FBOs to compete on service, not price

The FBO industry is shifting from a price sensitive business model to one based on providing an exceptional customer service experience, according to John Enticknap and Ron Jackson, Principals of Aviation Business Strategies Group (ABSG),

“FBOs competing on price is an archaic way of doing business,” Enticknap told a group of FBO industry leaders attending the National Business Aviation Association’s (NBAA) Schedule and Dispatchers (S&D) Conference. “In today’s tough business climate, FBOs are operating on very thin margins yet the cost of doing business continues to rise. Therefore, in order to stay in business, FBOs can’t afford to wholesale fuel. They must find other ways to differentiate and the best way is to offer outstanding customer service.”

According to Jackson, FBOs are taking customer service training very seriously.

“Just as FBOs don’t tolerate mishaps on the ramp, they are becoming more conscious of eliminating miscues with the way they deliver customer service,” he said. “Research indicates that loyal customers don’t stop doing business with a company because of price, but rather because of a poor customer service experience. However, most will return if you recognize and fix the problem.”

One of the ways Jackson suggests to improve the customer service experience is to standardize training and look for ways to motivate employees in a way where they take ownership of problems when they arise.

“Just like a restaurant owner, you have to be there for the customer,” Jackson explained. “Empowering FBO employees to own their mistakes at the time of transaction is crucial. Teaching them to effectively deal with customer dissatisfaction helps make for a long-term profitable customer relationship.”

In addressing the economic outlook for the FBO Industry in 2013, Enticknap said most FBOs should experience steady growth in business in the range of 4% to 6%.

“The FBO industry has not fully recovered from the economic downturn over the past several years,” Enticknap said. “Yes, 2012 was a better year than 2011, but there has been a modest shakeout of FBOs who had been operating marginally. Going forward, it looks like there will be a slight increase in the number of flight hours being flown by corporate flight departments and charter operators. However, more efficient aircraft and the practice of tankering will make 2013 another challenging year for the industry. If an FBO achieves a growth in business of 6% or more, they will be a star performer.”

Aviation Business Strategies Group (ABSG) was founded in 2006 by aviation fueling and FBO services veteran John Enticknap and aviation marketing practitioner Ron Jackson. They offer a series of seminars, workshops, webinars and personal business coaching for FBOs.

For more information: ABSGgroup.com

Comments

  1. pilotman says

    Most FBOs are marking up the price of fuel by $1.00 to $2.00 per gallon-some even more. Since when is that ” operating on thin margins” ?. At airports where there are multiple FBOs the prices are usually better. Before cross-country trips, I always check fuel prices. A great example is Kissimmee Gateway airport. The Kissimmee Jet center has great prices- sometimes $2.00 per gallon less for Jet fuel than the new FBOs, and their service is great. They bring the rental car right to the plane and help with baggage. I’m not interested in paying for someone’s Taj Mahal. Apparently a lot of others aren’t either, as there are usually lots of planes on the ramp at Kissimmee jet center.

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