Tim Rose brings his expertise to next year’s highly anticipated event.
The simple farming we do amid the soil brings growth and bounty — farming in the livery industry is no different. If you like things as they are, then do nothing. But if you want to grow your operation, planting the seeds for successful farm work is a must. With the March International LCT Show looming, ripe for networking, now is the season to till and reap.
Farm work in this industry comes in two ways: In or out. Structures and agreements may vary, of course, but deciding to partner with other operators takes some time and consideration.
The timing of expansion into farm-in and farm out is based on one primary desire: To grow revenue and profits, increase use of resources, and create relationships.
This industry is one of a few that depends on affiliate partners. We are both competitive and cooperative. We look for market advantages and sell against the same operators who we trust to treat our clients with care. It is a balancing act of sales initiative and integrity.
Know Your Local Farmers
Local farm-in and farm-out work is fairly standard, even with small operators simply because this industry must fulfill its promises to clients. When the manifest changes and help is needed, knowing your local operators is critical to your success. Giving a ride away to your local, organic market operator is actually the more profitable thing to do sometimes, depending on the ride and availability of vehicles and chauffeurs. Calling someone in for one ride on a quiet day for a 15-minute ride probably is not profitable. A trusted local company might be the smarter alternative, so keep your competitors close and work together.
On the flip side, local farmed-in rides are often not very profitable, but any local farming must go both ways. Since the industry has a fairly standard discount of 10%, taking a cheap ride might not yield any profits on its own, but consider your internal needs. Farm-ins might fill in the idle hours between rides on a slower day, increasing driver and vehicle efficiencies.
Farm-ins may be hourly rides or rides in larger vehicles that supplement a group move. These are certainly more profitable, but even a break-even ride helps pay for the cost of the vehicle and operational overhead. If you have excess capacity in idle cars or chauffeurs, expand locally and start covering costs of service delivery. Certainly, chauffeurs will be happy to work no matter whom they represent. There is a symbiosis here that helps both operators grow in healthy ways.
Imagine if someone else did your work, and you got paid for it. That describes the farm-out business. Growing your network outside of your market takes effort and commitment, but it can be lucrative. Short of expanding into markets through acquisition, cultivating partners in other markets is an economical way to grow volume, reputation, and business relationships. It’s a smart move when you can get your cut on every ride in another town with little to no costs.
How do you know the players? You must be present — not physically in every city, of course, but be visible and develop the relationships through online presence, occasional in-person visits, and attendance at major shows. The most-oft cited reason for attending the International LCT Shows in Vegas is networking. Not just for friendships or good deals, but for business. If you are walking away from a show without expanded contacts in your clients’ destination cities, you are leaving bushels of money in someone else’s basket.
Ask for the Business
Know where your clients travel. You’ve been booking their flights to Norfolk or Boise for years. Find the operators there, and ask if they would like your business (they will say yes). Get the paperwork and insurance covered, and start asking your clients on every ride if you can arrange for a pick-up to their hotel from the Boise airport.
Visit your corporate travel managers and administrative assistants to let them know you provide full service in their markets. Stress the simpler billing and single-contact service. Take it a step further with the use of travel booking tools to ease the transaction even more. Just know you want to grow, and then nurture these local relationships. Soon, they will be calling you to handle a meeting in Florida or San Francisco while someone else does that actual driving, waiting, and paying for the fuel. It’s a recipe for success.
This all sounds so easy. It can be, but be sure to consider all the operational aspects of farming. Your goal is to profit by satisfying a client’s fundamental travel need, and your client must feel comfortable in the vehicle, no matter the market. Vehicle type may matter, for example, or having every chauffeur dressed in black and white may be what works for your clientele. Each affiliate represents your brand, a delicate matter, so be straightforward about what level of service you expect. Communicating clear expectations is key to producing a successful relationship for everyone involved.
The gritty side of farming out is the back side of the transaction. The mélange of various internal departments makes for a smooth operation. When farming out, software that integrates well eases accountability and accounting. Dispatchers will need to call to other cities on each ride to ensure the chauffeur is on the way and on location. And billing and collecting credit card payments can take some time — there is work within the office, to be sure. But remember, this work is part of the overhead already there.
Farm-ins are a little different because you are the one representing someone else’s brand. It requires training for all staff and chauffeurs on how to mimic another company. As a trusted representative of another operator, your staff must say they work for the other company if a passenger asks. Logoed signs may be needed on iPads that imitate what a client expects to see in their hometown. Even special neckties may have to be worn as part of the uniform. These are easy to coordinate, and doing it well will ensure more business comes your way.
At the end of the ride, billing must be smooth and accurate. Floating money to an affiliate that does not pay timely is brutal, particularly for small operators who want to grow. Have the credit cards ready and pre-authorized, like for all other transactions.
Is this all too much? It can be. When farm-ins represent too large a portion of your business, profit margins will fall, so monitoring that is important. But farming out is like having independent operators without the burden of providing employment, vehicles, or fuel. All you need is the credit card to pay your affiliate and the operational integrity to deliver in your own market when it’s your turn.
Cooperative farming yields great benefits. For growth outside your home market, it is nearly indispensable. Affiliate relationships are natural symbiotic partnerships to grow your home market garden. Fertilize them with attention, operations excellence, and brand consistency, and you will reap far more than you sow.
Tim Rose brings his expertise to next year’s highly anticipated event.
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