Coming out of the recession, motorcoach carriers have had to adapt to changes in the way customers spend, seek bids and travel; more complicated vehicles; tighter competition and more scrutiny due to rising safety concerns. We asked a handful of motorcoach operators — Jared Stancil, executive VP, Anchor Trailways in Nashville, Tenn.; Gary Krapf, president of Krapf Coaches in West Chester, Pa.; Marie Williams, office manager for Spirit Tours in Chicago; and Gene Wright II, GM, B&W Charters in Kalamazoo, Mich. — for their thoughts on various aspects of the industry, from a proposed National Highway Traffic Safety Administration (NHTSA) rule to changes in their customers and quotes to conversion ratios to the biggest challenges facing them today.
What do you think of the new NHTSA proposed rule for electronic stability control systems to be required on all buses?
Stancil: From what I saw of the information that [NHTSA] put out, they believe that over 50% of rollovers can be avoided. That’s a pretty staggering amount, especially when you consider that the technology’s already in place. It seems like it’s a good fit. The technology’s already there and it seems like it would make a significant difference. I would welcome that. Put it in place and let’s start saving lives, hopefully.
Wright II: I believe anything that increases passenger safety is a good thing. I just want it [to be] vetted properly and make sure there are some provisions made for older equipment. I think any mandate should come with funding assistance if it includes coaches made prior to the rule.
Williams: I think about [needing] more money, to facilitate that type of equipment on your bus. I don’t know whether old coaches would be a better bet or whether you would have to invest in a new coach to have that. Any time things change like that, there’s more money involved to take care of those particular requirements.
Are you including social media in your marketing plan? If so, have you found it to be as beneficial as or more so than other methods?
Stancil: Yes. We have developed a social media marketing plan and invested in certain things such as customized Facebook tabs, and it has been very beneficial. We’re able to give specific messages to very targeted customers. It’s helped us build our relationships. We’re able to promote our clients’ events and talk about their trips. It’s been really helpful for us to keep a dialogue going with them. We really want to show we’re more than just a bus company. We can show our personality, that their trip is important to us. We can talk about their trip before they take it and while they’re on it. It’s been very beneficial, and we are investing heavily in more technology and apps.
Krapf: Yes. I make sure I have someone on staff that is interacting on some level with social media. I do think it has helped to bring some attention to the services we provide. You can see certain levels of inquiries that are generated. Beyond pure social media it’s obvious the amount of Internet quoting and emails has increased tremendously in the last couple years.
Wright II: It’s important for any company to have a social media presence. The degree of involvement is tied to the area you operate in. If you’re hauling a lot of college students or line runs, then it’s probably going to benefit your business quite a bit. It will play a bigger role in subsequent years.
Williams: We’re not doing Twitter or Facebook to obtain customers. Some people have the computer equipment and some don’t. I do see it as a way to branch out. We send thank you [notes] to our customers. It’s nice to get something in the mail that isn’t a bill.
It was revealed recently that a bus driver in a crash in March of last year had his driver’s license suspended 18 times and was fired from two previous transportation jobs. Do you see vetting for suitable bus drivers as an issue in the industry?
Stancil: I don’t think it’s a vetting issue. I think that recently what you’ve seen is several examples of rogue carriers that just have a complete disregard for passenger safety and federal laws and who are just dangerous. We just have access to so much information now including the pre-screening program and CSA data. We can get any information about anybody because of technology. I think it’s more an enforcement issue, making sure that these rogue operators are shut down.
Williams: I would think that something like that, where there were fatalities, would [prompt] some changes. It’s really all about safety, and having drivers who are well-rested before they go out on the road. Maybe in this industry we need to have more or better training for drivers. [PAGEBREAK] Another issue in that accident seems to have been driver fatigue. Do you think that driver fatigue is an issue in the industry?
Stancil: I think it starts with a company culture — especially from owners to dispatchers — of being very sensitive to what your drivers can and can’t do, their needs and listening to them. I believe that drivers will tell you what they can and can’t do. The driver that you want to have with you is one that will be honest with you. How are they feeling, sleeping, what kind of schedules can they work? I think half of it is management: being able to listen and make the right decisions on scheduling a driver, and the other half is educating drivers so they know to listen to their body and what it’s telling them. They have to take care of themselves.
