Why Customer Service is Your Flight School's Best Investment

This is the first in a series of articles focused on helping flight schools operate as more effective businesses. Stay tuned as we cover essential topics to help your school thrive. The author is a type rated ATP and CFII with 12 years of experience in and around flight schools of various shapes and sizes. He is a co-founder of Flycore, a software company that started with the vision of transforming the flight training industry by helping schools deliver better experiences to their customers. The author can be reached for any business inquiries by emailing [email protected] or learn more at www.getflycore.com

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"Why Customer Service is Your Flight School’s Best Investment"

The winter months are often the slowest for flight training across the northern United States, while the summer tends to be slower for those in the southern reaches of our country. These slower times can create financial uncertainty and raise a relevant question for all flight schools. While we can’t change the weather, what can be done when billable hours are less than they are during the more fruitful seasons?

As we think about increasing revenue, I’ll set the stage with the concept of customer acquisition cost. This is a useful metric in evaluating the best path for generating more business because it helps us understand the typical cost of doing so. There are costs to everything in running a business and somewhat unexpectedly, new customers are often the most expensive way to increase revenue. The formula is relatively simple, it’s Marketing + Sales Costs divided by the number of customers acquired over a set period of time. 

Customer Acquisition Cost (CAC) = (Marketing + Sales Cost) ÷ Number of Customers

For flight schools that don’t have a significant marketing budget, sales cost is going to be the lionshare of what drives CAC. Specifically, cumulative hours of time spent by front desk staff or sales people to talk to new customers and onboard them, and in some cases, a loss-leading introductory flight. Some of this cost is hard to measure, for example - if the person running the school is taking sales meetings with prospects, what is an hour of their time worth when they could be using it to hire CFI’s or bring on more aircraft? Their time as the strategic decision maker is the most valuable time in any business.

In my experience, for a minimalist operation once you account for the time of the front desk staff, the chief pilot, and a discovery flight, the average customer acquisition cost is in the neighborhood of $400. For those schools with dedicated sales people and a marketing budget, this cost could easily be over $1000 per new student. 

To bring this together here’s an example and a potential alternative opportunity. A flight school acquires 3 new students a month on average at a CAC of $400 or $1200 total. If instead they re-engaged two inactive students to return to flying and acquired one new student this might cost $600 ($400 new student CAC + $200 time spent per re-engaged customer). This school would spend 50% less or save $7,200 per year. It is not unreasonable to assume this could be a 5-10% improvement on a flight school’s net profit margin.

The most important point here is that too many flight schools look at new customers as the only solution to their “need more revenue” woes. What if there was such a solid base of existing students that schools didn’t worry as much when the flow of new students tapered off? It is almost always less expensive to re-engage a previous or existing student than to shoulder the cost of bringing on a new student.

So, how can flight schools better lean into their current student base? Let’s talk about customer service. I have seen dozens of examples where a customer will take a break from flying and never return without follow up from the flight school. If a school spends less time on new students with a comparatively high CAC and assigns more time to staying in touch with current customers, it will have a profound impact on the ability to keep them happy and flying. Most flight schools I’ve been involved with don’t make concerted efforts around customer service after someone starts flying. One of the reasons there are opportunities in this space is because this work often gets left to CFI’s who usually aren’t motivated to keep up on it. 

I implore flight school managers and office staff to take on the responsibility of communicating with their customers regularly. Nurturing existing customer relationships will yield better student retention, help customers feel cared for and even give a school the opportunity to collect and act on feedback they receive from valued customers. 

As a starting point, take the time to pull a report from the scheduling system of customers who stopped flying from the last 2 years to 90 days and reach out to them. I’ve run this exercise several times and then sent out text messages to many of these inactive pilots. In one example an hour of time spent texting 100 former customers has re-ignited a dozen conversations and brought a handful back to the flight line. Offering these already valuable customers an incentive to get started again, since they are less expensive than a new student can also be a sound financial decision. In many cases this is untapped revenue waiting to be accessed.

As we all know, current students can only represent so much revenue for any single school, so a flow of new students is still required. For that reason, in the next article I’m looking forward to discussing more broadly the student acquisition process and how it can be optimized. I will cover the top of funnel processes - marketing, sales and customer service at a high level. I’ll discuss how a flight school can set up a clean, consistent, and error-free process to sell their services and take prospective students from initial contact to ready to fly.