When thinking about stimulating more business, first thing most taxi business owners think about is getting more customers. When it comes to increasing the business, it seems to an inexperienced marketer that the first thing to do would be to do some kind of advertisement and try to get more new customers.
However, it is not always so. To understand why, you need to understand who your customers are. Your customers are those who:
1. Have money to pay for your service.
2. Have a need that can be satisfied by using your taxi service. Usually, this need is simply getting from destination A to destination B, but it can, actually, be more complicated.
3. Think that their needs will be met when they use your service.
With such an approach to looking at customers it is very easy to see an obvious truth that is frequently omitted when trying to generate more business: all of your current and past customers satisfy the requirements mentioned above. Moreover, all your present and past customers have something that you potential customers do not have, which is experience dealing with you company. Also, your customers have already spent some money with you and from marketing point of view it is much easier (and cheaper) to sell something else to somebody who’s already been using the service than to obtain a new customer. Recently I was re-watching first season of Donald Trump’s show “The Apprentice”. There was an episode there where two teams, guys versus girls, were competing against each other in who makes more money running a “Planet Hollywood” restaurant in Times Square for a night.
Girls focused on the restaurant section that had the highest profit margin, which was the bar. Girls were working there trying to make customers buy more shots, thus putting their effort in the section with most potential profit. Next night it was guys’ turn to run the place. Guys spent most of their time outside of the restaurant, handing out $5 off coupons to people on the street. Obviously, it is hard to surprise a passer-by in Times Square with a coupon. And those people, who actually noticed the coupon offer and decided to visit the restaurant, have found that there was nothing going on the inside – everyone from the guys’ team was so busy trying to give out as many coupons as possible on the street, that the restaurant itself was completely neglected.
Needless to say, in this episode of “The Apprentice” girls have won by a pretty bid percentage. The conclusion from this story is very simple: if trying to generate more business you focus only on getting new customers and ignore marketing to your current and past ones, you lose around 80% of your potential business. If you look around, you’ll see that virtually every business breaks its neck with some kind of a program to obtain customers’ phone number and address. There are credit card offers, promotions, discounts, sales – all of which have one goal: to get customer’s information so that the business could learn more about the customer and market directly to its clients. In the taxi business we are truly blessed – when somebody calls to make a reservation, he or she is automatically asked at least for an address. As a taxi business owner you have a database of ALL your past and current customers. Not to market to these customers is a mistake you simply cannot afford.