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The Balance of Supply and Demand

Synergy Marketing
August 23, 2018
4 Important Questions
August 23, 2018
 
Our goal is to help operators sell more charters, to more people, for more money. Sure, it’s catchy and rolls off the tongue, but even more than that? Those words are powerful—and true. In order to ensure a healthy future for our industry, we need more charters to grow our businesses, more people to broaden our consumer base, and, probably most of all, we need to increase our profit margins. Simply put, the margins we currently garner aren’t proportionate to the liability we are exposed to, or the effort it takes to run a charter business.

Though we all employ advertising, sales, and marketing strategies in our businesses, our ability to grow and progress can ultimately be boiled down to the most fundamental of all principles: supply and demand. If the demand for our product outpaces supply, our prices can be raised to a level commensurate with our effort and exposure. If supply outweighs demand, prices remain low and we continue to squeak by,unable to adequately address the elephants in the room (driver shortage, anyone?).

While there are a myriad ways one could address supply and demand, there are a few generally accepted business practices at work in almost all other industries that we need to build into our operations. I am going to address something that we all probably “know” on some level, even though we’re not likely doing it—at least not 100% of the time.

If you are a charter operation, you’ll probably get a quote request today. This means that through your website, social platforms, busrates.com, or another channel, someone will find you. That request suggests that a potential customer has discovered that you exist and offer a service they are considering, or they know enough about our industry to consider using a piece of your equipment to move their group. In all likelihood, you’ll soon respond to that quote, sending them details about the move, along with a price.

You’ll inevitably receive more quote requests during this same window of time, and once you hit send on your response to that initial quote request email,you’ll likely move on to the next in line. By the end of the day (or week),the stack of quote requests you received will likely be close to the same size as the stack of quotes you responded to.

If you are like most operators, you will start and end each week working to keep on top of the flow of quotes. Your objective might be to respond to quotesmore quickly, and you might evendream of a world where quotes are software-based (hello instantaneous!) so you can work on more pressing matters.
 
But we’re missing a step here. In every sales training, you’ll learn that one of the fundamental pieces of the puzzle is the close. Maybe this immediately makes you think about some sleazy used-car salesman (“you’ll get a free undercarriage coating if you buy right now”), or perhaps you’re thinking that you don’t need to close; if they really want what you have, they will buy it.

When we send quotes in this industry, we make a couple of assumptions. First, we assume that because they contacted us, they know about us and we’re going to be their only choice. The reality? Most shoppers are just that: shoppers. They are looking around, trying to figure out who they want to use. And second? We assume that they’ll call us back if they want what we have.

Studies show that when salespeople follow up and ask for the sale, they close many more business deals than the times they choose not to follow up. That’s right, many more deals. Studies also confirm that people are often willing to pay significantly more when they speak with someone who cared enough to follow up.

I am often asked what one thing will help a company to grow the most quickly. Most people are looking for an answer like “post more frequently on Facebook,” or “buy an ad in this magazine.”But honestly? The fastest way to meaningful growth is following up, via phone, with 100% of the quotes that you send, and within 24 hours of sending them.

(Sales and marketing are two different animals. Sales are about responding to existing demand for your product or service, while marketing focuses on increasing the demand. It is easy to look at following up as a strictly sales-related activity, but it actually has a marketing component as well.)

The next step to harvesting more business is to market to your customer base. This marketing is key to increasing demand. Once we’ve worked with a customer, we often assume they’ll call us when they need transportation again. This belief is simply NOT TRUE, and it’s costing you real dollars every month. Sure, you have a base of loyal customers; they are usually people who book frequently or have booked over several years. These people have been with you through thick and thin, and they tell you when other companies call on them. They are good customers, but they’re the exception, not the rule. If a soccer parent books a team bus, or a company books a holiday shuttle this year, it’s not a guarantee that they’ll do the same thing next year. They’ll shop around, just like they did this year unless you give them a reason not to. Marketing is that reason.

So, this is how you do it: every time you quote a charter, add that information to a working database. Record who the potential customer was, what they wanted to book a charter for, and whether that activity is something they do every year. Then, use the information.

