Montreal’s agencies are making two major miscalculations in the business model which they follow and which are costing them considerable money. The purpose of the business is to generate revenue and the way to do that is to maximize girls’ contact time. Why then are all of Montreal’s agencies following the same flawed plan?
The two key miscalculations:
1. Massive undercharging on calls outside of central Montreal. Agencies are charging $20 to go to the West Island, Laval, the South Shore, and the East End. There’s one word for this: nuts. A trip from downtown to Laval, for example, is going to take 30 minutes at the best of times, an hour in the worst. The driver is going to spend $10-$15 for gas alone while the girl's income potential for the evening is reduced by $90-$180. Furthermore, by exposing both the driver and girls to Montreal's wildly unpredictable traffic conditions, the risk of late arrivals at subsequent dates and possible cancellations by angry clients, sullying the agency's reputation, is escalated. A trip to the South Shore or West Island costs the agency $120-$200 between direct expense and lost income potential and for that they charge $20. Can someone please explain this to me?
2. Not encouraging multi-hour dates. One hour dates mean more time in the car. More time in the car means fewer dollars in the till. As I will demonstrate, a $180/$320/$440 rate structure will not only bring in more money overall, but will drastically reduce lateness to appointments and provide a sharp reduction in the amount of time girls are spending in the cars. The net result: fewer angry clients, happier girls.
Here are a couple of selective scenarios:
1. Agency charges $180 per hour. Girl works from 4 pm to 2 am, a 10 hour shift.
Call 1: 4 pm, Hyatt downtown, 1 hour. $180.
Call 2: 5:30 pm, Chablis St. Jacques, 1 hour. Driver is 10 minutes late picking the girl up due to traffic. Rush hour traffic causes further delay. Girl doesn’t arrive at Chablis until 6:00. $180.
Call 3: 7:00 pm, Rosemont. Delayed until 7:30 due to problems with call 2. Girl gets to Rosemont at 7:45. $180.
Call 4: 8:30 pm, Sheraton. Customer cancels when he learns that the girl won’t arrive before 9:15. The call is not replaced.
Call 4: 10:30 pm, Laval., 1 hour. $200. After the previous cancellation, she arrives at Laval on time.
Call 5: 12:30 pm, Chablis, 1 hour, $180.
5 calls: $880, 5 hours of customer contact, 4.5 hours in car, $92.63 in revenues per hour on duty
Note that this is not a worst case scenario. Imagine what this would look like if there had been more than one call beyond the center of Montreal Island. Imagine if the Laval call had been at 6:30 or if there'd been a South shore call at the same time.
2. Agency charges $180/$320/$440.
Call 1. 4 pm, Westmount, 3 hours, $440.
Call 2. 7:30 pm, Old Montreal, 2 hours, $320.
Call 3. 10:00 pm, Vogue, 1 hour, $180.
Call 4. 11: 30 pm, Mile End, 2 hours, $320.
4 calls: $1260, 8 hours customer contact, 1.5 hours in car. $132.63 in revenues per hour on duty
There are a few things at play here.
1. The more calls a girl has, the more time she has to spend in the car between calls. Time spent in the car is wasted. Not only does it generate no income, but because of Montreal’s traffic nightmare, her arrival time at appointments becomes more unpredictable the more times she has to be transported and the farther she needs to be transported.
2. The more money a girl makes, the happier she is. The less time she has to spend in the car, the happier she is. The happier the girls are, the easier recruitment becomes for the agency.
3. The less driving an agency has to do to get girls to their calls, the better will be their record of on-time delivery. The better this track record, the happier the customer. The happy customer is the one who will call back.
4. Drivers are getting a little more money for driving to the outlying areas and they’re spending most of it on gas. When you consider wear and tear on their vehicles, they are actually losing money. And that doesn’t even take into consideration the time they are wasting and the loss of income to driver, booker, agency and girl. The girl’s most valuable commodity is not her looks or her service: it is her time. In scenario one above, the young lady spent over 4 hours in the car, earning nothing. Nothing for her, nothing for the agency, nothing for the driver, nothing for the booker.
In the scenario above, the girl spent an average of 45 minutes between calls. That’s $135 not earned at full rate. Discounting the second hour at a rate of $140 turns that nothing into $105 earned. Discounting the third hour at a rate of $120 turns that nothing into $90 earned. It’s quite easy to see how the girl in scenario 2 above generated $380 more than the girl in scenario 1 in the same amount of time. She had three more hours of customer contact, three fewer hours in the back seat.
The question of what to do about calls to outlying areas is the trickiest thing here. The clearest fact is simple: the agencies are adding a $10-$20 charge to travel to these places and that money is going to the driver. He is losing money on the trip and the girl is losing time, earning nothing. In point of fact, the agency should be charging $40-$50 for the driver and $90 for the girl’s time. Instead, they’re getting $20 when they should be getting $130. Wow!! The choices are three: 1) continue to take this beating, 2) raise the charge for trips to the South Shore, West Island, etc., 3) discontinue service to the outlying areas. None of these answers is a good one. Choice one is expensive, choice two will lose business to competitors who continue to absorb the beating, choice three will require the agency to find another way to make up the lost business.
In the end, choice three is the logical one. And the way to make up the lost business is by generating longer appointments.
In summary, not a single agency in Montreal is making an effort to maximize the girls’ number one asset: her time. By operating under a business model that does nothing to encourage multi-hour dates, they are exposing the girls to long periods of inactivity between calls.
What I’m suggesting here isn’t perfect, but it is certainly a much, much better model than any agency is operating under today. And, no, no, no, no, I’m not going into the business. This was just a bit of exercise on an off night for the Red Sox.