Flight Instructors please stop flying for free.

I heard on a podcast that the redemption rate on groupons is in the 40% range.

I have mixed feelings about the usefulness of it because you're basically giving a third party (groupon) revenue and selling your product under cost hoping to build full price customers and recoup the cost.

I wonder if it would be more effective to simply cut groupon out of the mix and just have an Aviation Open House one sunny Saturday afternoon. Free hotdogs (or invite some food trucks), clowns for the kids and raffle off 5 introductory flights redeemable in the next 48 hrs.

Then you don't have some hipster at Groupon leeching on your revenue stream, you can get some community outreach done and probably win more customers at a lower cost.
 
Doug Taylor said:
I heard on a podcast that the redemption rate on groupons is in the 40% range.

I have mixed feelings about the usefulness of it because you're basically giving a third party (groupon) revenue and selling your product under cost hoping to build full price customers and recoup the cost.

I wonder if it would be more effective to simply cut groupon out of the mix and just have an Aviation Open House one sunny Saturday afternoon. Free hotdogs (or invite some food trucks), clowns for the kids and raffle off 5 introductory flights redeemable in the next 48 hrs.

Then you don't have some hipster at Groupon leeching on your revenue stream, you can get some community outreach done and probably win more customers at a lower cost.
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+1. Good old fashioned Airport Days, pancake breakfasts, and young eagle flights were what got me sucked in. In looking at the flying for a hobby market, the whole "being a part of the pilot community" thing is pretty huge in regards to getting people hooked.
 
Yup.

The "OMG there are other weirdos like me and they're, we'll, surprisingly normal!"

Plus you give you CFIs an opportunity to brush up on customer service skills and those that dont want to participate do not have to.
 
My wife does groupons for her bakery and she typically has about a 30-35% turn in rate. She had almost a 75% rate for Thanksgiving this year though.

I know she has gained some pretty steady customers from groupons - a couple banks and a car dealership are all steady daily customers who had no idea she was down town until someone picked up a couple groupons..
 
Doug Taylor said:
I heard on a podcast that the redemption rate on groupons is in the 40% range.

I have mixed feelings about the usefulness of it because you're basically giving a third party (groupon) revenue and selling your product under cost hoping to build full price customers and recoup the cost.

I wonder if it would be more effective to simply cut groupon out of the mix and just have an Aviation Open House one sunny Saturday afternoon. Free hotdogs (or invite some food trucks), clowns for the kids and raffle off 5 introductory flights redeemable in the next 48 hrs.

Then you don't have some hipster at Groupon leeching on your revenue stream, you can get some community outreach done and probably win more customers at a lower cost.
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An open house with hot dogs and clowns is one way to market and there is nothing wrong with that way either. But you do have to pay for the hot dogs and the clown as well as employees to help customers during the open house. That costs money as well.

You also have to get the word out (advertise) and that costs money even if you just put posters up around the airport. Craigslist is free, but that's not going to bring you enough for an open house. (nor the customers you really want) The other thing that you have with an open house is a lot of time tied up in putting it together and executing the open house. Time is money.

There is nothing wrong with paying a company (Groupon, Radio Station, Newspaper, etc) to bring customers in to your business. Car dealers and supermarkets do it all the time! Groupon is just one channel to acquire customers and from what I am reading here they are bringing in a lot of leads to flight schools that use them. Just like any marketing campaign, it's not going to be something you can do every day or every month.

Don't flight schools usually lose money on discovery flights anyway? As far as I can remember, this is the only discounted item that anyone ever receives from a flight school. After that, it's full price all the way.

I'm not in the Flight School Business, but if I were, I might give this Groupon thing a shot and put together a program to handle the customers that it brings in.

Joe
 
BenZwebner said:
BINGO.

The flight school gets paid for the un-redeemed coupons as well.
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If that is the case, then my numbers above will change and they will be move in favor of the flight school. If the 10 coupons above were redeemed, and the redemption rate is 40% then that means the school is going to be paid for 25 coupons in my example. This means the school would get $625 from Groupon for the 10 rides. That works out to $62.50 per flight.

So the number would look more like this:

1. 10 discovery flights cost the school $1500.00 in fuel, instructor and aircraft. ($150 per discovery flight)

2. Groupon paid the school $625 for the 10 flights ($62.50 per flight)

3. Net expense to the school for the 10 discovery flights is $875 Groupon cost ($1500-$625)

4. School sells (actually upsells) two private pilot training programs which will generate at least $7000 each for a total of $14,000. (The program could generate $10,000 per student depending on the school)

5. Gross revenue to school after discovery flight expenses is a minimum of $13,125.

I'll pay out $875 all day long to someone or something that will bring me $13,125 in revenue, to my business, after I deducted the $875. I'd be cray not too.

