Taking Customer Service To New Heights
This ISV (independent software vendor) employs seven technicians with pilot’s licenses and utilizes a fleet of four airplanes to sell to and service the United States and Canada.When Dan Nesmith tells one of his retail customers that he’ll be flying to their site to perform the install, the customer usually responds by telling Nesmith how far away the nearest commercial airport is. But the ISV doesn’t fly commercially. Nor do any of his field technicians. In all, Nesmith, the president and owner of Paladin Data Corp., has seven employees with pilot’s licenses and four airplanes at its immediate disposal, with two additional planes available by contract. Paladin’s primary product is its own retail POS software, and, as Nesmith claims, his company wouldn’t be able to compete on a national scale with the retail software giants and survive 30 years of doing business if not for the use of aircraft. Paladin isn’t headquartered in a major city or business hub. The ISV’s home base is an airplane hangar in Bend, OR, a small town surrounded by mountain ranges and sprawling landscapes.
Business Solutions, October 2009
Business Solutions, October 2009
Written by: Mike Monocello
Expand Your Geographic Reach To Increase POS Sales
For its first 10 years in business, the ISV was relegated to selling its software to locations within reasonable driving distances. With states as large as those in the Northwest, the company’s business potential was limited. “Mountains in this area are pretty large, and even though the distance between two cities might only be a couple hundred miles, there could be two or more mountain ranges you have to cross,” Nesmith says. “Being able to go up and over in a straight line via airplane can obviously drastically reduce travel time. In fact, it’s not uncommon to turn a 5-hour drive into a flight that takes less than an hour.” About 15 years ago, after contracting with a local pilot to be flown to a remote customer site, Nesmith became enchanted with the thought of being a pilot himself. His wife bought him flying lessons as a present, and a short time later Nesmith had his pilot’s license. A couple weeks after that, the ISV bought his first plane, a single-engine aircraft. This gave Nesmith the ability to far surpass the capabilities of cars. However, due to the small size of the aircraft, it wasn’t very weather-capable. In 1999, Nesmith stepped up to twin-engine, all-weather-capable aircraft. Today, with that aircraft, the ISV is able to service the entire continental United States and has reached into Canada on occasion.
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To hear Nesmith explain the use of aviation in his business, one thing becomes apparent. He isn’t a thrill-seeker, looking to fly low over the tree tops and drop in on customers at breakneck speeds. On the contrary, Nesmith is cautious and calculating like most pilots. This carries over into the way he conducts business. “Everything we do is deliberate and executed to plan,” he says. “We refer to the installations we perform in the field as missions, where we know exactly what we’re going to do and when.” Once the mission is accomplished, usually a couple days later, Nesmith or his technicians come home.
Make Your POS Business More Efficient
While flying to a customer site to perform an install is convenient, Nesmith points to many other benefits of being able to fly himself across the United States. “One of the greatest aspects of our business model is the ability to conduct more business in the same amount of time,” he says. “For instance, we’ve had numerous missions where we’ve flown somewhere to do a job and we stopped in a different state on the way back to prospect a new customer.” In fact, Nesmith recalls one time he flew to Ohio for an install. While he was there, a “now or never” sales opportunity presented itself in Iowa. The path back home was about the same distance going through Iowa, so he stopped and wound up winning the business. The ISV has determined that if he can conduct business in several distant locations in the amount of time it would have taken to get to and back from one in a car, his company is greatly advantaged.
If Nesmith’s team had to rely on commercial aviation, the story would be radically different. “If we flew on commercial airlines, our people would spend hours driving to the airport, hours waiting and then flying, and then more time in a rental car,” he says. “With our own airplanes, we can leave our hangar and get directly to a customer in significantly fewer hours.” In essence, Nesmith and his few technicians are tied up for less time, able to run more missions, and therefore, sell and service more customers. “Most companies hire more personnel and rent an office in a strip mall some place, and that becomes their presence in a geographic area,” says Nesmith. “We use the same personnel we have, but make them more mobile.”
Additionally, Nesmith has used his airplane to deliver a prospect to another customer site to see the Paladin software running and get a face-to-face testimonial. While he’s been doing this for 15 years and can’t recall every instance, Nesmith believes he’s closed 100% of sales when he’s flown someone for a live demo.
POS VAR Tip: Monitor The Cost Of Doing Business
Obviously, all this flying comes at a considerable cost. Nesmith says a good twin-engine aircraft starts at $250,000. Additionally, as of the time of printing this article, aviation fuel is about $4 a gallon. Between those costs and other operating overhead of the aircraft, most projects equate to about $2,500 in travel costs, which Paladin almost always has the customer cover as part of the expenses of an installation. If a project is sizeable enough (in the $25,000 range), Nesmith is often willing to make special trips to the customer on his own dime to help win the business.
However, all this flying not only has a financial cost, there’s also a loss of personal time to Nesmith and his technicians. During nonrecessionary times, Paladin flies 10 to 15 missions a month. The ISV recalls times he was gone for weeks, flying from project to project. The longest Nesmith was away from home was six weeks. To make such travel easier, Nesmith flies with his wife and business partner. Actually, Nesmith’s wife is counted among the company’s field technicians with pilot’s licenses and holds more flight certifications than Nesmith. “When it comes to bad weather, I happily let her do the flying,” he says.
Paladin Data does today the same things it did 30 years ago, just on a much larger scale. The success the company has achieved wouldn’t be possible if not for the roster of pilots/technicians Nesmith employs. “Aviation is something that provides benefits no other means of travel can provide,” he says. “It is expensive, but it allows us to be efficient in what we do.” It’s what’s allowing the ISV to have 40% revenue growth at a time others are happy to be flat.