July Charter Marketing Survival Bulletin

Three Ways to Grow Your Charter Business

There are three ways to grow any business. In the charter industry, you can increase the number of customers, increase the average number of trips per customer, and increase the average revenue per trip.

A good marketing plan works on all three.

Increase Customers

Notice I said customers, not new customers. Far too many operators spend way too much time and money trying to get new customers.

Chasing a new customer is the single most costly marketing investment you can make, and it usually has the lowest return.

Instead, put your focus on slowing the run-off, or the number of customers who stop flying with you.

It should be relatively easy to run a report from your operations software to identify customers who haven’t flown with you in over a year.

A good marketing plan would identify those customers, and then use a combination of email, regular mail, and the telephone to see why they stopped and invite them back.

Increase Trips

Many charter customers use your aircraft for specific business or family purposes, and never consider other reasons to fly privately.

A good marketing program keeps your clients informed on a periodic basis about different ways charter can be used to help them to grow their businesses or make things a little more convenient for their families.

Improve the Averages

Your goal is to improve the average number of trips across your client base over the course of a year. Try to improve the average by 10%.

No, you won’t get every client to fly more often. But a good marketing plan will get some of them to fly enough extra trips that the overall average will rise 10%.

Revenue per Trip

This is not another way of saying, “raise your prices.” Instead, the marketing goal is to show your clients how they can get more value from each trip, or at least from some trips.

For example, are most of your trips point to point, with no stops along the way?

Suppose a few of your clients, on some of their trips, made a stop on the way back home…maybe to make another sales call, visit a plant, or pick up a key prospect who needed a lift back home.

Extra stops mean more flight time, and therefore more revenue, on that trip. A good marketing plan gives your clients ideas about better ways to use charter, which then generates more revenue for you on some of their trips.

Do the Math

If your marketing plan could get you a 10% improvement in each area (customers, trips, revenue per trip) your business would grow 33%. That’s growing!

Airlines Cutting Capacity is Good for Charter!

This week, United and Continental followed American's lead from last week, and announced plans to retire aircraft from their fleets and cut capacity 16-17%, effectively matching American.

This is good news for those 135 Charter Operators whose marketing solutions are robust enough to capitalize on this opportunity. I'll explain.

Retiring aircraft, as they've all announced, means fewer planes to fly existing routes. So they'll have to drop some flights from schedules. That means some cities that had 4 round trips per day will be cut back to 2 or 3. Which means it will be harder to get a seat; and the schedules will be less convenient.

In some cases, the big carriers will drop cities entirely, as American did two years ago when it dropped Pittsburgh. The regional carriers like American Eagle and Continental Express might step in, like Eagle did in PIT. But then the passengers are on smaller jets, no first class, no room for carry-on bags, still tough to get seats. And fewer round trips per day. And 3-hour flights in those flying cigars.

Hub cities like Dallas, Houston, Cleveland, and Denver will take some of the brunt. But Chicago's going to have the most pain with two carriers having major hubs at ORD.

So what's the good news for charter operators with great marketing solutions? Just this. Many of your customers use both commercial and charter over the course of the year. But they're going to find it much more difficult, on some routes, to get last minute seats at any price, and booking early still may not get them a decent schedule.

The savvy operator is going to put a customer communications plan into place to educate their current customers about the benefits of flying charter when the commercial carriers drop capacity. Everything from filling more of the seats on a business jet to seriously considering a corporate shuttle.

And operators with good marketing will be educating customers about different ways to use charter that the customer might not have considered. Remember, charter customers get into ruts. Mnay use charter the same way every time and never think about how else they could leverage that business tool.