Joe

P. S. By the way, if any of you want a fast cool $875, just send me $13,000 in business!
 
I do not understand why an FBO/flight school would want to lose money on a discovery flight. The reason retail stores do loss leaders is because it's usually something they know people need anyway and they know when they come to buy it they'll buy other stuff.

A demo flight for most people is just an airplane ride. Most people on an airplane ride will think "that was neat, now where are we going for lunch?".... not "OMG that was so awesome, tell me how I can drop $7,000 on a PPL right NOW!!#$!".

If someone's got the bug and will become a student, they are going to pay $150 for a first lesson. The fact that they got their first lesson for $50 is hardly going to make the difference in whether they start taking lessons.

It just doesn't make any sense to me.
 
JOEFRIDAY2 said:
4. School sells (actually upsells) two private pilot training programs which will generate at least $7000 each for a total of $14,000. (The program could generate $10,000 per student depending on the school)
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You're forgetting the dismal completion rates for PPL students, most wont even make it to first solo. Of your two upsells, statistically they'll both quit. Lets say you get 6 hours out of each, that's $1,800 revenue, but your margin is probably only about 20%... so you've still lost $500 giving cut-rate airplane rides to the locals.
 
rframe said:
I do not understand why an FBO/flight school would want to lose money on a discovery flight. The reason retail stores do loss leaders is because it's usually something they know people need anyway and they know when they come to buy it they'll buy other stuff.

A demo flight for most people is just an airplane ride. Most people on an airplane ride will think "that was neat, now where are we going for lunch?".... not "OMG that was so awesome, tell me how I can drop $7,000 on a PPL right NOW!!#$!".

If someone's got the bug and will become a student, they are going to pay $150 for a first lesson. The fact that they got their first lesson for $50 is hardly going to make the difference in whether they start taking lessons.

It just doesn't make any sense to me.
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Not necessarily. Sometimes all you have to do is get someone in a plane to make them realize that they want to fly. I was terrified to go in a small plane until the first time I went, then I loved it. When I didn't have anyone to take me up in a small plane again I decided to learn on my own. ;)
 
I've used Groupon for a business we run. Here are my thoughts:

1) Groupon is simply a marketing expense. Whatever you might "lose" on Groupon - compare that to other forms of marketing and the ROI for those things (if you have the data) and that allows a full comprehension of the Groupon return.

2) Groupon is often used as a tool when the business is already sucking. "OMG!!! We are sucking and have no customer flow! Let's do a Groupon!" - and I would suggest that is the worst kind of time to do a Groupon - because you already have a sucking business - so more customer volume to your sucking business/business model isn't going to help. Groupon should be used as a consistent marketing tool, within your annual marketing plans - not as a "one time thing to increase volume".

3) Groupon can be negotiated with. They want to dictate the price of the offering, and dictate that they get 50% of that. You can negotiate better terms, just like any other business - but only if your business is good to begin with.

4) Have a plan to turn Groupon customers into long-term customers. This is where having the employees understand customer service, marketing, etc come into play.

Groupon can be a useful tool, but it is only as good as the operator of the tool, just like everything else. You have to have the correct tool (Groupon), and the correct team (motor oil), in place to make it work right.
 
I did not read the rough the whole thread but do have some info from my area to offer. I have family that owns a helicopter operation and I know of 2 flight schools that have did the groupon deal. All of them pay their CFIs full rate for the demo flights just like any other flight. They cut the aircraft down to direct operating cost or even a little lower to make the deal. Plus like some have said above not all people redeem their groupon so it only takes a few and the margin goes back to normal training profit. One small school here put up a groupon back in the fall for a few days and sold $15,000 worth of flights. So far less than 50% have scheduled.
 
JOEFRIDAY2 said:
I'm going to have to agree with some of the others. This is marketing pure and simple. You want to get folks in the door to take the introductory flights. If you get enough in the door and you handle it properly then you should get some students out of it. You probably need to box in the restrictions on the coupon so that it works out for your school. Also plan on selling them something at the end of the introductory flight at a special price. (a log book, private pilot kit, tee-shirt, etc.) The more you can get them to "buy in", the better results you will have.

Joe
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this works, at my school we call our discovery flights an introductory lesson and fill out a log book for them. It's like an std, something to remember us by! :)
 
mojo6911 said:
You said you don't consider it giving your time away. Meaning, it isn't work.
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Just curious, do you charge your student for "ground" during a walk around, etc?

You're attempting to preach to the choir, mojo. I'd bet dollars to donuts I get paid more per hour for instruction than you do. Maybe it's you who is giving away your time.
 
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