Why You Are Not NetJets
Posted by adam on February 26, 2007 under Back to School, Fractional Ownership, Story Telling
Balancing your company’s daily investment of funds and energy isn’t easy. Fortunately, while in the start up phase of our own business, we were given some very clear direction by a friend. He said, “Spend as much (or more) on your sales & marketing effort vs. ‘everything else’ and your business will fit the pattern of the most successful start ups in history.” If you can’t or won’t you are prone to flounder.
No matter what your opinion of NetJets or Bluestar Jets, you have to admit the obvious: They are good at getting customers. Whether they succeed or fail long term is irrelevant, the fact is right now they are kicking your ass.
Can you get some of their magic juju? Yes, but it isn’t magic. When it comes to the subject of marketing and sales dollars, many firms have the same patterned responses to why they don’t want to spend money on marketing & sales in order to balance their resource allocation properly. The classic excuses for not thinking about your growth strategically should be exposed for the lunacy they represent:
- The Classic: “We are too busy.” This is classic because it highlights the transitory and “today” nature of our business. “Today” I am flat out with that trip, series of trips, that “one” client, that “one big proposal,” that new plane, the FSDO, the MEL that won’t come back from the FSDO, the checkrides, the training. Yep, I bet you are… busy doing things that don’t help you grow one bit. You are busy treading water.
- The Excuse: “Our budget is capped for this year.” Since when do aviation people have budgets? If they do, then why do you keep robbing the engine reserves for cash flow? In fairness to those that do have budgets, what are you spending your money on? Please, don’t tell me about that great magazine or the direct mail campaign you just sold your Harley to pay for.
- Lying to yourself: “Our customers don’t come from the Internet.” If they aren’t now, they will be next year, next month, next week or even tomorrow. To deny the fact that smart affluent people aren’t hunting on the Internet is downright whacko.
- The Strange: “We’re not sure we want to show our rates, locations and aircraft types.” If you worked for the NSA, the CIA, etc. I can really understand this one. But when you own or manage aircraft that are eager to get as much revenue as possible, you want them all over the Internet. If you don’t, well, your competitor will.
- The Crazy: “We run a tight ship here, and $200 / mo. for leads is just too much.” Ah, yep, our insurance, office and other stuff is about $20K per month.. but like I said… we just don’t have money for business development right now, we need to buckle down.
This one came in after this post was first published. Make sure you are sitting down for this one.
The Uber Crazy: —–> “We can’t start now, call us at the end of the year, we are timing out our pilots.” Ok, so when trucking companies time out their drivers they don’t hire more drivers? They just park the trucks for those few days per week, per month and per year they need to in order to let the truck driver rest. The fast track to profitability!
While you might not be able to spend like Warren Buffett just yet, or don’t have the unstoppable ambition of Bluestar Jets today, you can start to build your company. They are looking for you, but how visible are you?
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Adam,
As always your views are right on.
It may be aviation blasphemy since NetJets has given a lot to business aviation and aviation in general, but I’ll go right ahead and say it.
You may have found the one thing that NetJets really excels at as a business. And that may not be that hard after all…
They just saw that this industry doesn’t operate as a business when it comes to marketing, and thought it might pay off to be the first to do so…(sure, sure, there are others as well…)
But after I stop praising them for the incredible feat of marketing shiny Gulfstreams and Hawkers to the uber-rich, I’m stuck with one fairly obvious question?
WHAT DID THEY MAKE OF THEM?
Not much I’m afraid. Nor will they ever…The state and course of the Frax Industry is a living testament to that.
And I mean, c’mon…Does aviation HAVE to be a low-margin (oops-no margin in their case) business? The Southwests and Ryanairs provide ample hint…
So Kudos to NJ for getting one half of the equation right…Tapping demand. As for the other half…Who was it again that got it right?
Regarding Bluestar….
I’m the last person to offer anything valuable on them since I know so little, but that Gordon Gekko association really kills me!;-)
i’m curious though…what do you guys think about brokerage in the bizav supply chain the way the industry is likely to develop?
Transient middlemen or high-margin solution?
Right on the money.
Hence the need to use services such as Doppelgänger Adam offers. Leveraging your time and resources always made sense to me. Ok that’s a lie: I read that in one of Kiyosaki’s books about 6 years ago.
Hi Adam,
As always, you call it for what it is. I remember in my airline days how the marketing dept. would always do a marketing “blitzkrieg” before opening any new routes, to pump up ticket sales…and it worked. (Never mind that they would waste millions elsewhere and would routinely end up bankrupt, that’s another story).
The irony is that I can vouch for the need to spend in marketing. We went for years getting what we thought was a good amount of traffic from word of mouth, and “golf course referrals”(one CEO telling another they flew on us, etc). But when we really started to budget a yearly marketing program, with a combined attack of internet, business news printed media and good PR, the phones started ringing off the hook and profits have shown a good 20-25% increase each year since (which for a small charter is pretty darn good). Basically, if you can’t afford to invest in marketing, you can’t afford to be in business and you might as well let the bank have their machine now, while it still has some value. Not being able to invest in marketing is like saying you can’t invest in pilot training, or in maintenance.
Please keep the reality checks coming…
Harold
Adam - solid advice!
Our firm is in the nano-niche of air medical transport and our focus for eight years has been to enable our clients to increase the utilization of their services (To safely generate sustainable medically necessary and appropriate flight requests.) Through intensive and highly resource conserving efforts (hence clients rarely have Microsoft-levels of funds or systems for marketing) we enable increased utilization and revenue. You are so right. We find aviation enterprises rarely devote the necessary strategy, time, funds, etc. to drive in the requests (quotes) that they need to achieve high-yields. Those that do - usually succeed. It was so inspiring to read your advice as well as the comments supporting you. All enterprises - aviation or otherwise - must stimulate requests for their services… especially with all of our limits put on by weather, maintenance, availability - etc…….. in part - it IS a NUMBERS game - and also - a matter of astonishing and sustaining those customers firms have worked so hard to earn their trust and loyalty………………… thanks for the sound advice…. Rich O, ThinkThroughTools
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