Pazos FBO Services: Putting the Customer First in San Juan, Puerto Rico

Part Two: Customer Service, the Universal Language Spoken Everywhere

By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group

Employees of Pazos FBO Services refuel an aircraft on their ramp at Luis Munoz Marin International Airport, San Juan, Puerto Rico.In a previous blog post, we talked about delivering our customer service training program to the good folks at Euro Jet in Prague and how great customer service in the FBO business is truly a universal language spoken everywhere.

Last week we had the privilege of conducting another international training seminar of our Don't Forget the Cheese!™ customer service training program for Pazos FBO Services located at the Luis Munoz Marin International Airport, San Juan, Puerto Rico. And once again we were blown away by the friendly reception we received and the way this FBO goes about its business of delivering a great customer service experience.

Although Pazos is currently operating out of a very limited space, this does not stop the hardworking and dedicated employees from greeting every aircraft and its passengers and crew with the same zeal and enthusiasm that is embodied in their call-to-action statement: Powered by a Passion for Excellence!

Without exception, they were already practicing one of the basic customer service tenets of putting the customer first.

Under the leadership of FBO president José Maldonado and manager Zuleika Caballero, Pazos is making great strides to go to the next level. As a World Fuel Air Elite fuel provider, the FBO has a new expansive fuel farm in place and a fleet of refuelers including two 10,000 gallon trucks.

At the heart of the expansion program is a new 12,000 sq. ft. FBO terminal facility, which is currently under construction and scheduled to open in August. A strategic and integral part of the new terminal will be a ramp side U.S. Customs and Border Protection services facility. This feature will help make Pazos an important turnkey port-of-entry facility for international flights with a U.S. destination.

Customer Service Tip

As part of our customer service training, we introduced Pazos to the art of turning a disgruntled transaction into a tranquil transformation. It all starts by being tactful and choosing your response carefully.

Adding some cheese to the equation means you think tactfully about your response and look and act in a responsible way. In a sense, you become re-sponse-able. That is, your facial expressions display openness and show you are ready to listen.

If you are being confronted by a customer who is disgruntled, show your concern by listening with empathy. Nod your head up and down to show you understand the complaint or the grievance or the criticism. By doing so, you are not showing you agree with the complaint but rather that you are genuinely concerned.

By listening, apologizing, problem solving and acting quickly on a solution, you can transform a dissatisfied customer transaction into a profitable long-term client relationship.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

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NATA’s FBO Leadership Conference: A Gathering Worth Attending!

By John L. Enticknap

 Take the attitude of a student, never be too big to ask questions, never know too much to learn something new.          —Og Mandino 

As a principal of Aviation Business Strategies Group, I’m always tuned into the FBO industry and attend various workshops and seminars to keep abreast of our ever-changing industry.

At the National Air Transportation Association (NATA) Leadership Conference and Day On-the-Hill, which I just returned from, I had the opportunity to rub shoulders with more than 200 industry leaders and get a sense of what is happening to the FBO business on a macroeconomic scale.

As a result, I’m ever more convinced that our industry is heading down the right road to economic recovery, with the caveat that a few steep hills have been placed in our path which from time to time may obstruct our visibility.

High Price of Fuel

One of the biggest obstacles we all face is the uncertainty of the price of fuel, the topic which dominated most of the conversation. We’ve all seen the run up in fuel costs in the last six months—it’s having an effect!

Avgas is now over $5 a gallon. Jet A will go up this coming week to $3.26, from $2.90 GCPM in December. Our flying community continues to feel the strain. The FBOs we talked to, in general, have seen a flat first quarter. The good news is most FBOs have seen their fuel uplift grow since the down trend of 2008/2009. However, the business has since flattened out. Most do not foresee any major growth this year because of the continued price pressure. 

During the Thursday morning seminar, “Oil Company Perspective”, it was very interesting to hear the discussions on fuel supply, both avgas and Jet A. 

With regards to avgas, the suppliers reaffirmed availability is OK. However, as they noted, only a limited number of refineries in the U.S. make avgas, and there is only one supplier of the lead that is used in the refining process. That vendor has assured the aviation community they will continue to make the lead additive. 

On the horizon, however, is the issue of lowering or eliminating the lead from avgas. Then there is the recently filed lawsuit, “Friends of the Earth” vs. the EPA. 

In addition, there is the lawsuit that was filed in California. NATA is already involved and assisting our members. This all adds much uncertainty to the future of avgas for high performance piston engines. For the short term we’re OK, but the future is not clear at this point.

Jet A is not in short supply, but is under pricing pressure from the same factors as overall mogas price speculation and other petroleum products. There are regional price differentials due to a number of factors, according to the oil company speakers, among them Marty Hiller from World Fuel, Joel Hirst from Avfuel and Bryan Faria from ConocoPhillips. 

Of particular note was the information that in North Dakota there is an excess of crude due to recent successful exploration. In addition, there is plenty of crude from other new sources in the U.S. Therefore, pricing of fuel today is not related to crude issues today. 

The fuel suppliers further discussed the FBO fuel marketplace, and the consensus is fuel costs will remain relatively high. Corporate customers are going to continue to seek contracts and discounts from posted pricing and, most of all, good value. 

The European FBO business model, where FBOs charge a la carte fees, will not be a major factor for American FBOs. 

Customer Service Training 

The Disney Institute gave a presentation on customer service which was one of the highlights of the conference. Experienced managers had a chance to hear and learn from one of the premier customer service providers in the country! 

All the attendees know that customer service is the real differentiator when it comes to good FBOs vs. great FBOs. If you missed this seminar, we strongly recommend you attend one in your city and train all your staff on Customer Service. It’s key to your success. 

A couple of thoughts we’ll pass along are about the use of name tags. All your employees should have a quality name tag, with their first name being prominent and including the city where they live. The tag should be engraved with your logo and your Unique Value Proposition or UVP. And always use the customer’s name when you engage them. 

Day On-the-Hill

More than 100 of the attendees also were part of the Day On-the-Hill. We met with our respective House and Senate representatives and discussed the prominent political issues affecting our industry. I encourage you to talk to your U.S. Representatives. Since they are up for re-election this year, they should listen. Talk to your Senator as well. Many of them are also up for re-election.  Some of the issues we discussed included:     

• Fuel Fraud Provision
• Freedom from Government Competition Act
• Temporary Flight Restrictions
• Large Aircraft Security Program
• Flight Management IRS Excise Tax 

If you need help, contact NATA and talk to Eric Byer, Vice President, Government & Industry Affairs. 

This conference was well worth the time for the attendees. The best feature was the opportunity to be able talk to our peers and learn from each other. The FBO business is a dynamic and ever-challenging business. NATA provides a unique forum to allow us to enjoy our great aviation heritage and opportunity. We are all aware of the upcoming changes in the leadership at NATA and trust the future will allow our organization to continue to flourish.

Congratulations to all the award winners. Attendees toasted the industry's best at NATA's annual Industry Excellence Awards dinner and presentation. Top honors went to Mary M. Miller, Vice President, Industry & Government Affairs for Signature Flight Support/BBA Aviation; and Kenneth C. Ricci, Chairman of the Board of Flight Options and CEO of Nextant Aerospace.

Thanks and look forward to hearing from you.  Send your comments to John L. Enticknap   jenticknap@bellsouth.net

Ron Jackson
Ron is Co-Founder of ABSG and President of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese! the ultimate FBO Customer Service Experience. 

John Enticknap
John founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series. 

Improving FBO Productivity in 2012: Business Strategies for Better Success

(Part 3 of a 3-Part Series: Planning a Successful 2012 FBO Business Strategy)

By John L. Enticknap and Ron R. Jackson

 Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused effort.          —P. J. Meyer 

In the first two installments of this three-part series, we discussed “Our FBO Business Outlook for 2012”  and “Decreasing FBO Costs in 2012.” In this third part of our series we discuss ways to improve FBO productivity in 2012.

First of all, the key to executing any business initiative is to set realistic and achievable goals supported by workable strategies to accomplish these goals. As the P.J. Meyer quote suggests, intelligent planning and a focused effort are required. Here are three goals and supporting strategies we recommend to put you on the right productivity track for 2012:

1. Increase Line Service Productivity
        a.  Avoid ramp and hangar mishaps
        b.  Create a credible audit system
        c.  Increase fuel sales at point of connection
2. Produce Better Financials 
        a.  Fine tune your financial dashboard
        b.  Watch your fuel margins
        c.  Cash flow analysis and financial ratios
3. Build Long-Term Profitable Customer Relationships
        a.  Be the restaurant owner
        b.  Communicate your Customer Value Proposition
        c.  Don’t forget the Cheese

Goal No. 1: Increase Line Service Productivity
Strategy a: Avoid ramp and hangar mishaps  

In the FBO business, there is perhaps nothing more perplexing than a mishap on a ramp or in a hangar involving a customer’s aircraft. It not only costs the FBO money and possible loss of business, it costs the customer valuable time and causes, needless to say, customer dissatisfaction. 

The truth is, most mishaps can be avoided through proper training and adherence to a comprehensive Standard Operation Procedure (SOP) manual or document. Initial line service training and diligent recurrent training programs are essential. Following simple rules such as always using multiple wing walkers, especially in hangar situations, is vital. We recommend the NATA Line Service Training (LST) program as a great way to train your line service employees. 

Strategy b: Create a Credible Audit System

As we noted previously, extra training keeps ramp and hangar mishaps to a minimum.  However, we need to make sure training and management systems are monitored, utilized and policies and procedures maintained. An internal audit is one way to evaluate your training programs, but it’s hard to eliminate bias.  Only an external audit can give you a true benchmark measure of policy adherence and performance.

There are a number of qualified professionals you can hire to evaluate your training programs and review OSHA compliance as well as environmental, SPCC plans and other internal/external operational procedures. In addition, an outside audit can verify and establish your business’s credibility with your insurance underwriters, which can often result in lower premiums. It also aids in keeping your line service team sharp and focused on safety and quality.

Recently, NATA established an industry-leading Ground Audit program. It is a nationally recognized audit program developed by and for the FBO industry. It uses trained and accredited auditors, including this blog post’s co-author John Enticknap. It’s a good program, but not easy to qualify for or complete. You may want to be one on the first FBOs to register and use it in your marketing campaigns.

