As previously suggested size does not mean success. However, we need a guide or gauge to determine growth, success, and sound financial planning. Some old school folks keep it simple. “I bring in more revenue than I have expenses”. That is fine and dandy but in the new normal before we attempt to conquer the planet we need to know our target. The target is best defined as market share and how to dominate it.
We used to have a singular market share dynamic because everyone primarily operated regionally or on a specific geographical footprint . Today things are different. Many operators have no borders. I can remember back then that you can lose a client because they got relocated to another state. It always reminded me of Ted Kennedy when he discussed universal health care decades ago. He clearly stated a modern country can and should offer “Cradle to Coffin” coverage. I often thought of that in regards to any enterprise. Once you have a client keep and service them forever. Today more than ever it is certainly doable.
Back to market share. When discussing it on a regional basis it is either easy or impossible depending on the formula you use. If you have 4 providers with a combined fleet of 100 vehicles with combined annual billing of 8 million dollars servicing the town of Anywhere USA one may surmise the luxury ground transportation is a 8 million dollar business in that market.
Now some may take the process further; for instance, you have taxi cabs, app providers, and many who self service airport runs by themselves, spouses, neighbors, public transit, etc.
Although it is essentially impossible to get specific figures you can come close with a homemade algorithm and typically add a TBD (+-) quotient.
The first lesson learned in merging companies is that you can do more with less. The second is to maintain some degree of vehicular symmetry and just as importantly branding, sub branding and co-branding.
Before we break down these important components, we need to deal with the fragrance of monopoly. Operators or businesses in general who think they can corner any market doing anything are wrong and will also fail. The American consumer does not simply appreciate choice, they do not necessarily request choice. They actually demand it, it is required. Many people are trained to get a second opinion whether it be for a wedding limo or a coronary bypass.
Does that mean the operator loses? The reality is when a consumer starts his shopping research they are known to take bad notes, ask the wrong questions, and sometimes they simply settle for the third inquiry because they have had enough and wind up paying more for less.
I am sure many of you have had calls from customers asking if you had their reservation because they called so many providers they forgot. The basic trick is supply them the competition they require, just make sure you control it. This is a very helpful way to maintain the brands you acquire. Remember keeping them in play is one thing, keeping them out of play with your competitors is even more critical.
As an example, one brand can be in existence with artificially high prices to quote, this would direct the callers to get you on another provider you may control and give you a chance to seal the deal. It is also possible that call was the callers final try and they may bite. You just scored.
One company can be a budget company. Every operator with visions of grandeur should have a budget company designed like the minor leagues. Minor leagues or farm teams are great ways to utilize older vehicles one may acquire from a purchase or simply activate a retired car if your primary company has age limits. It is also a superior system for chauffeur training. Put them on a 30–60–90 day program servicing the lower end market. It is a less liability educational type system that pre preps for major league deployment. We are exploiting the consumer loophole with a income generator.
Vehicular symmetry is a tricky subject. Companies like having identifiable fleets. However we are not UPS. The current and short term future of the entire ground transportation spectrum is so fluid right now that I personally believe the fleet dress or appearance be relaxed at this point. For all good that visual trademarks achieve, I really feel it is stand down time.
Branding is a different issue. Branding is a key part of growth and market share but more importantly stunting a competitors growth. Although we will touch on more intricate details later I firmly believe identities are worth their weight in survival. They can be toned down or removed on the actual vehicles to help facilitate large group orders.
Remember visual branding on luxury transportation is less than 20 years old.
Although every purchase or merger is unique, set up your program and always remember the path of least resistance.