Getting customers really is a science, especially getting the right customers.
Not all driving school franchises include getting customers for their instructors in the contract.
And those that do are often unclear about how many customers they are willing to supply you.
Some driving school contracts offer a minimum of 30 customers each year. But 30 customers isn’t enough to fill a diary for 12 months.
Many of those customers might only stay with the instructor for half a dozen lessons.
How many customers do you need to reach your earning target each year?
Here’s a simple method to guide you.
Start by asking the question: how many weeks do you want to work each year?
If you want to take four weeks of holidays each year, you’ve 48 working weeks to fill with driving lessons.
What’s the minimum hours you are prepared to work each week?
Let’s just say you are happy to work 35 hours each week.
Time for maths (something I didn’t excel at during my school days). If we take 35 hours and times it by 48 weeks it equals 1,680 hours you have to work each year.
1,680 hours is time you are paid for, the hours you spend commuting between lessons isn’t paid for, therefore diary management is important. Keeping commuting time down is key!
Now you can work out your expected income. So, let’s times your 1,680 paid hours by your expected hourly rate, let’s just say £28 per hour. So £28 times by 1,680 equals £47,040 annual income.
To get an estimated annual profit you need to minus expenses of delivering driving lessons.
Expenses is everything you pay to give those lessons, example:
● Tuition vehicle
● Insurance
● Maintenance
● Tyre allowance
● Fuel
● Marketing or franchise costs etc.
Expenses will be different for everyone’s situation, therefore we are not going to include them here.
But you do need to know your expenses, and if you are using a tuition vehicle which isn’t covered by a warranty, you might require a contingency pot of cash just in case something major goes wrong.
You’ll also have to factor in tax, that’s the government’s cut of your earnings.
You can earn £12,570 net profit (money earned after expenses), each year before you pay tax but you will be required to pay Class 2 and Class 4 national insurance.
You will be charged 20% tax on earnings above £12,570.
How many customers will you need to fill those 1,680 hours?
Let’s assume as an average every learner takes a minimum of 20 hours of lessons with you.
Remember not all customers will be novice drivers, and not all customers will stay with you until they pass their driving test.
So, the calculation is 1680hour divided by 20hours = 84 customers.
But, this occupation isn’t that simple. So how many spaces are going to be left empty because of cancellations and how many empty gaps will you have that might take weeks to fill while you find a new customer?
This industry is notorious for the amount of time wasted with commuting, cancellations and gaps that are waiting to be taken by new students.
So food for thought – How do I find the right customers to keep busy?
You can consider the following questions:
● What’s the location of these customers going to be – many of them may not be anywhere near the territory you want to work within, therefore they are unsuitable because the distance you will have to travel from one lesson to another is an unacceptable waste of time.
● Can you find enough customers to fill your day time spaces – The easiest customers to find will always be those who want evening and weekend lessons – But you might not want to work every evening & weekend.
● How many cheap lessons do you have to give away before you start earning your premium lesson price – It’s very common for driving instructors to have promotional offers to get people to book driving lessons with them, and some students expect a discount. But every discounted hour comes from your annual profit.
An example: Let’s assume you offer a new customer their first two lessons as buy one get one free.
If you take on 40 new customers in that year, that’s 40 hour given for free at a value of £1,120. Now I’m not suggesting it’s wrong to offer discounts, quite the opposite as long as you are aware of how the offer affects your net income.
Look at smart offers to attract new customers that don’t actually reduce your income by too much.
Now you know how many customers you need – How will you get them?
Don’t expect them to come looking for you!
Getting customers has to be your biggest priority, because even if you deliver great driving lessons and offer exceptional service, neither is going to help if you haven’t any students.
Getting the right customers.
It’s important that your marketing efforts supply you with the ideal type of customers to fill those 1,680 hours each year, or however many hours you want to work.
So, experience tells us that our ideal customers are:
● Someone who has a regular 1.5 or 2 hour lesson every week – 60 minute lessons means more travelling time between customers, and the period is too short for a learner’s concentrated effort. Students who want more than one session each week might look good on paper, but if they are ill, or on holiday will leave your diary looking thin for the week.
● Someone who can afford regular lessons – if students are stopping and starting lessons, you will have empty spaces in your diary each week.
● Someone who prefers the same day and time each week – great for diary management, and reduces the workload for you on an evening, meaning less calls to swap appointments.
● Someone who never cancels lessons – cancellations cost instructors a fortune in lost revenue. Just two cancellations a week could mean as much as four hours lost, if they are two hour sessions. If that was a regular occurance every week that’s a potential annual loss of 208 hours @ nearly £6k.
● Someone who is engaged in their lessons and will continue with you until they pass the driving test – You want people who will stay with you, not take a few cheap lessons then move to the next instructor who’s offering a new customer deal.
● Someone who recommends family and friends to you – Recommendations can save you a lot of expense on advertising, and if they come from good customers, they will generally be as reliable.
Keep your territory small
In today’s busy cities commuting between lessons takes up a lot of your working week.
Therefore it makes sense to reduce the radius you are willing to travel between customers.
This is where good marketers are worth the investment, because they will find your ideal students who are reliable customers, who live within your ideal coverage area, who can afford regular lessons, and who are able to fill the gaps you have available.
They will generate a lot of enquiries to filter these clients out for you.
Outsourcing the getting of customers can be a smart thing to do, because people don’t always call when you’re available to take the call. And, if you’re on a lesson when they call, they’ll call the next driving instructor on their list..
Even if they leave a voicemail or send you a message, don’t assume customers will wait for you to get back to them.
People are just too busy to wait, and with tools like the smartphone on hand, it’s simple to find the next driving instructor.
So, if you don’t answer their call immediately, don’t expect them to call you back!
This is where Elite’s experienced team can help you.
We have over 30 years experience marketing for driving instructors, and we’ve become very good at getting the right customers for our instructors.
We offer a unique low cost, no commitment franchise deal, so if we don’t deliver you don’t pay.
Now how refreshing is that!
Call today and let’s get together and chat about how we can add more value to your business for a lot less than you could imagine.