Strategy c: Increase Fuel Sales at Point of Connection

Since your line service personnel are often the first FBO employees to come in contact with customers, they all should take part in any customer service training afforded to Customer Service Representatives (CSRs). In addition, they should be totally aware of any fuel promotion you have in place and should be capable of “suggesting” extra fuel at perhaps a volume discount.

Once you have your refueler hooked up to the aircraft, there are no additional fixed costs. Therefore, this is a great opportunity to pass along a fuel volume discount and add more fuel to the sale. Incremental sales of this type really add up and help improve the bottom line.

Goal No. 2: Produce Better Financials
Strategy a: Fine tune your financial dashboard 

When you review your daily sales and productivity reports or dashboards, do you act on the information or just take it in stride? You should make sure the reports are giving you the information you need to make your business more efficient. 

When you review your maintenance shop productivity, do you make sure the numbers match your targets? If you want 89% productivity from your technicians and don’t achieve it, even for a day, do you act on the information? If you lose even a few days out of the month, it’s easy to lose a month of reasonable profitability. 

It’s the same thing on your fuel sales. If you’re having a soft month, run a fuel promotion. Use some demand pricing to stimulate sales.

Strategy b: Watch your fuel margins  

During our NATA FBO Success Seminar we talk about fuel margins. This is no doubt one of the most popular subject matters at our seminars! Without a decent fuel margin your business doesn’t go anywhere. 

With requests or demands for lower prices from your customers and contract fuel programs, there is increased pressure on your margins. We would like to recommend you institute our $2.00 management plan, another strategy we teach at our NATA FBO Success Seminars. 

It works like this. When you price your retail Jet A fuel, set a two dollar margin as a goal. For example, in today’s market the price build-up would be approximately $3.30 GCPM-Platts—plus 65 cents for Federal taxes, transportation, and flowage fees, etc.—plus a $2.00 margin.  Therefore, the total retail price would be $5.95. Most FBOs are above this retail market price already!  Remind yourself, every time you have to spend $2.00 on overhead, you have to pump another gallon of Jet A. We suggest you keep a $2.00 bill on your desk to stay focused! 

Strategy C: Cash Flow Analysis and Financial Ratios 

We think it is fair to say most of your financial reviews involve looking at your profit and loss statement and balance sheets.  As a reminder, you should also look at your Cash Flow Statement. This statement summarizes the operating, investing and financing activities of your business as it relates to inflow and outflow of cash. This translates to either positive or negative cash flow. With a focus on liquidity rather than profitability, it’s one of the single most important financial tools for your business.  The statement provides a clear picture of how quickly cash is leaving the business compared with how promptly it is coming in.  Have your bookkeeper/accountant provide this statement at least monthly. 

There are two types of financial ratios which generally measure two areas within a company:

• Liquidity ratios indicate your company’s ability to meet current obligations on time. With problems in this area, you have trouble paying your bills on time. It helps identify needs for more capital, more sales, better management or all of the above.
• Profitability ratios measure your performance regarding your ability to generate revenues, net income and acceptable return on investment. 

These are handy tools to use in your business to spot trends both good and bad.  With these tools, you can have a better handle on cash management and forecast the effect on operations and profitability. 

Goal No. 3: Build Long-Term Profitable Customer Relationships
Strategy a: Be the restaurant owner 

In a previous blog, we discussed in length the concept of being the restaurant owner in managing your FBO business.  Simply, this means getting out from behind your desk and managing by wandering around.  Observe the workings of your FBO first hand. Praise your employees for the job they are doing. 

But most importantly, just like the restaurant owner, meet and greet your customers from time to time. Show your CSRs and Line Service personnel, by example, how to create long-term profitable customer relationships by listening to the customer, calling them by name, and above all, thanking them for their business. 

Strategy b: Communicate your Customer Value Proposition 

Do you know what your Customer Value Proposition (CVP) is?  It’s basically what you would tell someone about your business in a short ride on an elevator.  It’s usually no more than a sentence, but it becomes your business mantra, your call to action. 

As an example, here is one we developed for one of our clients, Heritage Aviation in Burlington, VT: 

At Heritage, we are committed to quality service, the comfort of our customers 
and a safe environment for their aircraft…and that’s Service You Can Fly On! 

Not only is the CVP important for customers to understand, it also serves as a short, daily reminder about the level of service and commitment requested of all employees. In other words, it’s a service standard. Don’t be afraid to display the CVP in your FBO, publish it on your website and post it on your Facebook page. 

Strategy c: Don’t forget the Cheese! 

One of the customer retention strategies we touch on at our FBO Success Seminar is the concept of developing a memorable way for FBO employees to deliver an exceptional customer service experience. While most FBOs don’t tolerate mishaps on the ramp, why should they tolerate miscues with customers? 

By standardizing your customer service training, you can consistently meet the needs of your customers, increase retention, and build the long-term profitable relationships you value. 

At Aviation Business Strategies Group, we’ve developed a standardized training approach we call Don’t Forget the Cheese!  

Simply, it’s a memorable way to help employees remember to do the simple things, like smile, even when they answer the phone; be professional yet personable; and above all, add a little something extra to each transaction. That’s the power of not forgetting the cheese! 

Read Part 1: Our FBO Business Outlook for 2012
Read Part 2: Decreasing FBO Costs 2012

Let us know what you think!  Please email John Enticknap at jenticknap@bellsouth.net or Ron Jackson at ron@thejacksongoup.biz. 

Ron Jackson
Ron is Co-Founder of ABSG and President of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese! the ultimate FBO Customer Service Experience. 

John Enticknap
John founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series. 

Decreasing FBO Costs in 2012

Cash Flow and Controlling Expenses—Managing Your Business
(Part 2 of a 3-Part Series: Planning a Successful 2012 FBO Business Strategy)

By John L. Enticknap, Aviation Business Strategies Group

 The buck stops with the guy who signs the checks.
                                                                —Rupert Murdoch 

In the first installment of this series, we discussed our FBO Business Outlook for 2012. At the recent NBAA Schedulers & Dispatchers Conference held in San Diego, we had a chance to discuss this outlook and the current business climate with a number of FBOs in attendance.

Many we talked to agreed with our forecast of a slow uptick of around 2.5 percent average industry growth in 2012, with some individual FBOs experiencing up to 5 percent growth or even possibly more.  We met a number of FBO owners and managers who indicated they were ahead of the 2.5 percent growth rate for 2011 and expect to do better than the 5 percent growth projection for 2012.  And of course, some indicated 2011 was a flat year and they didn’t expect to do much better for 2012.

For this installment, part two of our three-part series, we want to discuss ways FBOs can better manage and even decrease their costs in 2012.

At our National Air Transportation Association (NATA) sponsored FBO Success Seminars, we talk in-depth on ways to generate more bottom line revenue. From growing fuel margins to lowering credit card interest rates, we analyze every operating element in order to maximize the efficiency of each transaction.

The basis for these seminars is our Aviation Business Strategies Group proprietary 10 Steps to FBO Success. You can review these steps on or website www.ABSGGroup.com.

For the purpose of this blog post, we will concentrate on the subject of Cash Flow.

Cash is King

Most business managers or consultants will tell you , “in my opinion, your business can increase cash flow by 5 to 10 percent by reducing operating costs.” Or maybe the “big boss" simply tells you to reduce costs—then walks away!!

The obvious way to do this is to cut overhead and the easiest way to cut overhead is to cut back on the number of employees. However, if you read one of our earlier blogs on this subject, you would understand why this is not such a good idea. 

Instead, let’s look at your cash flow situation as one way to better manage your costs. Not to overstate the obvious, but cash is king. Without cash you can’t pay your employees or pay your bills! And depending on your credit situation with your fuel supplier, you may have to pay cash for your fuel deliveries.

Interestingly, a survey completed in 2009 by Intuit (the software company that makes QuickBooks) indicates that 22 million small businesses have overdue accounts for at least $1,500. That equates to 33 billion dollars in overdue cash!!

Cash Flow Case Scenario

Consider a hangar tenant with an overdue payment of $2,500 for a one-month rental. However, the tenant has not paid their hangar bill for 60 days and you’re now owed $5,000.  (To make things worse, in good faith, you originally gave the customer a discount on the hangar in exchange for fuel sales this new customer would generate.)

Your accounting procedure calls for 30-day terms but you really didn’t worry about the bill until it hit the 60-day period! So after 60 days you are really owed $7,500 because you’re tenant is now behind two months, plus the current month you just billed. By the time you collect the original $2,500, the overdue amount can easily be five to six months past the original due date, which means the amount due should really be $15,000. Overdue accounts mount up fast!!

No one wants to offend a customer, or so goes the conventional wisdom. But we need to get over that notion. It is outdated and not part of today’s competitive business environment. You may fear hurting the feelings of those who owe you money, but you don’t need them for new business. That’s because they haven’t even paid for the old business! A business transaction is not completed until you get paid and the money is in the bank.

So what do we do about our overdue hangar tenant? As the owner of a multimillion dollar aircraft, one would think our hangar tenant is a business savvy corporate owner and is familiar with large financial transactions, borrowing money, and paying on time. So find out who pays the bills. Most likely it is not the pilot, although he may approve them.  Talk to the CEO or the CFO, the person who signs the checks. It does no good to just talk to the pilot, who has no authority to sign the check. Just like our quote from Rupert Murdoch—the buck stops with the guy who signs the check!

Don’t be concerned with threats like “I’ll take my airplane to your competitor,” or ”I won’t buy any Jet A,” or “I’m leaving,” etc. This so-called customer is not really a customer because they don’t pay their bills.  By the way, they’re most likely not purchasing any fuel either.  If you have to, park the aircraft in the back of the hangar and demand full payment with a certified check or wire transfer. You can then move on to the better customers who value quality service at a fair price. 

Want an idea to get attention for overdue bills? Rather than send these delinquent customers a regular overdue invoice notice, send them a vacation-style postcard. Put on it, “Wish we were here, but we can’t afford it since you haven’t paid your bill.” The card is public while it goes through the mail system of the company—it will get attention.

Collect your money—stay in business for the real customers.

Expense Management

How about expenses? It’s easy to say, let’s cut 10 percent!  I’ve had bosses tell me that, or call me and say, “cut 5 percent of your employees.” This is no way to run a business.

