Archive for December, 2006|Monthly archive page

Business model: customer friendly taxi service

Since one objective of this blog is to encourage companies to provide better customer service in Germany and help them identify business opportunities resulting from good customer service, I will occasionally describe business models based on excellent customer service. Here is the first installment. 

Wouldn’t it be great if there was a customer friendly taxi company that doesn’t only get you from point A to B but also provides a friendly and pleasant experience along the way?  

It would start with ordering the cab. You could order the taxi by phone, SMS, or online. And if you called, the friendly customer representative would immediately recognize you and greet you by name. After initial registration, the company would know your preferences of let’s say non-smoking car or payment method to allow for a quick ordering process.

When the taxi arrives, you would be greeted by name by a friendly taxi driver who helps you with your luggage and then opens the car door for you. Inside the cab he or she would offer you newspapers and magazines to read. And maybe as a nice gesture for the kids, the driver would have some small candy for them.  

During the ride the taxi driver would initiate a friendly small talk and continue with it if you are interested.  

At the end of the ride the taxi driver would help you get out of the car and would have your luggage ready waiting for you. He or she would wish you then a nice day. 

That the business basics – like clean car, safe driving, being on time, asking the customer about preferred route, and accepting all typical payment methods (cash, credit card, etc.) – are covered goes without saying.

Let’s do now a cost-benefit analysis of such a customer-friendly taxi company.

Incremental costs:
– newspaper and magazines: ~10-30¢ per ride
– candy for the kids: ~30-50¢ per ride
– friendly taxi drivers: 0 (The taxi company should be able to sign up only taxi drivers who are deemed fitted for this role.)

Incremental benefits:
– higher tips for the driver: ~50¢-2€ per ride
– increased customer satisfaction, which leads then to higher preference, which in turn leads to higher market share and hence higher revenues for the taxi company

This customer friendly taxi company could build its brand name through word-of-mouth and/or targeted advertising. And its consistently friendly service would increase preference among its frequent customers. The company could leverage its online ordering system in cooperation with airlines and train companies, offering their customers an easy way to order a taxi together with the airplane or train ticket, which would increase revenues for the taxi company even more.

Overall, a customer friendly taxi service would benefit financially both the drivers and the taxi company itself. And its customer focus would of course benefit customers too.