongly into diversification of their fleet.”
According to Greene, the fleet makeup of a total transportation company now consists of 15-passenger vans and motorcoaches, along with the stretch limousine and the sedan. In fact, not only are fleets becoming diversified but the client base is as well. Today a list of clients includes your once-a-year leisure traveller, your prom and your wedding customers, your corporate clients as well as referrals.
DIVERSIFICATION MEANS REGULATION
The transporting of large groups of people is a niche that has really grown in the transportation industry. However, this area of transportation is highly regulated. The 10-and-over passenger vehicles are regulated differently in each state. Agencies such as the Interstate Commerce Commission and the Department of Public Utilities set forth guidelines that each operator must adhere to.
“Anyone that is contemplating diversifying their fleet and purchasing vans and/or buses should contact either their local association, the Department of Transportation, or the Department of Public Utilities. Contact whoever your regulating agency is because there is significant regulation in the van and bus area,” says Greene.
“Limousines are very unregulated. However, with vans and buses, commercial driver’s licenses (CDL), drug tests, and physicals are often required. When you’re dealing with a larger quantity of people, the concern is they don’t want the driver or the vehicle to be subpar.”
LISTENING TO THE CLIENT IS VITAL
So many operators do not listen well. The customer is constantly reaching out trying to communicate specific needs. Carefully listening to a client’s needs must be a top priority for any operator. “If you listen to your customers and attempt to meet their needs, they are calling you to diversify,” says Greene. “They don’t want the same stretch limousine all of the time. They have varying needs. If you are truly listening to your customers, you’ll know what they are asking for.”
LIMOVAN GIVES TRUE MEANING TO THE WORD DIVERSIFICATION
When operators think about diversifying their fleet they think about the perfect mix of sedans, limousines, vans, and buses that will attract new clients and maximize business out of their existing customer base.
There is yet another vehicle out on the market that operators have to think seriously about when they consider diversifying their fleet. This vehicle is known as the LimoVan. Designed by Tom Muller, president of Comfort Coach Creations in Allen- town, PA, and built by LCM, Inc., in Elkhart, IN, the LimoVan was created as an alternative to the six-passenger limousine.
This revolutionary new vehicle was built to accommodate the transportation needs of executives, investors, and VIPs for a corporation that desires comfort for up to six passengers.
The LimoVan is equipped with leather seating, walnut woodwork, driver partition, increased outside visibility, passenger compartment with walkthrough entrance and exit, all the amenities found in the finest stretch limousines including telephone and fax machine, and the exterior subtlety many corporations feel is necessary in today’s business world.
Comfort Coach Creations utilized the Ford E-150 chassis because of the appearance and ride as well as the interior space needed for LCM to build the LimoVan to exact specifications.
The LimoVan offers the livery industry and the corporate sector an alternative in luxury transportation that includes 30 percent more passenger space and 20 percent more luggage space than a stretch limousine.
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