When it comes to expenses, look at Zero-Based Budgeting. Zero-based budgeting requires that your budget requests be re-evaluated thoroughly, starting from the zero-base. This process is independent of whether the total budget or specific line items are increasing or decreasing.

Another tool is to competitively bid all your expenses. For example, simple office supplies purchases. Put a list together of what you need and send an e-mail or fax to all your local suppliers, like Office Depot, Office Max, Staples or better yet, your local small business office supply firm. They all want your business.

Note: Take the lead from your own customer base. Aren’t they seeking the best deal on fuel prices every day? You need to do the same thing with your vendors.

Here are a few actions you can take to cut expenses and maximize yours profits:

• Put your own expenses up for competitive bids and use your best judgment
• Create a monthly expense budget and stick to it
• Never let expenses become routine
• Benchmark your expenses to see trends from various vendors
• Put systems in place to control expenses
  • Set approval levels by expense category and employee
  • Set the authority to approve all expenditures
• Watch expenses by adding and tracking three key financial metrics weekly in your flash report
  • Cash Balances
  • Payables Balances
  • Receivables Aging 

Management Flash Reports

Now let’s talk about your Flash Report, Dashboard or Daily report, whatever you call it. First and foremost, you should have a Dashboard Report you can refer to in order to get real-time information on the metrics of your business. We discuss this in detail in our FBO Success Seminar.

Your report should include fuel pumped on the previous day, MTD and Budget MTD. It should also include the productivity of your maintenance shop, charter department and flight school. In addition to the financial metrics we mentioned above, you can include other easy to print reports from your accounting system. Let your bookkeeper be your “virtual CFO” who can regularly produce these reports—on-demand and without visiting your office.

Are your eyes on the money? If not, how can you be sure that you’re making any?
                                                                                                                —Sam Frowine

Next in the Series:
Part 3: Increasing FBO Productivity in 2012

Read Part 1: Our FBO Business Outlook for 2012

Let us know what you think!  Please e mail us at jenticknap@bellsouth.net 

Ron Jackson
Ron is Co-Founder of ABSG and President of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese! the ultimate FBO Customer Service Experience. 

John Enticknap
John founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series. 

Planning a Successful 2012 FBO Business Strategy: A Three Part Series

Part 1: Our FBO Business Outlook for 2012

By John L. Enticknap and Ron R. Jackson, Aviation Business Strategies Group

 Get your facts first, then you can distort them as you please.                                                                                                                                          —Mark Twain 

Recently we received a call from one of the major business aviation publications asking for our outlook for the FBO business in 2012. As writers, practitioners and consultants to the business aviation community, we are often contacted by the aviation trade press for our views on various industry subjects.

We have our ears and eyes glued to the FBO market, and recently completed one of our FBO Success Seminars for the National Air Transportation Association (NATA), so we have a pretty good pulse on the health of the industry.

Looking into the FBO Crystal Ball for 2012

First of all, in today’s political environment—especially with an election year upon us—it’s hard to get a good read on what’s going to happen in 2012 on a national level that will affect our FBO industry either positively or negatively. If you’ve watched any of the debates, you probably think ‘ol Mark Twain hit the nail on the head. You might as well wet your finger and hold it up in the air to see which way the economic wind is going to blow.

We can start by turning our attention to the cost of fuel because it’s one of the most watched components to running an FBO. 

For 2011, the Platt’s (what fuel suppliers use to price Jet A) pricing index at the beginning of the year saw the Gulf Coast Pipeline Mean (GCPM) at $2.4738. By the time December rolled around, the GCPM posting was $2.4866 with the highest price occurring in May, when the GCPM topped out at $3.3239 per gallon. It is interesting to note that in the first week of 2012, the Platt’s index is up a little over 7 cents per gallon. 

For 2012 we think it’s fair to say fuel prices are going to remain somewhat volatile and a range of $2.50 to $3.00 per gallon is going to be the norm. With nothing new to report on that front, expect more of the same general course for 2012. (Of course, a caveat is that the world economic situation needs to remain reasonably stable.)

Outlook for FBO Operations

As to actual operations, the best information comes from the FBOs themselves without all the filters from so-called experts.  As mentioned, we recently completed another effective FBO Success Seminar in November. We gained a wealth of data from a diverse group of more than 25 attendees representing 20 various sized FBOs.

So what did they have to say?

They all experienced a reasonably stable business environment in 2011 with incremental growth in fuel sales as well as solid aircraft maintenance bookings. If you were to benchmark their growth with the National Gross Domestic Product (GDP) index for 2011, you would see similar numbers to what the attending FBOs experienced, which is a 1.9% increase on average.

Historically, the FBO business suffered significant lows in the 2008/2009 timeframe and since that period has seen small but steady growth. Of course, we’re still seeing some industry fallout from those lean and tough years, so keep in mind FBOs will not be getting back to the 2007/2008 business levels in the near term. This, again, tracks national business trends.

The Market for New Aircraft

Another leading indicator for aviation business recovery is industry forecasts for new business aircraft sales. Traditionally the demand for new aircraft picks up when companies operating business aircraft start to fly more hours and thus feel the need to either replace or expand their current fleet.  Obviously, more flying hours equals more airplanes on the ramp equals more fuel sales. So tracking new aircraft bookings is a good idea.

Both Forecast International and Honeywell do not predict business aircraft sales to return to 2008 levels (1,313 units sold) until 2018! However, just for reference, the business aircraft production forecast for 2011 was 683 units with a rise to 728 units for 2012. Again, only a slight uptick, but an incremental increase is better news than a recessionary market.

The companies attending our FBO Success Seminar had similar concerns for the coming new year. They are not expecting anything new or earth-shattering that would help increase business growth.

Other Areas of Concern

Besides a less than robust business environment, the FBO community also has concerns about other areas which might adversely affect their profitability. These concerns include national business trends such as increasing regulations from the EPA and FAA; increasing labor costs including healthcare; and a national election year leading to sustained political gridlock.

In addition, FBOs are concerned about a potential trend of airport boards and authorities getting into the aviation service business and competing against existing firms, or not extending leases with reasonable terms.

So what’s our 2012 FBO business prediction? If your FBO sales increase 5 percent, you are a star! Based upon what the general business trends seem to be, a 2 to 2.5 percent increase would appear to be normal business growth. At the same time, most FBOs will not be adding new employees but instead replacing those lost to attrition. In addition, cost control will remain a high priority as will be increasing productivity. (Stay tuned for Parts 2 and 3 of this series for more on that.)

What about the big FBO networks? In 2011, every chain made some major expansion moves and worked to increase efficiency. (Signature just announced another FBO acquisition as we go to press.) It is reasonable to assume the chains will continue to consolidate the FBO industry. Remember, our national FBO industry includes fewer than 3,000 FBOs while the FBO chains combined represent a group of about 250 locations. Consequently, plenty of acquisition targets remain.

Decrease in Number of FBOs

Another industry trend we should all be concerned about is the continued loss of FBOs within the US. The most recent NATA Fact Book indicated in the year 2009 there were 3,138 FBOs in the US. In November 2010, that number decreased to 2,987. Now, at the end of 2011, there are reports of three more FBOs going out of business and no doubt there will be more to come. Will this be a continuing trend?

As mentioned earlier, there is still fallout from the massive 2008-2009 downturn coupled with the continued unsettled economy. In addition, bank loans have been called, credit has been tightened, leases have not been renewed under reasonable terms, and, to a minor extent, FBO consolidation continues.

Unfortunately, the business pressures FBOs have been under will continue in the coming years and managing a profitable FBO won’t get any easier. However, there are things we can do to affect the bottom line by decreasing costs and increasing productivity. Parts 2 and 3 of this series will discuss these opportunities.

Next in the Series:
Part 2: Decreasing FBO Costs in 2012
Part 3: Increasing FBO Productivity in 2012

Let us know what you think!  Please e mail us at jenticknap@bellsouth.net 

Ron Jackson
Ron is Co-Founder of ABSG and President of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese! the ultimate FBO Customer Service Experience. 

John Enticknap
John founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series. 

Not All Customers are Created Equal

Or, Sometimes You’ve Got to Tell Them How the Cow Ate the Cabbage!

 By Ron Jackson

 Recently we completed our fall NATA FBO Success Seminar in Atlanta and we had a great turnout of FBO attendees representing locations from as close as the Atlanta area to as far away as Grand Rapids, Michigan, and points in between. We were fortunate to have as one of our sponsors AC-U-KWIK, and Jodi Espinoza made a very informative presentation.

One of our discussion topics at the FBO Success Seminar is how to work with customers who want everything but are not willing to pay for anything. Sound familiar?

The old adage “The Customer is Always Right” is usually true. However, every once in a while you run across customers who break this general customer service axiom. They seem to know everything, want everything, and want it now. Unfortunately, these customers usually don’t purchase a lot fuel, if any. Yet we manage to spend an exorbitant amount of time, resources and energy trying to make them happy.

My business partner in Aviation Business Strategies Group (ABSG), John Enticknap, knows all too well that a customer is not always right, and that sometimes you just have to take matters into your own hands. In one case, the customer was an Army Lieutenant Colonel (LTC) and John was the pilot of a Huey Helicopter doing Command & Control (C&C) reconnaissance during the Vietnam War.

“We were out flying, doing some C&C work, and I kept checking the fuel gauges when the yellow caution light went off indicating 20 minutes of fuel remaining,” John recalled. “I told the LTC we needed to get to the fuel dump to refuel. He said we’ll go in just a minute.” 

Warrant Officer John Enticknap, center, with his Huey Crew in Vietnam, 1969John said five minutes went past and they’re still on the C&C point, and so he reminded the LTC of the fuel situation. “Just give me another minute or two and we’ll go,” the LTC told John.  After five more minutes, John told the LTC “We need to go now,” pulling the ship’s nose around for a dead-head run to the fuel dump, while the LTC was yelling expletives from the rear of the aircraft. 

“As we approached the fuel dump, I radioed for a direct approach instead of the customary routing,” John said.

 “Good thing. We were flaring to a landing point, and we’re about 10 feet off the ground when poof, the engine quit and we went straight down doing a hovering autorotation.”

