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Key Idea: Price It High

Excellence Pays. Reed charges more for fuel than his competitors and at the same time he sells two thirds of all the fuel purchased in his market.

Key Question:

A: 

Charge enough to make profits which you can reinvest in the business.

Small business owners learn over time that we can not be the price leader and strong build long-lived companies. Reed said, "It took me a while to realize that I've got to charge a fair price for the fuel I sell. I've got to make a margin... so I can keep the best people here."

Q: What does Reed do for customers other than provide a great service team?

A: We've already mentioned the red carpet, apples, hot apple cider and cookies. He also provides covered parking, crew cars so the pilots don't have to rent a car if they want to leave Meacham Field, air-conditioning units to keep the inside of the planes cool while they are on the ground in the hot Texas sun, the snooze room, the TV room, work-out equipment with showers and an office with Internet access.

Today you should not try to sell a product without service and you should not try to sell a service without a product. Bundling is the way to go and the better the bundle the more you can charge. The magic is figuring out what should be in the bundle.

Think about it

What is your current bundle? What can you do to improve upon it?


 

Clip from: Texas Jet

Fort Worth, Texas: There are no lines. No crowds. No delays. Just red carpet treatment all the way. And, it is not just for the wealthy anymore. Here at Meacham Field and in 5000 other small airports around the USA, small business owners service, sell, own, and use private jets. This is the other airport in town.

This is the story of Texas Jet which is FBO, Fixed-Base Operation; they provide all the ground-based services required by aircraft owners and operators. The term, FBO, originated back after World War I to describe the first aviation businesses that developed a permanent base of operations to deliver services at airports. That name stuck. Here we open the door of private jets, charters, fractionals, and empty legs. With the help of the Internet bookings, you could easily be taking a little jet rather than drive your car.

Founder Reed Pigman says the pilots are his core customer base;  and, for many years now, these pilots voted Texas Jet to be one of the Top Ten Independent FBO's in the United States. So, out of 5,000 choices, pilots say Reed and his team are among the best. There's more. As a distributor for Phillips 66 Jet Fuel, Reed also takes the lead. Texas Jet has been recognized by Phillips 66 as one of a hand-full of distinguished partners among some 600 distributors. 

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Texas Jet

Reed Pigman, President

200 Texas Way
Fort Worth, TX 76106
8007764547

Visit our web site: http://www.texasjet.com/

Office: 8007764547

Business Classification:
Transportation

Year Founded: 1978

Price It High

REED: I have to be excellent. I have to be excellent at what I do. I can't just be OK, because a pilot--if the service is OK, they're probably going to go where it's cheaper. It took me a while to realize that I've got to charge a fair price for the fuel I sell. (Voiceover) I've got to make a margin on that that I can--I try to pay our people here at least $1 an hour to $2 an hour more than average

REED: (Voiceover) ...because I want to keep the best people here. And to do that, I've got to be able to sell my fuel, not gouging people, but I've got to sell it at a decent price. I stopped letting myself get beat up by people that would say, `Boy, I got fuel just the other day that's 30 cents cheaper than what you're selling it.' And, you know, I say that, `I have provided services for our pilots--for you, sir, or ma'am such as crew cars that you can use to go to your hotel overnight so you don't have to rent a car and charge that to your company, or you can go to lunch and, the same thing, you don't have to rent a car and charge that to your company.' I offer air-conditioning units to cool the airplanes in the summer. We have covered parking, so that when their cars are parked there, they're not out in the Texas sun or in the weather. And those things cost money.

And for me to offer those services, I have to charge a fair price for the fuel. Generally, people will pay more for higher quality because--you know, I'm a big stickler on quality. We try to train our people, our new employees, that when a customer comes to our front desk and has an experience at Texas Jet, they're not only comparing us with the last place they left and the next place they're going to, they're comparing us--they're rating us against, `Where did I go that I had the absolute best service ever? Was it at a hotel? Was it at a fine restaurant? Was it at Disney World? Where was it? This is where I had that absolute best service.' Then, where does Texas Jet stack up? Are we almost the same, or are we way down here? And it transfers over from business to business.

HATTIE: So you see your competitors, or the folks that are setting the standards--service standards around here are other providers of upscale service.

REED: Subconsciously, they are comparing us to that best.
 

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