Is your customer base changing, and if so, in what ways? What are you doing to accommodate the changes?
Stancil: I don’t believe our customer base is changing but their travel needs have definitely changed. The biggest thing we’ve seen over the past couple years is groups taking more time to book and confirm trips. Sometimes a multi-day trip will be booked as little as a week out, and that’s because groups finally have enough people to go, or finally raised enough money. The size is also different. Before, there were 100 going. Now only 50 are going. They are also not traveling as far or as often.
Krapf: I think it has changed. The traditional senior groups are much different. They used to be a larger percentage of our trips. Selling to the baby boomers is much different, and it’s much harder getting them out of their cars. They’re more active and independent. We’re all struggling to find a way to sell to that newer senior group.
A lot of customers seem to have higher expectations and want more amenities. We try to do as much as we can to offer them, with vehicles with DVD players, satellite TV, Wi-Fi, much more luxurious seats, cupholders, the list goes on.
Wright II: I don’t think it’s changed as much as how people solicit quotes. Before, people would just look in the phone book and call. Now they get online and solicit quotes directly or through third-party sources. We often see the same quote from various sources.
Williams: I don’t think that our customer base has changed that much. You still find senior citizens groups, school groups, college tours and high school trips to be very prominent. Family reunions seem to be taking off. If I’ve seen any change, just a small smidgen of senior groups who do a lot of travel during the week [instead of] the weekends. That has taken up some of the slack.
What are some of the challenges that the industry is facing? What are some of the challenges that your operation is facing?
Stancil: The industry’s probably would coincide with [ours]. One of the shifts we’ve seen in the past couple years is the banking industry and regulations, and the requirements. You have to have different financial models and be able to present yourself differently to banks. It’s a challenge because banks have to make money, and most of us need financing, so we work through different financial strategies.
On top of that, the equipment is changing. With the newer, sophisticated engine technologies comes a pretty big price tag to meet the demands of what the government requires, and then, trying to pay for those things is a significant challenge. We as an industry have these operational expenses, [including] fuel and oil. We saw a bump in insurance come through as well, because those guys have to make money somewhere.
Krapf: The maintenance of our equipment has changed. We [now] call our mechanics technicians. Everything’s computerized and you’ve got to understand diagnostics on a whole different level. A computer can shut us down and it’s just not easily resolved in some cases, just way too many electronics, sensors and the emissions of the engines may drive some of this. The newer, cleaner engines are more technical and are driving up the price of the equipment again. It takes a lot more patience and skill.
Wright II: Finding qualified drivers is always an issue. Dealing with fuel prices is always tough. Figuring out the best way to work with brokers is a challenge. Customers have been trained to always look for the cheapest prices. Explaining to them the value in service, safety and reliable equipment is key. Getting customers to understand that a quality company has to charge a decent rate is a challenge. I think it’s key for operators to educate customers on what they do versus other competing interests in the industry. Staying on top of changes in regulations is a challenge, but is necessary for any quality company.
Williams: Competitive pricing is one. I also see, as the cost of operation goes up, it may be that some of us smaller bus companies may not be in the position to purchase a brand new bus. Depending on our workload, we sometimes have to reach out to other bus companies. To me, that seems to be becoming popular, simply because a lot of companies are scaling back or going out of business. Another challenge is continuing to meet the service [needs of] customers you already have on board.
What are some lessons learned from the recession?
Stancil: The biggest and the most helpful thing was taking a step back and evaluating each segment of the business. We made sure that, one, we were doing it because it was sustainable, and two, focusing on where we can grow and make enough money to operate a business. It helped us eliminate things that were not profitable and focus on the things we can do. We focused our energy on charters and from there we’ve been able to invest in social media plans and equipment on that segment. That’s now leading us back into other opportunities that we wouldn’t have had before.