“What the heck happened?,” the LTC exclaimed, picking his jaw up off the floor of the Huey. “We ran out of fuel, sir,” John exclaimed.

After refueling and going back on C&C again for another two hour sortie, John told the LTC it’s time to get fuel. To which he replied, “Let’s go now…I can’t handle another one of them landings.”

Of course, this is an extreme situation, but as my dad always said, “sometimes you just have to tell someone how the cow ate the cabbage.” (Read the origin here.)

I wasn’t sure about the origins of this saying, but the way Dad used to say it, I knew exactly what he was talking about. Sometimes, you just can’t afford to put up with all the nonsense. 

When John was President of Mercury Air Center’s chain of FBOs, he would tell his General Mangers not to put up with the non-paying habitual complainers. “It’s not worth it,” John explained. “I told my GMs to invite these types of customers to take a walk across the field. These folks are not really customers. I’d rather have my competition deal with these types of individuals so I can concentrate on wowing my really faithful, as well as profitable, customers.”

Giving up a customer sounds contrary to good business sense. But sometimes it is the best business decision. Your goal should always be to seek out and nurture long-term profitable customer relationships. They key word here is “profitable.“ 

I'd like to hear from you regarding how you handle these types of customers. Please email me at Ron@thejacksongroup.biz

Ron Jackson
Ron is Co-Founder of ABSG and President of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of “Mission Marketing: Creating Brand Value” and co-author of “Don’t Forget the Cheese!” the ultimate FBO Customer Service Experience. 

Your Airport Lease: The Lifeblood of Your FBO

by John L. Enticknap

If you build that foundation… the business foundation, and the experience foundation, then the building won't crumble.—Henry Kravis

Like most FBO owners and operators, you probably wonder what your FBO is worth. To answer this question, you should start by asking another important question: What is my lease worth? That’s because they are inherently linked. 

If you are thinking about capitalizing your investment or looking to sell your business, the first thing a banker or a buyer will assess is the value of your lease, especially the length and terms. 

That’s why it’s such a critical component when figuring the intrinsic value of your FBO. You may have just put millions of dollars in building a fantastic infrastructure, but unless you have negotiated a long enough lease to amortize your investment, it’s easy to get upside down with little or no wiggle room. 

With a long-term lease of at least 20 or more years, you have great value. However, if you have less than five years you have little or no value. 

(Side Note: One of our most popular courses we conduct at the NATA FBO Success Seminar is “Developing a Favorable Airport Lease”. During this session we discuss many of the important elements of an FBO airport lease agreement. If you’re interested, the next one is in Atlanta November 8, 9 and 10. Contact NATA at www.nata.aero and look under Events, or call 800-808-6282) 

For the purpose of this blog, let’s hit a few of the highlights we discuss in our seminar.  

Length of Lease

First and foremost, the longer term you can negotiate the better. Let’s say you have negotiated a 20 or 25 year lease. You should also negotiate at least one additional option period of five years; two option periods would be even better. The goal should be to have at least 30 years on your lease including the option periods.  

It is not unusual to get longer terms at some airports for large investments in facilities. I’ve seen leases of 40 and even 50 years. ‘The Longer the Better’ should be your mantra. When you are negotiating lease extensions, try to get at least back to this sort of term. You’ll need it to finance capitol projects and have a reasonable depreciation term.  

However, in order to get this type of long-term lease, be prepared to invest in facilities and/or upgrades. Traditionally, the length of term is commensurate with a larger capital investment. 

Big/Commercial Airport Lease Terms 

So why are the big airports giving only five year leases and reliever and general aviation (GA) airports giving longer term leases?  

During the recently held Airports Council International (ACI)–North America meeting in San Diego, there was a session titled “Fixed Base Operators and Airports—Strategies for a More Successful Partnership”. A detailed discussion was conducted concerning lease term length. It seems there have been some divergent opinions between some airports and FBO’s concerning lease terms.  

At a few large airports, five year leases are all that have been granted. Some of the new FBO leases, included existing facilities, have high rental rates and gross revenue fees being paid to the airport authorities. In many of these cases, renovation of existing facilities was all the capital investment required by the FBO. Not surprisingly, General Aviation activity at these selected airports was not the priority for the airport authority. That’s because commercial airline operations took precedent at the vast majority of the operations. 

In all appearances, both the FBO community and the airport community had a very open and fruitful discussion at the ACI conference. The results being that both parties appear to understand the lease term issues from each other’s perspective.  

For the predominantly General Aviation airport sponsors, both parties understand that to get infrastructure built, a long-term lease is required. Fortunately, this was not difficult to appreciate. 

During a recent meeting I had with one Airport Director, he fully understood the issues for the FBO. He realizes that for the FBO to be successful--to provide the high quality services that the airport and customers desire and make a reasonable profit--the FBO must have a good lease with a good term.  

This practice will attract superior FBO operators who can make capital investments in hangars, new business operations and employees.  

The All-important Minimum Standards Clause 

This same airport director also mentioned that one of his first priorities, before commencing lease negotiations with an FBO, was the development of new up-to-date Minimum Standards provision to be inserted into the new lease. 

I’m sure that many (most) FBO operators have Minimum Standards written into their lease—at least we hope you do. Minimum Standards are your basic protection for your business. In addition to your lease, they allow your FBO to operate within defined parameters.  

Minimum Standards allow you to know

• What services you must provide 
• What services you may provide
• What defines a full service FBO  
• What your investment and facilities requirements must be  

More than what defines your business, Minimum Standards protects your business from inequitable competition. If another FBO wants to operate at your airport, they must provide the same services, the same investment and the same facilities.  

Since 1938, Congress has passed laws to improve safety and efficiency at Airports by, among other things, promoting competition among aeronautical users. This includes FBOs.  

In order to promote competition, the Sponsor Assurances lease provision prohibits any party from obtaining or maintaining an exclusive right to perform services at an airport, and requires Airport Authorities (also called Sponsors) to not unjustly discriminate against aeronautical users of the airport. Minimum Standards, therefore, are your safeguard. It allows for fair competition and makes sure that your FBO will continue to be successful. 

Other Lease Issues 

These two issues are just examples of important items an FBO lease covers. Here is a list of other issues we cover at our FBO Success Seminar regarding leases:  

• Term and option years
• Operating rights
• Payments: rental, gross revenue and out years to include escalators
• Building/ramp maintenance responsibilities
• Assignment-sale clause
• Termination-from FBO and Lessor
• Non-discrimination clauses
• Improvements, new buildings, renovations
• Insurance, Indemnity, Hold Harmless
• War & National Emergency
• Right of  Entry
• Environmental Liability 

The airport management and the FBO owners make success together for their mutual benefit. As we mentioned in our premise, the lease is your foundation, your value in the business and ultimately your protection. 

If you have a particular question or would like to discuss a lease issue, please let me know. We would like to hear from you. Contact me at jenticknap@bellsouth.net

John Enticknap

John Enticknap founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series.

What’s Your FBO Insurance Story?

A better way to impact your bottom line!

Insurance for FBOs is a necessary business expense with a huge impact on your bottom line. Wouldn’t it be nice if you could effectively manage this activity and even reduce the expense?

This is one of the subjects we cover in detail at our next NATA sponsored FBO Success Seminar, scheduled for November in Atlanta. However, for now, here are some ideas you can incorporate into your business. 

If you’re a medium-sized FBO, we would not be surprised to hear that you are paying $1,000 per day for your insurance package. This is one of your more critical expenses; the one you pay all the time and hope you never have to use. So what can you do to actively manage this activity, not to mention the expense?

One of the key points is get to know your insurance broker on a first name basis. You need to get to know your broker. Have your broker visit your FBO, not just at renewal time, but at regular intervals. It’s your broker who can be the person who saves you money.

Yes, your insurance broker makes a fee off your insurance, but you have to establish a level of trust. That’s because one of your broker’s major jobs is to tell the insurance underwriters about your business, including the risks, accident history, training programs and your plan to manage those business risks.

Step 1

The key to your broker’s better understanding of your businesses begins with developing what we call Your Insurance Story. A main ingredient of your insurance story is establishing a comprehensive preventative safety and training program. Yes, it is more than just training your line service technicians in fuel quality control or fuel and ramp operations.

Whether you use the NATA Safety 1^st program or another program, it’s a first step in the development of a strong company culture fueled by constant operational improvement and active participation to reduce risks.

Step 2

So how do we put this important first step into action?

• Senior management must have a sincere commitment to establishing an active risk management program.
• Pick a training program and stick with it—don’t just teach it, put it into practice.
• Assign the training responsibility to active-hands on employees
• For Line Service—assign a Senior Experienced Supervisor.
  — The Customer Service component must have its own training program.
  — A&P’s must have more than technical training; they also need customer interaction skills.
  — If you employ Pilots and/or Flight Instructors, they need to be intimately involved in your training
      programs. Flight Operations insurance coverage is some of the most expensive in your insurance
      package. 

Step 3

For the third step, you need a good internal audit program. There are many tools out in the industry which can assist you in developing an internal audit program.  This is where your training programs are tested, your employees are seasoned and the company’s policies are validated. Where do you get an internal audit checklist? Talk to your insurance broker or talk to the fractional aircraft operators. For instance, NetJets’ web site posts the FBO Standard of Service document (www.suppliers.netjets.com)

Then follow these steps:

• Review your training program and develop your own checklists.
• Talk to your insurance underwriters.
• Conduct selected internal audits at least quarterly.

Step 4

As part of your good operating practices, you should have, or be willing to develop, a Standard Operating Procedures (SOP) guide. I know, you’re a small company and you don’t want any of that “big company” and “big bureaucracy” feel in your own firm. In plain terms, you want to keep it simple!

However, in the aviation world, you need to operate a tightly run ship. It is a precise business, involving the care of multimillion-dollar aircraft. Therefore, you have to use standardized procedures.  The checks and balances that are built into aviation are what keep our operations safe.  

No matter what size your company, use standard training and operating procedures. This is no different than the standardized accounting practices that you must use to keep your books, file your taxes and pay your bills. What happens on your ramp needs to be standardized also!

So what will keep your insurance broker happy and also allow you, as the manager/owner, peace of mind? It’s knowing that your firm is operating well, even when you’re not in attendance.    

Step 5

You need to conduct regular external audits. Internal audits are not enough.

