What We’re Learning So Far (About What Works), Vol. 1

Martin Romjue
Posted on September 4, 2019
Got any bright ideas? the industry is ready for them. (LCT file image)

Got any bright ideas? the industry is ready for them. (LCT file image)

The terms “disruption” and “change” relentlessly batter businesspeople, as we are constantly told we’re not doing enough, time is running out, or you may become irrelevant. Enough. It’s all sounding so old and shrill. When has human progress not been been disruptive?

Not all ideas and practices deemed new are worthwhile, just as not all considered old are worthless. In business and life, knowing the difference leads to success and peace of mind.

New Outlooks

I’ve titled this column with a Vol. 1 because you can’t cover a topic in one page that goes on forever, if you’re constantly learning. I’ve rounded up some ideas circulating in the industry that offer opportunities:

A Price For Everyone: Many operations still charge flat, fixed, and minimum rates for rides and reservations. Enough data can now be generated to customize rates in real time based on demand and client status. One of the worst examples of old-school pricing I’ve encountered is the classic two-hour minimum for a sedan airport run. That may have worked decades ago, but it doesn’t please the crowd anymore. When you consider hotels, airlines, Uber/Lyft, and smart carpool lanes all calibrate pricing based on real- or near-time supply and demand, there’s potential for luxury ground transportation to follow.

The cost of an airport transfer at 6 a.m. should vary from one at 2 p.m. For operators worried about losing long-time clients, the technology exists to set up algorithms where any type of client, from contracted accounts to individuals, can get pre-arranged rates, even at peak times. On the flipside, a lower rate during slow periods could lure first-time clients who may return.

Pay Up Now: One clear example of a new practice that tests an old one was best summed up recently by my colleague Jim Luff in an article about deadbeat affiliates. Social media forums often feature the latests spats and disputes over affiliate payments. In my industry years, I’ve never seen operators madder than when they believe they’ve been ripped off. Operators can end this. Luff reported the idea of backing all affiliate transactions with credit-cards. No more Net 30, 45, 60, etc. terms that legacy networks dictate. “If you have delivered good service in the past and had no issues, your affiliate should value your work enough to respect your decision to discontinue acting as a bank,” Luff writes. “You also can’t purchase an airline ticket without a credit card, and there is a reason why these companies operate this way. It’s called financial success.”

Meddling-Middlers: Business transactions often rely heavily on middlemen services, which can be costly conduits. When done right, these services provide targeted and specific value at reasonable costs. But in the era of do-it-yourself knowledge and resources, you should think critically about any and all transaction expenses. One improvement I’ve observed is the convenience of a credit-card processing/point-of-sale service in the vehicle. The one-SUV operators I use for airport runs just swipe my credit card on an attached iPad device where I add a tip, and then they email me the receipts. I also text or email my reservations. Operators can now save time and money with an array of direct services that combine data, technology, and communications.

Vetting Fleet Vehicles: We’ve recently heard about a few operators who’ve had a bus repossessed or who are seeking more revenue to support a new one. LCT has run plenty of articles and hosted panels at our events about the need to research your client base and market before adding a minibus or motorcoach. California operator Gary Cardiff (on the Sept. issue cover) advises looking at your total farm-out revenue volume to see if it supports the cost and overhead of a new bus. Likewise, breaking out each fleet vehicle as its own P&L unit on your budget can clarify the profitability of your fleet. A vehicle should pay its own way and yield at least a 10% margin.

There’s also the question of whether investing in a more expensive bus will draw in clients. Again, know your potential target client base and local markets before choosing a particular model or price level. It’s similar to the process high-end grocery chains use to locate new stores; they aim for the neighborhoods with the residents willing to spend more on gourmet or finer foods.

Back To Old School

Now I would like to shout out some ideas or values worth keeping, because they are proven solid.

It’s no secret how the competitive industry situation for LCT has shifted during the past year, with new alliances and dynamics emerging. I’ll forget about the names of the parties involved, and focus on the greater lessons that apply to everyone.

Whether in business, politics, or groups, inclusion has always worked better than exclusion. Narrow pledges and brittle tribal bonds limit potential, whereas a fearless and fluid outlook begets more business.   

At LCT, we are all about promoting a diverse and open global industry marketplace and media outlet that builds bridges, and leaves fear and insecurity behind. In contrast, special interests, anti-competitive ploys, and exclusive end-runs betray the fundamentally American values that benefit every entrepreneur and business owner: A free, fair, and level competitive playing field that protects equality of opportunity.

In such a system, you bust the monopolies to boost Main Street, while celebrating the newcomers, strivers, immigrants, and innovators, all earning and writing their own success stories — on their terms, with the tools they’ve chosen, in places where they want to go.

An open mind and independent spirit generate the curiosity that leads to creativity, which can yield the business solutions that produce wealth. Be confident to roam free outside of the old industry box, and let your optimism and instincts pull you ahead.

Related Topics: affiliate networks, bill paying, credit card processing, innovation, LCT editor, Martin Romjue, profits, rates, revenue growth, state of industry

Martin Romjue Editor
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