Krapf: In general I would say you have to learn to act faster. If you think you’re going to need staff cuts, unfortunately, if you think you’re going to have a lull again, you just have to act quicker to improve your bottom line, making those big business decisions as fast as you can and not hope things are going to get better. Other decisions may include product pricing and fuel. You need to be able to react quickly to how volatile that market is and move your fuel surcharges quicker as costs increase or decrease.
Wright II: Trying to be more efficient and provide quick responses. A lot of people are trained to expect things to be instant online. The bus industry isn’t like the airlines or trains, where they run on a schedule, unless you’re talking about a line run. Especially with longer trips, it’s difficult to factor in all of the different things that people might want to do to quote in real time and plan discounts for a particular customer on a particular day of week or time of year. You need a person or a really nice algorithm that can figure all that out. As of today, I haven’t seen any software like that, but eventually, you will be able to put in your parameters and have that done for you. That’s ultimately what customers want for bus quotes: quickly, like when they go to kayak.com, priceline.com or hotwire.com. [PAGEBREAK]Now that some say the economy appears to be heading in a positive direction, in what areas are you investing? Equipment? Personnel? Technology?
Krapf: All of them. The economy may be heading in the right direction, I may be an optimist, but I need to see a little more consistency. Are we buying equipment? No. We have downsized over the last 10 years and I don’t have enough confidence to increase our fleet size. What we are doing is improving the quality of our product, trying to have a fairly new fleet as best as we can with as many amenities as we can. We’re trying to focus on improving training and recruitment, making sure we have a high level behind the wheel.
Stancil: We’ve invested in smaller buses to accommodate the different sizes [of groups]. Instead of investing in brand new equipment, we’re making it a more comfortable trip by adding Wi-Fi in every bus and power outlets and satellite TV.
Williams: I’d like to say equipment, but it’s so costly. Right now I don’t want to say we’re at a standstill, but we’re operating the best that we can under the circumstances. I think more bus companies have come into the picture and the competitive pricing is there. With some of the bus companies I have to farm out to, we’re pretty much at the same rate.
Are you doing anything specific to recruit and retain drivers?
Stancil: Now that things seem to be picking up, we have found ourselves back to where we’re in a heavy recruiting mode. To retain our drivers, we have started offering different bonus programs to make sure that we keep our drivers happy and they know they’re important.
[To recruit,] we reach out to certain segments of the community that we know make really good bus drivers, such as retired policemen, firemen, bus drivers and teachers. We’re seeing some payoff. We’re changing our methods; before, we wanted people to already have their CDL. Now, if you meet certain criteria, we’ll train you to get it.
Krapf: It’s a new problem for us. Our traditional means have been newspapers, Monster.com, some Web stuff, the Pennysaver and other community publications, even placemats in local diners. It’s always been relatively successful. More recently we’ve put some graphics, [saying] ‘Drivers wanted’ on the backs of a couple of our transit buses and that’s had success. We even designed ‘Drivers wanted’ lawn signs like politicians do. Our problem is not numbers. It’s the quality.
Regarding retention, driving a motorcoach is not as desirable a job as maybe it was 20 or 30 years ago. Good core drivers have gotten older and gone away and that lifestyle is not as sellable as it may once have been. The new people that are good don’t seem to stay long, and it’s trouble enough just to get the good ones to begin with. Are pay rates in the industry too low? I would argue yes, but the rates we charge don’t justify paying someone $25 an hour.
Are you doing anything specific to increase the conversion ratio from quotes to orders?
Wright II: We do a lot of follow-up but I don’t know if that’s anything different than what everybody else is doing. It’s just working on your customer service skills with your staff and trying to close a deal. You try to apply the proper amount of pressure, but not too much. I think the key is to let customers know that you want their business and that they are more than just a quote request.
Stancil: Yes. We’ve developed weekly reports to make sure that we’re tracking who we’re quoting and developed systems to make sure they’re getting a call back. We focused on having more face time, — what we call road shows — which is making sure that we’ve designated a certain number of hours each week to go out and try to get in front of some of the customers we’re quoting or some we know will be coming up will be getting a quote to first review how we’ve been doing and then see what else can we do. We are trying to take a more hands-on, active approach to our sales process.