• The company needs an unbiased “third party” audit.
• It eliminates the “fudge factor.”
• It provides a true evaluation and validation of your own internal audit program.
• It helps build insurance story to brokers.
• It results in lower premiums, fewer costly accidents.

Your employees, probably the most important part of your safety program, need to have guidance and empowerment to have the confidence to enforce good operating practices.

Step 6

Therefore, give the power to your employees to enforce the standard operating practices. If they see unsafe operations, they should have the power to stop those operations.

As the old saying goes, “do it right the first time.”  For example, your SOP requires that you have a tug driver and two wing men to tug an aircraft out of a hangar.  On Sunday morning, a customer wants his aircraft and there is only a tug driver available, what does the supervisor do?

If you run a good operation, the aircraft does not get out of the hangar until the SOP requirements are met. Which would you rather have, a damaged aircraft or a customer who can be educated on the correct tugging and towing procedure? An extra employee is less cost to your business than dealing with damage claims.

In addition, your employees need to be recognized for their good works.

• Develop a good rewards program.
• Establish achievable goals and stick to them.  

The Five Most Important Tips for Effective Recognition

• You need to establish criteria for what performance or contribution constitutes rewardable behavior or actions.
• All employees must be eligible for the recognition.
• The recognition must supply the employer and employee with specific information about what behaviors or actions are being rewarded and recognized.
• Anyone who then performs at the level or standard stated in the criteria receives the reward.
• The recognition should occur as close to the performance of the actions as possible, so the recognition reinforces behavior the employer wants to encourage.

So what is your insurance story? It is a concise document that details your actions, training, management culture, audit results and most of all, your accident/incident history. Your investigation of the incidents to find the root cause, and what you’ve done to prevent future incidents: this is what the agents and underwriters want to know. Tell your broker and tell your insurance underwriter(s). 

There are many do’s and don’ts for insurance. But the above actions and efforts will make your company safer and reduce your exposure. And, as a result, you will reduce your claims and reduce your costs. Make sure your employees enjoy the fruits of their labor and reward them.

I’d like to hear from you—email me at jenticknap@bellsouth.net

John Enticknap

John Enticknap founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series.

Use Good Customer Service Ingredients, and the Proof Is in the Pudding

“‘The proof is in the pudding’ is a popular figure of speech meaning ‘the quality, effectiveness or truth of something can only be judged by putting it into action or to its intended use.’” – The Word Detective

We’ve all heard the phrase, the proof is in the pudding. This expression dates back to the early 1600s and is really a derivative of an expanded phrase: The proof of the pudding is in the eating.

This, of course, makes perfect sense because tasting the pudding determines whether it is good or bad. 

And so it is with delivering a great FBO customer service experience. You start with the best ingredients and follow the recipe to success. The recipe is very simple:

• An ounce of sweetness in the form of a sincere smile
• Two heaping tablespoons  of caring
• One generous cup of reliability and dependability
• And a pound of perceived value

Mix completely, and serve.

Now, all you have to do is ask your customers to find out if your pudding — or their experience — is to their liking. That’s why you should have a good way to collect feedback from your customers through a short customer service survey.

When I say short, I’m talking about a maximum of five direct questions regarding your deliverables. Here are some examples:

1. Quality and reliability of line service
2. Accuracy  and dependability of the customer service representatives (CSRs)
3. Timeliness of response to customer service requests
4. Cleanliness of the facilities, especially the bathrooms
5. Evaluation of the value received

Always add what I call the bonus question: Would you recommend our FBO?

This question is really the most important. It is a key customer service metric, and, if you’d like, it is the litmus test of whether your pudding — the customer service experience — hits the mark or needs some extra ingredients.

Another Way to Test Your Pudding

Of course, customers can be too nice at times and might not want to offend you by being overly critical in a survey.

You should also look at a more definitive metric to see if your hard work at delivering an exceptional customer service experience is really paying off.

A loyal, happy customer remains a customer for a greater length of time. So you should be tracking your customers to make sure they are coming back to your facility every time they travel to your destination. You can use a flight tracking service to monitor incoming flights.

Your line service personnel should become familiar with regular customers’ aircraft registration numbers and be alert when tracking inbound flights to your airport and surrounding airports.

If you haven’t seen a regular customer in a while, pick up the phone and call to learn why. If your line service personnel notices a regular customer going to a competitor, again, pick up the phone and find out what you might have done wrong.

Source: Strativity Group, in partnership with Customer Service Experts.Research shows that most unsatisfied customers won’t tell you there is a problem before they jump ship. They simply change their buying habits. So you need to know why they made a change and why they became unhappy with your service.

Loyal Customers Lead to Financial Rewards

As the chart indicates, a happy customer is a loyal customer and stays with you for a longer period of time.  A satisfied customer also tends to spend more and, thus, take on more fuel at your facility.

And oddly enough, a satisfied customer does not need incentives or discounts to continue being loyal. In fact, they do not mind paying a small premium to be treated well.

In the end, the payoff for delivering a truly memorable customer service experience is a contingent of loyal, highly engaged advocates who will recommend you at the drop of a hat.

So it really does pay to include quality ingredients in delivering a good customer service experience. The proof is in the pudding!

If you have some good customer service ingredients you’d like to share, please email me at Ron@thejacksongroup.biz.

Note: This blog was inspired in part by a Bloomberg Businessweek Research Services article titled How to Achieve a Great — and Profitable — Customer Service Experience.

Ron Jackson

Ron Jackson is co-founder of ABSG and president of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese!, the Ultimate FBO Customer Service Experience.

Lessons of $1 Hot Dogs Help FBOs Cut the Mustard

Frankly Speaking, FBO Customers Must Relish Their Surroundings, Be Happy and Perceive Fair Value

As a red-blooded American, I love hot dogs, apple pie and baseball. Being from the Dallas area, I’ve been following the Texas Rangers through thick and thin for more than 20 years. Mostly it has been thin, though the Rangers made it all the way to the World Series last year for the first time in franchise history.

When the newspaper hits my driveway at 6 a.m., I read the sports section from stem to stern and go over the box scores and team stats.

Recently, I read a sidebar article about Dollar Hot Dog Night at the Rangers’ stadium. On Wednesdays when the Rangers are in town, they cook some 65,000 hot dogs for hungry patrons. At a buck each, the promotion attracts a lot of families to the game, and the conies are quickly snatched up!

The Art of the Deal

I’m sure you have your favorite sport, and if it’s baseball, you know how a hot dog with your favorite beverage tastes on a warm summer night around the diamond. It hits the spot! But something else is going on at the ballpark.

In the article, the writer asks a university professor for his opinion on why a $1 hot dog attracts so many to a game when patrons can have all the hot dogs they want for a lot less money by buying them at a supermarket and eating them at home.

His answer, posted in the Dallas Morning News, is what spurred me into writing this blog post.

According to Ernan Haruvy, a management professor at the University of Texas at Dallas, a perceived deal, such as the $1 hot dog, depends on several factors, including:

1. Your physical surroundings
2. The customer’s mood
3. What the customer believes is a fair value for the transaction

OK, that all sounds logical because the customer is at the ballpark; therefore, the surroundings are fun. Secondly, because a day watching baseball is better than a day at work, the customer is probably in a pretty good mood. And lastly, $1 for a dog that usually costs $4 seems like a relatively fair value.

But what does this have to do with an FBO?

Play Ball!

In previous blog posts, Are You the Restaurant Owner; Do You Feel Lucky; and Don’t Forget the Cheese, we discuss what is important to customers when they choose a particular FBO.

First of all, the physical surroundings need to be pleasant enough that they don’t cause a distraction. The ramp and equipment need to be neat and tidy. Line-service personnel should use crisp ushering techniques to guide the aircraft. The facilities, particularly the bathrooms, need to be as clean and sparkling as possible.

Next, from the time the customer comes onto the ramp to the time for departure, it’s everyone’s job to create an atmosphere that keeps the customer in a good mood throughout the transaction. Customers who fly on private and business aircraft are used to getting good service wherever they go.

And finally, when the customer goes to pay the ticket, it’s important that he or she truly believes it represents a fair value. Remember, just because you may have offered a volume fuel discount doesn’t mean the customer flies away feeling like he or she received a fair value.  

For the type of customer that you want to attract and keep, receiving a fair fuel price is just part of the equation. If you failed to deliver an exceptional customer service experience, chances are your facility will not be remembered, and you will not get a recommendation.

So the next time you bite into a red hot coney, remember these three simple principles of pleasing a customer:

1. Maintain good physical surroundings.
2. Keep the customer in a good mood.
3. Give the customer a fair value.

If you have had success in pleasing a customer, please let me know the particulars by emailing me at Ron@TheJacksonGroup.biz.

Ron Jackson

Ron Jackson is co-founder of ABSG and president of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese!, the Ultimate FBO Customer Service Experience.

Reeling in Customers: Either Fish, or Cut Bait

I have returned from a much needed vacation to the Canadian outback where I enjoyed a week of fishing with no phone, TV or newspaper.

Every year, I travel to the far western reaches of Ontario for our annual fish camp outing that has been a part of my family tradition since 1961, when my father first went with his buddies to the same waters we fish today. I started going with my dad in 1984, and now his 16-year-old great-grandson, my grand nephew, is representing the fourth generation to wet a line in these great Northern waters.

On this most recent outing, I started to think about writing a blog post based on the similarities between fishing for dinner and casting a net for new FBO customers.

Planning the Trip

As many times as I have gone on this fishing trip, there is still a fair amount of planning to do. Same goes for developing a sound marketing plan to increase your FBO business.

Blogger Ron Jackson and 16-year-old grand nephew Chas holding a 20-inch Walleye on a Canadian fishing trip.As author Stephen Covey says in his book The Seven Habits of Highly Effective People, you have to begin with the end in mind. Because I’ve been on this trip before and have had success in hauling in some nice fish, I can visualize my goal: A 29-inch, 10-pound Walleye!

Same goes for the FBO business. You know the type of valued customer you want to attract, so you should visualize reaching your goal, whether it’s five more new customers or 50. And you should be updating these goals annually.

