Wednesday, February 21, 2024
By Valerie Levay

Own Coaches Your customers are demanding it. You’re happy with your farm-out coach partners, but you also see the writing on the wall with a changing industry that is regularly embracing larger coach vehicles. You’re eager to jump in and make that purchase: But before you slap down that deposit, here are some helpful tips to ensure you are really ready to make this move.

It is understandable that many chauffeured transportation companies want a slice of the action, with the bus and motorcoach transportation market continuing to thrive. Bookings were worth an estimated $1.7 trillion in 2017 and show no signs of slowing for 2019 and beyond. But while it is helpful to have good variety in your fleet, you need to be focused in your approach. There’s no point in having a pricy motorcoach on your balance sheet just because your competitors do. Do you know how you are going to use it, and how you'll make it fit effectively with the services you currently offer?

If you answered yes to those questions (and the seven questions in the sidebar below), then you’ve done your homework and are ready for investing in a motorcoach. Coaches can be and have been an excellent investment for countless operators throughout the country, but if those questions made you pause, perhaps it’s time to delay the purchase. It’s a fine line between calculated risk and taking a reckless plunge with a vehicle six to ten times the price of a sedan.

Building Your Business
The vast majority of potential customers are not looking for a company that does everything. They are looking for one that can provide the exact service they need—and do it well. Spreading yourself too thinly over many different transportation services that aren’t your specialty can result in poor service delivery—and potential damage to your reputation in the long run.

Are You Ready to Own Buses and Motorcoaches?
Consider the following questions before dropping big bucks on some big investments:

Do you have the infrastructure in place to successfully acquire and operate these coaches? This includes parking, washing equipment, access to dump facilities (for restrooms), staff, etc.

Are you prepared for the additional costs for insurance, maintenance, staffing, training, and marketing?

Are you comfortable with assuming the record-keeping that comes with operating buses, which will include facility and vehicle inspections? You will also need to be familiar with, and abide by, any state regulations if operating outside your home state.

Have you prepared your entire team for the new vehicles with training, strategies for selling, and a true understanding of the run cycle of the bus (from leaving the base to returning for detailing, etc.)? Coaches require more prep time, more maintenance time, more time between runs, and more time period.

Have you onboarded enough CDL drivers? There are wholly new—and strict—hours of service regulations that most companies that don’t currently operate DOT-regulated vehicles need to understand.

Have you carefully considered how they will fit with your existing business model and service offering? Or have you added them to your fleet simply to keep up with your competitors who are doing the same thing?

Is there enough coach work in your area to support your purchase?
So, when you decide to invest in a motorcoach for your fleet, you need to ensure you have a strategy to capitalize on your existing strengths while nullifying any weaker spots in your service offering. First, identify your areas of expertise. This could be luxury sedan transportation or airport shuttles for busy executives, or perhaps specialist security services, organized winery tours, or weddings and special event transportation. Whatever it may be, find it and focus on it. One caveat: Make sure you do your research. You may have assumed that you’re going to expand your existing winery tour revenue with a coach simply because it has more seats—only to find out you’re your winery partners don’t want or can’t accommodate the larger buses.

Carefully work out what service you are going to target, and how you expect this to evolve over time. How long before you see a return on your investment, and how long before you turn a profit? How are you going to maintain a stable cash flow in the short- and long-term? Making a plan and having these projections in place will allow you to remain focused in your approach. Don’t be tempted to chase work that is really not your specialty just because it appears to offer good returns for other motorcoach service providers—chances are you may end up paying for it further down the line. Do what’s right for your business, not your competitors'.

Tapping Existing Customers
Smart business owners will adapt their plans as necessary, but a good place to start is with your existing customers. In many cases, you already have the coach business but not the equipment. If you’re already farming out motorcoach work, customers who are pleased with your level of service will likely be happy to know that your company is now also delivering the vehicles.
"Don’t pass up the opportunity to market your motorcoach services specifically to those customers who already know and trust your company."
Once you get the word out amongst existing customers, you can also start to diversify your marketing to other groups that may not have used your services before. Utilize positive reviews from current clients and word-of-mouth within the industry to help showcase your experience. They will value the trust and loyalty you’ve already built with your existing customers as well as your notable industry expertise.

Bank on Your Reputation
If you’ve turned away group work in the past because you didn’t have the equipment, now is the time to market to your trusted client base and let them know you’ve expanded your fleet. The emphasis here should be on service. When you’re known for delivering a particular type of chauffeured transportation, this is what will help set your motorcoach services apart. You aren’t just any company that has a fleet of buses and motorcoaches: You understand the market and the needs of your clientele with expert detail. You can adapt and provide more value for money to the customer with an outstanding level of knowledge around this particular service specialty. Highlight the superior level of customer care they will receive, too—your motorcoach offers chauffeured group transportation, not just a bus to get people from points A to B.

Let’s say you are already well-known for providing service to a local DMC, but up to now your transportation options have been minibuses and sedans. Your motorcoach could be used to offer shuttle services for event guests between hotels and reception venues, or transportation to and from a nearby airport if there are a lot of guests flying in. Share the news with your corporate travel managers who may be looking for larger people-movers for special events or corporate functions. Use your existing contacts to market your motorcoach transportation directly to these same customers already using your services and showcase your group transportation capabilities. Even if retail isn’t your thing, wedding parties are using motorcoaches more frequently for moving their guests—a suggestion that might be appreciated by an executive planning their wedding.

Don’t pass up the opportunity to specifically market your motorcoach services to those customers who already know and trust your company. Whether that’s brides and grooms to be, event planners, or corporate executives, emphasize your knowledge and experience in this area and show them why choosing to book motorcoach service with your company offers so many benefits.

Own Coaches Contract Work
Naturally you’ll want to keep your buses on the road as much as possible, so you’ll likely be on the hunt for regular contract work. RFPs can lead to a steady route, which can definitely strengthen your bottom line. This type of work can be found everywhere from colleges and universities to corporations looking for employee shuttles to DMCs in need of professional and upscale providers to governments looking to outsource.

This is where you will want to do your due diligence and possibly work your connections because securing contract work—especially if through the government—can be cutthroat and difficult to secure. If you’re too eager to land that contract, you may miss or minimize hidden details that actually erode profits over the life of the deal. It’s good to take a risk in business, but only after careful consideration of the pros and cons.

For example, a corporation may require a $10M insurance policy while the DOT minimum is $5M, or a university may ask for a motorcoach to be “on call” during at-home games on Saturdays throughout the fall. Depending upon your business, those requirements may cost you serious money. Be smart about reading contracts, and don’t be afraid to negotiate or walk away if it’s harmful to your business in the long run.

Some Final Thoughts
Trying to be all things to all customers is not going to deliver results and grow your business effectively. It may seem counterintuitive, but in order to be truly successful, you need to have a focused plan in place to tap into your own specific service niche and strengths.

Don’t be tempted to go chasing any and all motorcoach work, especially in the beginning, as hard as it may be to resist. Diversifying your fleet with motorcoaches is undoubtedly a positive step toward further business growth, but be sure to stick with the specialty areas you know well before trying new avenues. You should be discerning about the bookings you take on and have a clear plan for making a success of your investment from the outset. Adding a motorcoach should always enhance your business and the services that you can offer your clients, not choke your bottom line.    [CD0319]
Valerie Levay is the Director of Marketing for DriveProfit. She can be reached at valerie@driveprofit.com.