Profile

The business: A&A Limousine Service; 795-2175

Founded: 1981 The owner: Gary Aegerter

The Services: Limousine and sedan transportation Annual revenue: $140,000 annually.

The Challenge: Solidify and expand market share.

The Story

Gary Aegerter is a Tucson native. He graduated from Tucson High School in 1966 and earned a bachelor's degree from the University of Arizona in 1970.

His family owner A&A Ambulance Service and Aegerter managed the business. It was a 24-hour-a-day, seven-day-a-week business, he says. A&A had 10 ambulances and a few limousines.

Aegerter sold the business in 1979. He stayed at the company and worked for the new owners for five years. Eventually, the owners moved the limousines to Phoenix, discontinuing limousine services in Tucson.

Aegerter decided to fill the niche. In 1981, he bought a limo and started A&A Limousine Service. Mortuaries were the biggest revenue source, says Aegerter.

In the late '80's, there were five main competitors and each would refer customers to the others when there was business overflow. In 1990, A&A Limousine Service owned eight limo's, gross sales were $200,000 and corporate limousine transportation was peaking.

By 1995, corporate travel was less ostentatious and costly, Aegerter says. A&A now owns two limousines and two sedans for funerals, corporate travel, entertainment and social events.

"Our company sells service," Aegerter says. Transportation is the basic service, but drivers are expected to enhance events with punctuality, professional appearance, and knowledge about the area and timing of events. Celebrities expect to be insulated from unwanted attention. Driving under the influence laws have created new social uses for limousines and clients often ask for all sorts of services, including pickup and delivery of goods or event tickets.

Limousines have evolved since the 1980's when they were transportation for six to eight passengers. The standard limousine is 10 feet long and seats 10 passengers. They are equipped with facing seats to facilitate conversation, beverage bars and televisions. Cost of a new limo is about $65,000, Aergerter says.

In most markets, the standard fee for limo rental is $75 per hour, with a three-hour minimum. In Tucson, peak season rates are between $50 and $65 per hour. Lower rates barely cover the costs of drivers, insurance, fuel and the limo.

The Advice

"A&A Limousine's business model of limo's and sedans place the company in a specialty market. Without a fleet of mini-buses and vans, clientele is limited to individuals and small intimate groups," says Business Coach Dale Bruder.

Aegerter's niche exposes his business to low-cost competitors from entry-level limousine companies, many of which have only one or two cars and tend to leave the market as quickly as they enter it. His competitive advantage is 22 years of experience.

"Aegerter has seen it all," Coach Bruder says. He mentors his drivers in the nuances of the service and handpicks drivers from a pool of experienced police, fire and ambulance people. "Hiring criteria include being worldly, cultured, knowledgeable about the city and service oriented." he adds.

Aegerter should nurture strategic alliances with established limousine companies who keep close tabs on the quality of their vehicles and drivers. No single company has enough cars or first-class drivers to handle a large corporate event or recover from a mechanical breakdown in 15 minutes. The purpose of the alliance is to provide the customer with a consistent, quality limousine experience.

The reputation of a premier service depends upon the perceptions of the customers, Coach Bruder says. The vehicle and driver are merely transportation, but the interaction between driver and customers define the limousine experience. Drivers should be trained to handle sensitive, delicate and abusive situations as well as they handle the cars. They should be flexible, receptive to spontaneous changes in customer plans and able to treat celebrities in a dignified and professional manner.

Aegerter's longevity in the limo business is derived from the company's reputation, Coach Bruder says. Referrals build business based on quality of service rather than volume. Customers with a memory of superior limousine service are the best source of referrals. A&A Limousine should personalize the customer's experience from the first phone inquiry to the last time the car door is opened.

Customers hire limousines expecting someone to cater to their needs. They expect to do what they want, when they want and are willing to pay for a high level of service. At times, entry-level limousine services act as glorified cab services. "They take people from point to point, and in their short business lives of two or three years, undermine public perceptions," says Coach Bruder. Aegerter should explore ways to push industry standards and try to prevent experiences reflecting badly on all limousine services.

Aegerter donates limousine rides to charity fund-raising events. The rides are sold in silent auctions to those who may be A&A's natural customers. He should continue to be available and active in the fundraising community, packaging the gratis limo rides with fine dining, resort getaways and other entertainment.

LIMOUSINE SERVICE AIMS TO REV UP BUSINESS PACE

By Arizona Daily Star Business Writer