Research shows that a business can lose up to 30 percent of its customer base annually due to attrition or churn in the marketplace. Factors include companies downsizing and selling their aircraft; companies going out of business; mergers and acquisitions; new flight destinations; and the worst case scenario, defection — losing a valued customer to a competing FBO.

New customers are paramount to keeping a healthy balance sheet.

Fish or Cut Bait

You have set your goals, you have written your business and marketing plan, and you have followed your map to your destination. Now you have to ask yourself, “Are you going to fish or cut bait?”

Sometimes we can take planning and strategizing too far. We can call too many meetings and second-guess our way to being highly ineffective. As one of my bosses at a Fortune 500 company years ago said, “If you don’t get started, you’ll never finish.”

And so it is with catching fish or a new customer. If you don’t get your pole in the water, nothing will happen.

Years ago, I read a book titled Bunkhouse Logic by Ben Stein. The premise was about the same. You can’t win at anything unless you first get started. You’ve got to start the cattle drive and you’ve got to finish the cattle drive, point A to point B. Also, if you want to win at poker, you first have to get yourself to the table. In other words, you have to get your feet wet and sometimes force yourself to get started.

Using the Right Bait

Catching a good customer on your terms is a far better scenario than catching a customer on his or her terms. Remember the blog I wrote titled Building Long-Term Profitable Customer Relationships, Part 2: Do You Feel Lucky?

In this post, we discussed the danger of attracting the wrong customer by subjectively lowering the price of fuel. Remember, you have to use the right bait in attracting the right profitable customers if you want to keep them for the long-term.

You have to give them a reason for choosing your FBO by providing them with a sense of delivering a real customer value proposition (CVP). For instance, done properly, the CVP can be the right combination of clean and attractive facilities, fair fuel prices and a knock your socks off customer service experience.

Now that is baiting your hook with something more than corn from a can. 

Keeping Your Fish Healthy and Happy

When a person goes to a fish camp in Canada, he is there for primarily one reason: catching fish. So the fisherman is up at the crack of dawn and fishes all morning and then from late afternoon until sunset, which is usually after 9:30 p.m. this far North.

Therefore, having a live well in the boat is a great asset so the fish stay fresh.

So it is with attracting new customers to your facility and keeping them. You have to figure out a way to keep them happy and satisfied while they are in your facility.

In my post Building Long-term Customer Relationships, Part 3: Don’t Forget the Cheese! I talk about delivering a memorable customer service experience that will keep your customers coming back for more. Here is a recap:

The use of Cheese in our proprietary customer service training course serves as a key reminder to CSRs, as well as other employees, to practice exceptional customer service. A few fundamentals of great customer service are:

• Smile. Remember to say, “Cheese,” to yourself, as if someone were taking your photo. Even when answering the phone, put on a smile, and the customer on the other end will sense they are talking to a happy person.
• Add a little extra when delivering customer service. Cheese represents the added touch, the little extra that puts a smile on the customer’s face and makes them keep coming back.
• Remember a customer’s name. In the FBO environment, adding cheese can be as simple as remembering a customer’s name. Most people react positively to being called by their name and are impressed when you remember. Are you the restaurant owner?
• Go the extra mile. Going the extra mile could be something as simple as showing the customer where the pilot lounge is located instead of pointing in the general direction.

If you’ve had success in casting your net for customers, I’d like to hear from you. Please email me at Ron@thejacksongroup.biz.

Ron Jackson

Ron Jackson is co-founder of ABSG and president of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese!, the Ultimate FBO Customer Service Experience.

Deliver Great Customer Service by Practicing Your Craft

“Maybe because I've hit a million balls? … And maybe because I'm dedicated and want it more.” – Vijay Singh, professional golfer ranked No. 1 in the world, 2004-05

Recently, I was reading a newspaper article about the practice habits of professional golfer Vijay Singh, and I thought this would be a good basis for a blog post on delivering the ultimate FBO customer service experience. Perhaps this seems a little disjointed, so allow me to explain.

Whether you follow golf or any other sport, I’m sure you’ve run across articles and have heard TV announcers remark about the successes and failures of professional athletes. Frankly, I like to learn about the elements of success, rather than the failures, so when I read this article on Singh, it reminded me of his breakout year in 2004.

As you may recall, Tiger Woods had vaulted to the top of the world ranking and looked invincible. Then came Singh, playing like a man possessed, and he eventually replaced Woods as the No. 1 ranked golfer in the world, at least for a period of time. He openly admitted that his goal was to become the No. 1 golfer in the world, thus replacing Woods, and he knew it would take long hours of practice.

Even Madison Avenue took notice that year. Singh appeared in a TV commercial where he was shown practicing putting on a frozen lake in Alaska while native Eskimos looked on in bewilderment.

And what was the message the commercial was trying to drive home? What made Singh so successful?

Dedication to Practice

The answer, of course, is being good at what you do by practicing your craft. In Singh’s case, it wasn’t just an hour here and an hour there but a wholesale dedication to improving his game through countless hours of practicing, practicing and still more practicing.

Everyone in the golf world was talking about it. Other players took notice, and his work ethic became legendary. As the old joke says, if you looked up the word practice in the dictionary, there would be a picture of Vijay Singh.

As part of our NATA-sponsored FBO Success Seminar, we teach a course on delivering the ultimate customer service experience. Called ”Don’t Forget the Cheese!” we use what we call Cheese Bites to help illustrate various good customer service habits.

One of these Cheese Bites is Practice Your Craft. Like an actor who must perform well on a stage, customer service staff are also on stage every time they put on their uniform and enter the FBO terminal  arena or greet an aircraft on the ramp.

The whole process of delivering a great customer service experience needs to be a well-orchestrated performance, practiced over and over to ensure the safety of not only the customers, but the FBO staff as well.

What Pilots Want from an FBO

At Aviation Business Strategies Group, we’ve conducted many FBO surveys to find out what pilots and dispatchers want most from an FBO. What pilots say is they know whether or not an FBO will deliver a good customer service experience the moment they pull off the taxiway and onto the ramp. If the line service personnel are not on the ball and looking sharp, they know the rest of the turn will be disappointing.

It’s called a first impression, and if an FBO is not practicing the art of delivering a good first impression, the rest of the customer service deliverable is lost!

It all starts with the way the line service crew ushers in an aircraft. Here’s where practice comes to bear. First comes a firm grasp of the wands, followed by crisp movements of the arms and a precise motion signaling the pilot to stop the aircraft at a designated spot on the ramp.

Then, the rest of the crew springs into action by carefully placing orange safety cones according to the SOP manual. Once the passengers disembark, the baggage is swiftly unloaded and placed into the waiting limo, which is then safely escorted off the premises.          

At the proper moment, the lead line service person (or CSR, depending on how you’re organized), approaches the pilot in command and reads back the order information previously sent to the FBO by either a phone message, fax or email. What pilots don’t want to hear is: “Howdy, how can I help ya?” Especially if they took the time to send in an order for service ahead of time.

Remember, You’re On Stage

While at the driving range with with another golfer who had grown frustrated with practicing, Singh admonished the other golfer. “That's your problem,” Singh said. “You won't work at your game enough to be as good as you could be.”

No matter if you are a professional athlete, a line service technician or a customer service representative, practicing your craft is an important element to having a successful career. Remember, when you put on your uniform and hit the deck, you’re on stage, and every customer is watching how you, and your FBO, perform.

If you have any tips or stories to pass along on delivering a great customer service experience, please email me at Ron@thejacksongroup.biz.

Ron Jackson

Ron Jackson is co-founder of ABSG and president of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese!, the Ultimate FBO Customer Service Experience.

Is Your Cost of ‘Plastic’ out of Control?

Get a Grip on Credit and Debit Card Fees!

"The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic." – Peter Drucker

One of our more popular courses at our FBO Success Seminar is Maximizing Your Credit Card Transactions. We discuss in detail the credit /debit card processing system and how it affects your FBO business. Needless to say, the cost of this vital service is substantial and increasing.

Debit Card Update

First, let’s take a look at the use of debit cards. In the process of updating our seminar course materials, I’ve been researching the recently enacted regulations by the Federal Reserve to reduce debit card interchange fees. Here’s a little background information.

The new laws are still being written and are scheduled to be completed by April 21 with an implementation date of July 21. The laws change the fees from percentages to fixed fees. Some efforts in Congress may further delay the implementation or change the regulations.

Currently, debit card swipe fees average $0.44 per swipe. The new requirements reduce them to $0.07 to $0.12 per swipe. The banking and credit card industries are not in favor of the new requirements because they stand to lose some $12 billion in fees; therefore, they are lobbying Congress and others for changes.

As an example of the impact this would have on a retailer, look at The Home Depot’s operations. If the debit card fees are reduced as planned; The Home Depot will see a reduction of $35 million in debit cards costs. Obviously, the average FBO doesn’t have the volume of debit card transactions of a large box retailer, but we’re talking about potential savings over the long term and revenue to your bottom line.

A Look at Credit Card Fees

Regarding credit card fees, each transaction fee in the FBO business varies greatly. The fee can be zero for your branded oil company card to a high of four percent of the transaction. During the classes we teach at the FBO Success Seminar, we provide a detailed analysis of fees, but for now, here’s a look at an example of an average transaction:

First of all, the current national average cost of Jet A is $5.38 per gallon. Based on the Platts index, this average is an increase of more than 92 cents per gallon in only the last six months. For the FBO operator, this adds up to an increased credit card transaction charge of just over $0.02 per gallon or a total of $0.11836 per gallon, assuming the average fee is 2.2 percent. Under this scenario, a 500 gallon sale would result in credit card fees totaling $59.18, which includes an increase of $10.02 in extra charges resulting from the rise in fuel costs over the past six months.

We would venture to say that credit card fees are a bigger portion of your costs than you imagined!

If you are selling 1.5 million gallons a year at $5.38 per gallon, your annual credit fees will be $177,540. In this scenario, your credit card fees have gone up approximately $30,360 per year, based on recent fuel price increases.

Bottom Line

Here is the bottom line: The credit card processors are profiting during this crazy volatile spike in fuel prices, and the FBO is not! So what do we do?

The first step is to look at your processing fee costs and where the fees are being generated. Start by analyzing your sales and payment history:

• Retail sales and payment by what credit card or debit card?
• Factor out no-fee cards such as oil company cards.
• Factor out contract fuel sales. (By the way, are you getting paid promptly by the contract supplier?)
• Take a look at based customers vs. transient customer sales and payments.