Talk to these people on a regular basis and find out what they like. If they’re interested in corporate transportation, for example, send them emails about that. You can also suggest other ways they can use a coach, and introduce them to your sales team. You can teach them how to be a better consumer, how to know something is a good deal, and how they can recognize when they’re trading safety and reliability for dollars. Inform them, inspire them, educate them, and be consistent! Here’s why: the next time that consumer needs a coach, they won’t think about shopping; they’ll think about you.

I know that implementing these changes is far easier said than done. Believe you me, I have been there. It’s just easier to fall back on sending a bulk email to everyone with pictures of your new coaches. (Doing something is obviously better than nothing, right?) But here’s the thing: in all likelihood, getting that email out becomes a low priority when it snows, or it’s Spring Break, or when 1000 other reasons come up. Bottom line? Pretty soon, 6 months have gone by and you’re asking yourself this question: "Is it even worth talking to them now after 6 months of zero communication?"

"Supply and demand are what drives our ability to increase prices. If you were sold out every day, you could raise your prices, replace low-profit business with high-profit work, pay drivers more, and fill up your driver pool. With increased demand comes the control to hire the right people, pay the right people, and keep the right people in your operation."

 
Chances are good that your organization, right now, may not have anyone who has the capability, time, training, or technical prowess to accomplish these follow-up tasks. You may not have a person whose job consists of creating those emails or making phone calls. As an industry, we are so focused on quote delivery as the be-all and end-all of our sales tasks. Because of this, we staff to that level by building organizational structures that allow us to keep our noses above water in the race between quote requests and responding to them. This leaves little room for closing or prospecting. But if you have ever sat in, or listened to, a sales training by the likes of Tony Robbins or Zig Ziglar, you will recall the fact that a good sales or marketing person will not cost you money; they will make you money.

Initially, hiring a person for that particular job can be hard to stomach as you watch your payroll go up. Done consistently, however, these activities can’t do anything but help you grow, and the key to doing them consistently is having someone whose sole job is to make that happen.

The last thing I want to touch on is anniversary-based selling. Remember how I asked you to find out whether a customer anticipates doing a particular move on an annual basis when you’re in the middle of the quote process? The answer to that question is a veritable gold mine.

If you’re willing to accept that most customers won’t be inherently loyal as a result of using your services once, and you know that they are going to be doing the same type of move on an annual basis, you can begin to harvest that business before it ever becomes available to a competitor. This technique works like you can’t imagine, and the reason it works is simple: people are willing to work with you to avoid the process of getting quotes. Calling to say"I see that you booked about this time last year with us, and I wanted to see if you were ready to book again?” will lead to more business. Alternately, when you don’t call, some customers will go to other providers, and some will forget to book again. In many cases, however, this step will get them to book directly, eliminating a lot of the price sensitivity that comes from the shopping experience.

The stuff we’re talking about isn’t simple, and I’d wager that, in most cases, you probably already know that these things would help you grow your business. I’d also wager that in almost every operation in North America, all three of these things aren’t happening all of the time.

Consistency is king in the sales and marketing world—and prince, and queen, and every other royal title. It is the only thing that matters. I have seen people who took marketing in a tacky, weird, cliché direction, but because they did it routinely, consistently, even religiously, they were wildly successful. Contrastingly, I’ve seen others invest in beautiful, well-crafted marketing that was used inconsistently at best, and those efforts became little more than a reminder of what could have been when they actually decided to belly up.

Supply and demand are what drives our ability to increase prices. If you were sold out every day, you could raise your prices, replace low-profit business with high-profit work, pay drivers more, and fill up your driver pool. With increased demand comes the control to hire the right people, pay the right people, and keep the right people in your operation.

This is hard work. I realize it’s virtually impossible to manufacture more time in a day or add more work to someone’s already-overflowing plate. But I also know that if we invest in people that can help us accomplish these three things, we’ll grow, see measurable changes in our businesses, and absolutely sell more charters, to more people, for more money.

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