Once you have completed your research, look at changing customer buying/payment habits, — not an easy task!

• You should want all your base customers paying with a no-fee oil company card. If they don’t, figure out an incentive to make this happen.
• For your transient customers, you should train your CSRs to ask for no-fee cards for payment.
• Make sure your contract fuel suppliers are paying you quickly and within contract terms. If they are late paying or otherwise, you need to rethink your contract fuel supplier relationships.

As your business changes with all the turbulence in today’s marketplace, you need to analyze all of your cost structure. Credit card fees are sometimes a cost we think we cannot manage. Not true!

With the tools and ideas we have presented here, these costs can be reduced. As Peter Drucker indicates in his quote, new thinking is most important in business, not only for this issue, but for all your business management concerns.

Let us know your thoughts on this issue or any of our FBO Connection blogs. Please contact me at jenticknap@bellsouth.net.

John Enticknap

John Enticknap founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series.

FBO Customer Expectations: How High Should You Set the Bar?

“Start early, and begin raising the bar throughout the day.” –Bruce Jenner, Olympic athlete

Is the level of customer service expectation set high enough at your FBO? Does it meet or exceed the standards of the industry, or are you doing just enough to get by?

Recently, I was reading a customer service-related blog titled: “Did You Know You’re Competing with Apple?” The premise piqued my interest. Could it be possible the level of service a customer expects to receive at an FBO can be properly compared with the expectation of service offered by the top brands in their respective industries — companies like Apple, Virgin America and Amazon?

I was hooked on the notion. So I read on, and the more I thought about it, the more it made sense. Customers who walk into any FBO have already been exposed to the highest level of customer service possible because they are all consumers. They probably have been exposed to how Apple can make the mobile computing experience easy. Or to the way Amazon aids online customers in the selection process and then delivers the product in the blink of an eye.

I was on board when the blogger mentioned how Virgin America can customize the in-air experience by delivering food and in-flight entertainment the way you want it when you want it. So I reasoned, why can’t professional pilots and crew members expect a similar level of service when they deliver a CEO to his or her destination?

What Pilots and Passengers Expect

Remember, your customers, the pilots and crew members, have customers of their own. They’re the VIP passengers who are often the most well-heeled, high-net-worth individuals on the face of the planet.

You think an FBO manager’s job can be tough? Try keeping track of what each passenger likes to read, eat, listen to and watch. And, oh, by the way, remember to be the passenger’s confidant, and know their family history and names of children and pets. And while you’re at it, fly the airplane flawlessly!

Passengers on business aircraft are used to receiving the highest levels of service available. They dine at the finest restaurants, golf at the nicest country clubs and vacation at the swankiest resorts. Do you think their customer service bar is set high?

So once the world’s movers and shakers are carefully transferred from the comforts of the jet cabin to the perfect 72° interior of a waiting limo, what level of customer service should the crew expect when they set foot inside the FBO?

Hopefully the answer is the same level of service they just gave their passengers. Anything less is simply unacceptable.

As an FBO owner or operator, you can do several things to instill in your employees the level of service you would like to see and customers expect. One suggestion is to take small groups of employees, on occasion, out to eat at a very upscale restaurant. Let them see firsthand how a high level of service is delivered.

Maybe once a month, or once a quarter, reward an employee and his or her spouse with a night at the best hotel in the area. Have them take mental notes of the level of service and share their experience with the rest of the customer service team.

Occasionally issue a gift certificate to a deserving employee for a day at a spa at an upscale resort. The experience will probably transform the employee in a positive way.

What are you doing to raise the bar of customer service expectation at your FBO? I’d like to hear from you. Ron@thejacksongroup.biz.

Ron Jackson

Ron Jackson is co-founder of ABSG and president of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese!, the Ultimate FBO Customer Service Experience.

The Cost of Aviation Fuel

Why is the price continuing to increase, and what can an FBO do?

“Business, more than any other occupation, is a continual dealing with the future; it is a continual calculation, an instinctive exercise in foresight.” – Henry R. Luce

We think it’s fair to say we are all feeling the impact on fuel price increases over the last six months or so. As a pilot, I’m seeking the best fuel price and am modifying my flying patterns to get the best deal.

Historically, after an initial spike in oil prices, the market tends to settle down. So why haven’t we seen a stabilization in Jet A fuel prices? What’s causing the volatility in the open and spot fuel markets?

Besides the obvious affects of world events, including the disaster in Japan and political upheaval in the Middle East oil-producing regions, there are other underlying dynamics that contribute to rising aviation fuel prices.

What Others Are Saying

Let’s review a few articles that have been written lately.

• “Angry Over Oil Prices? Demand A Change In Fed Policy” by Charles Kadlec, Forbes Magazine 
• “Oil Spike Prompts Airline Profit Fears” by Jens Flottau and Madhu Unnikrishnan, Aviation Week  
• “Make Your Fuel Fly Farther: Strategies That Can Save You Money,” published by the National Business Aviation Association (NBAA) 

As discussed in Charles Kadlec’s article, the current Fed policy of keeping the value of the dollar low in the international markets is one of the main influences. Because it takes more dollars to buy a barrel of oil, the low dollar value pressure drives up the costs. It’s not necessary to review the entire article here, but suffice it to say the continued low value of the dollar is not going to reverse anytime soon.

In the article “Oil Spike Prompts Airline Profit Fears,” the authors discuss in detail the increasing cost of fuel and its effects on the airline industry. The airlines anticipated the increasing cost of fuel to be in the $75 to $90 range, but now a barrel of oil costs more than $108 this week. The economics of the airlines are such that a $1 increase in the price of a barrel of oil will increase the costs to the airlines more than $1 billion in a year.

As a result, the airlines are looking at a $10 billion cost increase in 2011 with fuel costs, on average, representing approximately 29 percent of the airlines’ operating costs. In order to gain back revenue, airline ticket prices are going up. Expect to see more fees and reduced flights with higher load factors.

The NBAA article details some similar statistics. They indicate 20 to 25 percent of a turbine operator’s cost of operation is fuel. The article notes, as we have discussed in previous blogs, that corporate operators are utilizing tactics such as using contract fuel providers, discounts with their base FBOs, tankering fuel and other fuel savings measures.

What Does the Crystal Ball Say?

As Henry Luce noted in his quote, in business we are always trying to look into the future. So looking into the crystal ball, what is going to happen with fuel costs, and what can we do about it? With the continued world unrest in the Middle East, oil prices will probably remain volatile.

The wild card in this equation is the Fed monetary policy. If the dollar remains weak, it’s our opinion the price of a barrel of oil is not going to go down anytime soon. Unfortunately, these factors are also going to slow down the economic recovery.

The bottom line: Just as the airlines are dealing with higher fuel costs, the cost of operating your FBO is going to go up and will probably not get any better soon. You’re also going to continue to see increased pressure on your fuel margin as aircraft operators, faced with their own budget problems, seek to negotiate better fuel prices.

So how do you survive during this fuel crisis? First, you must reconnect with your customers. Get out from behind the desk, and be a pro-active owner/operator. Be the restaurant owner!

Get to know your base customers and your transient customers. Learn their needs, wants and desires. By knowing your customers’ requirements, you can negotiate your own fuel delivery program that is customized to their operating parameters. At the same time, you minimize outside influences and maximize your returns. With regards to transient customers, you should already know who is flying into your location, so meet with them, and negotiate a reasonable service fee program which includes your fuel delivery.

Secondly, remember the Pareto 80–20 Principle.

Generally, the Pareto Principle is the observation (not law) that most things in life are not distributed evenly. It can mean all of the following things:

• Twenty percent of the input creates 80 percent of the result,
• 20 percent of the workers produce 80 percent of the result,
• 20 percent of the customers create 80 percent of the revenue,
• And on and on.

The Pareto Principle helps you realize the majority of results come from a minority of inputs.

As the FBO manager and chief marketing/sales person, this principle can help you concentrate your efforts by identifying your top customers — the important 20 percent that generate 80 percent of your business. That is the best bang for your buck. Know these folks well. This understanding of the vital few is what will make your business successful, and you can manage the change in cost of fuel.

Remember our premise as we forecast for the future. Concentrate on what you can control in a measured and methodical manner. We have little control over world events or what the Fed is going to do with monetary policy.

How are you dealing with the higher fuel costs? I’d like to know. Please email me at jenticknap@bellsouth.net.

John Enticknap

John Enticknap founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series.

Measuring Your FBO Customer Service Experience

What’s Your CQ™ (Customer Quotient)?

In the recent series on Building Long-Term Profitable Customer Relationships, we talked about what makes a customer loyal (Are You the Restaurant Owner?); the perils of competing on fuel price (Do You Feel Lucky?); and finally, how to deliver the best customer service experience (Don’t Forget the Cheese!)

Now it’s time to measure the effectiveness of all your good work to improve the Customer Service Experience!

Just as a good measure of one’s intellect is the Intelligence Quotient or IQ test, at Aviation Business Strategies Group (ABSG), we have developed the means to test your FBO’s Customer Quotient or CQ™. The results of determining your CQ™ is a good measure on the overall effectiveness of your FBO customer service initiatives.

The Customer Service Survey Tool

The first step in the process of understanding your CQ™ is to develop an accessible and meaningful customer service survey tool. By accessible, we are talking about the convenience of the customer’s access to the survey.

Obviously, you should have it in a printed form and accessible at your customer service desk and perhaps in the crew lounge. For the printed version, make sure the survey is formatted so it can be easily mailed, including a No Postage Necessary Business Reply indicia.

For further convenience, put up a survey box near the exit to the ramp where customers can drop the completed printed survey so they don’t need to carry it with them for mailing at a later date.
In addition to having the survey available at the locations mentioned above, consider including it as part of a customer receipt envelope or holder, similar to the kind of money holder you get when you cash a check at a bank.

Lastly, make the survey accessible online through your company Web site. Just make sure there is a space for the customer to enter the date of service and perhaps a customer transaction number if there is one on the receipt. This will help you determine the validity of the information.

Make the Survey Meaningful

Here are some basic tips to make the survey easy for the customer to fill out and meaningful to you as a true measure of the customer service experience.

1. Keep it simple and logical. Don’t overthink the questions.
2. Make the questions relevant. Ask only questions about the service experience.
3. Keep it short. If you have more than five or six questions, your response rate will be way down.
4. Make sure you ask the ultimate question: “Would you recommend our FBO?”

The last thing you should do is put together a point value system for each question so you can convert the results into a metric that can be plotted over time. For instance, say you wanted to measure the following where 1 is a low score and 10 is the high score:

• Quality of line service: Rate 1 to 10 points.
• Friendliness of staff: Rate 1 to10 points.
• Cleanliness of facility/restrooms: Rate 1 to 10  points.
• Pilot amenities: Rate 1 to 10 points.
• Passenger amenities: Rate1 to 10 points.

With this section of your survey, you could have a potentially high score of 50 points if your customers rated all these items at 10 points each.

Now, let’s throw one last question into the mix. It’s really the most important, so we give it a value of 50 points. Yes, it’s that important! It’s either yes or no. All or nothing!

• Would you recommend? Yes/No?
  • Yes = 50 Points.

  • No = 0 Points.

The Sum of All Parts

In a perfect world, your customer service experience could potentially score 100 points. In keeping score over time, create a chart using the data obtained for the first five questions.

You may want to do a chart on a weekly basis at first. However, creating a monthly snapshot over a 12-month period will probably give you the best idea of the way your customer service experience is trending.

Then, do a separate chart to keep track of the Would you recommend? question. State the results as a percentage of the amount of customer service surveys returned.

The last thing you may want to do is post the results for all your employees to see. Follow-up with an employee team meeting and encourage feedback from both your customers and your employees regarding how to improve your customer service experience.

©The terms/phrases “Customer Quotient™” and “CQ™” are propriety in their intended use and considered intellectual property of Aviation Business Strategies Group.

Ron Jackson

Ron Jackson is co-founder of ABSG and president of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese!, the Ultimate FBO Customer Service Experience.

Building Long-Term Profitable Customer Relationships, Part 3: Don't Forget the Cheese!

In part one of this three-part series, Are You the Restaurant Owner? we talked about what makes a customer loyal and taking a hands-on approach to customer service. In part two, Do You Feel Lucky? we discussed the perils of lowering the price of fuel to attract new customers.

The following is the third installment:

Part 3: Don't Forget the Cheese!

“Here is a simple but powerful rule, always give people more than what they expect to get.” – Nelson Boswell

In the quest to build long-term profitable customer relationships, we can’t overlook the basic foundation of delivering exceptional customer service. At the end of the day, if you can’t walk up to a customer preparing to depart your FBO with confidence and ask the question, “Would you recommend us?” then please read on.

At Aviation Business Strategies Group (ABSG), we have analyzed various customer service training programs that help teach the basics. Many new customer service employees are not that familiar with general and business aviation and need a good understanding of the FBO business basics as well as the airport environment and flight operations. Mostly, these basic training videos and interactive teaching aids do a very good job of instruction on the mechanics of the job.

However, if your goal is to provide The Ultimate Customer Service Experience, you need to take your customer service training to a whole different level.

The Origin of “Don’t Forget the Cheese!”

While I was working my way through college, one of my jobs was at a restaurant that primarily served hamburgers. We always did a great takeout business, and one day a loyal customer stormed back into the restaurant with his sack of hamburgers in hand.

“I can understand not putting in napkins or forgetting the salt and pepper,” he huffed. “But when I order a cheeseburger, it would be really nice if there was cheese on it.”

Needless to say, we were all embarrassed, and the owner came out and apologized for the oversight and the inconvenience it caused. A few minutes later, the customer left with cheese on his cheeseburgers and a couple of coupons for a return visit.

Later that day, when we had a shift change, the owner pulled everyone together and made his point about carefully checking a customer’s order, especially the takeout orders. Lesson learned, as they say.

Then, as the first shift started to leave, a buddy yelled back to the cook and said: “Hey Charlie, don’t forget the cheese!” That comment kind of lightened up the mood and became our battle cry for the rest of the summer.

This experience stuck with me over the years, and when it came time to develop an advance customer service program for one of our client FBOs, it just seemed natural to brand it: Don’t Forget the Cheese!©.

Key Elements to Great Customer Service Training

There are several necessary elements in developing a good customer service program for your organization. Here are few:

• Make it memorable. By branding a program with a memorable phrase, it promotes buy-in from the employees.
• Make it fun. Let’s face it, customer service training can potentially be very boring.You can liven up the atmosphere with a little tongue-in-cheek humor to keep everyone focused and awake.
• Make it relevant. Include some real-life customer service experiences that happened at your FBO. Use these in role-playing sessions.
• Use three-dimensional teaching aids. For our Don’t Forget the Cheese! © on-site training, we have fun by introducing a variety of cheeses and of course crackers as well.
• Make it sustainable. Does your current customer service program have any legs? In other words, are elements built into the program to serve as occasional reminders that make it sustainable over time? After the initial customer service training is complete, most employees operate in the halo effect of something new. However, that halo can fade over time, so make sure you have a vehicle to keep the elements of your program top-of-mind.

The Fundamentals

The use of Cheese in our proprietary customer service training course also serves as key reminders to CSRs, as well as other employees, to practice exceptional customer service. Here are just a few of the fundamentals to great customer service:

• Smile. Remember to say, “Cheese,” to yourself, as if someone were taking your photo. Even when answering the phone, put on a smile and the customer on the other end will sense they are talking to a happy person.
• Add a little extra when delivering customer service. Because cheese is often used as a condiment, it represents the added touch, the little extra that puts a smile on the customer’s face and makes them keep coming back.
• Remember a customer’s name. In the FBO environment, adding cheese can be as simple as remembering a customer’s name. Most people react positively to being called by their name and are impressed when you remember. Are you the restaurant owner?
• Go the extra mile. Going the extra mile could be something as simple as showing the customer where the pilot lounge is located instead of pointing in the general direction.

For our sustainable part of the Don’t Forget the Cheese! program, we use Cheese Bites© that are little reminders of some of the principles of good customer service. These are sent periodically to employees electronically by e-mail or through the use of social media by the FBO.

If you would like to share a customer service tip, please send them to me, and I’ll publish them in a future blog post. Send them to Ron@thejacksongroup.biz.

©The terms/phrases Don’t Forget the Cheese! and Cheese Bites are proprietary in their intended use and considered intellectual property of Aviation Business Strategies Group.

Ron Jackson

Ron Jackson is co-founder of ABSG and president of The Jackson Group, a public relations agency specializing in aviation and FBO marketing. He has held management positions with Cessna Aircraft and Bozell Advertising and is the author of Mission Marketing: Creating Brand Value and co-author of Don’t Forget the Cheese!, the Ultimate FBO Customer Service Experience.

Optimizing Your FBO, Part 2: Cross-Train and Outsource

In Part 1 of Optimizing Your FBO, we talked about analyzing your business and investing in your front line employees. It just makes good business sense, even in tough economic times, to invest your time and resources in your front line employees because they have the first and the most important contact with your customers.

In this post, Part 2 of Optimizing Your FBO, I want to share additional strategies that will help prepare you to weather any kind of economic environment and increase the efficiency of your operation.

Cross-Train

For most FBOs, employees must learn to multitask — a term that management gurus have coined. It’s really a new term for an old axiom. The best employees, who do the best jobs, can do many different tasks. Gee, what a concept!

For FBOs that are consistently successful, employees do many different job functions that result in a more efficient operation and better employee morale. A happy employee, a happy customer. It can be a very contagious working environment that results in better customer service. Cross-training makes all employees more valuable and better motivated.

Let’s look at some ideas:

• Why not train your CSRs to meet and greet arriving aircraft? You’re already paying the Workers’ Compensation rate for ramp on the CSRs!
• How about training your CSRs and building maintenance staff to be wing walkers? Tip: Having two wing walkers, especially in hangar movements, can decrease your incident rate and could help lower your insurance premium, another cost savings.
• Get your accounting staff outside to learn about fueling and tank farm quality control. They might even learn about fuel quality control and inventory procedures.
• When was the last time the executive staff worked the ramp or talked to arriving pilots and passengers?
• Encourage ramp staff and the executive staff to walk the ramp for FOD and look at the FBO facility from the arriving pilot’s point of view.
• Your A&P mechanics need to meet, greet and be part of the customer’s maintenance project. Once the inspection is completed, the A&P should be part of the discussion with the owner on what is to be fixed; obvious but rarely done.
• In your flight school, when was that last time your chief instructor called and talked to the students before a check ride? Find out how the student likes flying and the learning experience.

Outsourcing

Many FBOs feel outsourcing is what big companies do, not smaller aviation service companies. The fact is, many services an FBO provides are not necessarily full-time, around-the-clock services. Outsourcing may actually save you money and help keep your front line employees focused on better serving the customer.

For instance, building cleaning, most especially restrooms. This service is not one most employees enjoy, so let’s outsource it. There are many vendors available to do this as well as provide the cleaning solutions, toilet paper, hand towels, etc. Get competitive pricing and monitor closely.

Another area is maintaining indoor plants as well as outdoor landscaping. This is a pain in the neck for most employees, but if you want a first-class FBO facility, you need to pay attention to interior details and keep the grounds well groomed. Get a number of bids, and again, monitor closely.

How about providing some extra services on an on-call basis? No overlapping costs while providing more services and a new stream of income. For instance:

• Aircraft interior cleaning
• Aircraft exterior services
• Quick-turns cleaning
• Customer car washing and detailing
• Customer car valet service

In larger cities or communities, there are vendors you can source that specialize in aircraft cleaning and detailing. In smaller communities, you may be able to find a good auto detailer that you can trust and help train to provide on-call services such as aircraft cleaning services, auto valet, customer car washing and detailing services.

What are some other ideas for cross-training and outsourcing? If you have some ideas that have worked at your FBO, please send them to me and I’ll include them in a follow-up blog. My email is jenticknap@bellsouth.net.

John Enticknap

John Enticknap founded Aviation Business Strategies Group in 2006 following a distinguished career in aviation fueling and FBO management, including as president of Mercury Air Centers. He is the author of 10 Steps to Building a Profitable FBO and developed NATA’s acclaimed FBO Success Seminar Series.