Q&A With Ken Lucci of Driving Transactions
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When Ambassador Limousine Founder Ken Lucci was at the top of his game, he made the bold decision to retire from luxury ground transportation. But his retirement was short, and this serial entrepreneur returned to the limousine world, first as an author—penning a book on chauffeur training—and now as a financial consultant with his company Driving Transactions. As a consultant and mentor, Lucci has been instrumental in helping steer operators toward calmer waters during the last troubled months. Chauffeur Driven spoke to Lucci about his time in the industry, and what the future holds for operators struggling during the pandemic.
Chauffeur Driven: Let’s start with your experience in the industry. When did you begin?
Ken Lucci: It’s a long story, but I was basically a private security consultant for the New York Yankees and the Steinbrenner family. I was on a retainer from 1999 through 2012.
In 2005, I was getting ready to retire. I was 41 years old. George Steinbrenner called me—I was working for his son at the time—he said, “Look, I understand you want to retire, but my son needs you.” Long story short, I was in his eye. He had me come to his office right after Labor Day 2005, and he said, “Find yourself something to do that will keep you close to us.” He said that there was no New York-style, top-shelf limousine company in the Tampa area at the time, and that piqued my interested.
L to R: Ken Lucci of Driving Transactions with Financial Analyst Cole Weber
Steinbrenner told me that I would need to learn the hospitality industry. He had a relationship with a major luxury hotel in New York where he arranged for me to work behind the concierge desk for 30 days and work the front door. Immediately, it almost talked me out of the industry because it was so miserably hectic. But, it turned out that I was really good as a concierge. Ultimately it was just being very personable, treating people like VIPs, and making phone calls.
CD: As someone completely new to the industry, how did you set yourself apart from your competitors?
KL: After basically living at the hotel for 30 days, I rented some SUVs and began handling the transportation for all the players and VIPs who came down to Florida for spring training in 2005 and 2006. So, in 2007, I started Ambassador Limousine. Once the things got going, I began doing a lot of business with luxury hotels on Clearwater Beach and St. Petersburg Beach.
My goal for Ambassador was total differentiation. For instance, at the time, everybody else was offering Lincolns; I decided to go with Cadillac. In Florida, many of the chauffeurs would wear resort clothing or even Hawaiian shirts. I put my chauffeurs in black suits with gold ties because that’s what I saw in New York. We grew dramatically in 2007, finishing the year at a million dollars, which, when you look at the industry in hindsight, we already were bigger than a lot of companies around.
Honestly, I had no real knowledge of any of my competitors at the time. I just kept to myself until I met (the late industry consultant) Tom Mazza and put him on a retainer for a year. That’s how I became a huge believer in hiring “outside eyes” for your business. This is hugely important to entrepreneurs because it really makes you face the realities of what you cannot see when you’re immersed in your operation.
In 2011, I was approached by AT&T to handle the transportation for the 2012 Democratic and Republican conventions. It was a unique situation—a lot of people don’t realize that AT&T is the largest corporate sponsor for both conventions. The president of the company said to me, “We’ve done business with so many limo companies over the years, and you do it right. You’re our guy.” They hired us, and it was a year and a half of planning. When it was all said and done, we did $1.4M in 14 days between the two conventions.
CD: Arguably, you decided to retire at the peak of your career as an owner/operator. What was behind that decision?
KL: After the conventions, my accountant called me and said, “You’ve done $5M in work, and netted more than a million dollars this year ... what do you want to do now?” I told him that I wanted to sell as fast as I could. I couldn’t take it anymore.
At the time, a business acquaintance who had a contract at a big hotel reached out and asked if he could borrow equipment on the weekends; I was primarily doing corporate work, so I had a lot of sedans available.
I said, “I have a better idea–why don’t you buy my company?” Basically, he said that he didn’t have any money. I asked him if he could scrape together a down payment, and then I showed him how to buy it over time. We entered into a 36-month contract, and it was a very creative deal where we both did extremely well with the transaction.
CD: Since we’re having this conversation, it’s safe to say that your retirement from the industry was somewhat short-lived. What brought you back?
KL: I got pretty bored.
Let’s backtrack a bit. In 2012, after the presidential conventions were finished, Shelly Taylor—who is still my assistant in Florida—said that I either need to go on vacation or the team was leaving. So, I took some time and took classes at the Ritz-Carlton Executive Leadership Center. To me, it was better than getting a hospitality degree from college. I went and lived at The Ritz Carlton Pentagon City for 30 days. I took all their executive leadership courses and came back and rewrote all the chauffeur training manuals for Ambassador Limousine.
After I sold the company, people kept asking how I grew the company from $0 to $5M, and I would tell them that the whole thing starts with the service experience. It doesn’t matter what kind of equipment you have. What matters is the service experience you deliver. It’s all about control; it’s all about controlling every aspect. I’m talking about the thousand little details of the service experience starting with how you answer the phone to all the way through to the end of the trip. Then, it’s how you follow up and make sure that every trip was flawlessly performed, and you verify quality with your client.
I basically took training manuals and put it into a book, Driving Your Income: How to Maximize Your Income as a Professional Chauffeur. Then I started doing trade shows, as well as training and consulting for variety of people. Since 2016, I’ve consulted with 108 operators and their chauffeurs at their locations across the country.
CD: Tell us about your Driving Transactions consultation service.
KL: I started to see a need in the industry for strategic, operational, and sales consulting. When I would work with companies doing chauffeur training, many of them would ask me for strategic consulting advice such as increasing sales or reorganizing a reservations department.
I’ll give you a perfect example: A large operator called me and said he was having service problems and couldn’t figure out why. I went in and drilled down into his reservation system and basically found some flaws in the dispatch tracking where there needed to be some protocol changes. The company had no reservations review tool and no quality assurance. I got them to do reviews on every single trip. This brought their incidents down from about 8 percent to 2 percent.
So, I started Driving Transactions to help operators. I got trained on Sage valuation software, and then I got my business broker’s license. I also took a course to appraise vehicles.
When an operator calls us because he’s looking to sell, they often approach it as if it’s a simple real estate transaction. But, there’s only been one company that I’ve walked into that has been ready to sell—meaning their financials were all in order. That’s really what we bring to the table.
Driving Transactions’ financial analyst, Cole Weber, graduated from Penn State, and without question is the smartest mind I have ever met in his generation. And he’s the guy that does all of the financial forecasting. We’ve got it down to a science. Before the pandemic, we were doing more merger and acquisition consulting. We were spending a lot of time doing deep-dive enterprise valuations—30- to 40-page narratives on companies.
CD: How has your operation changed since COVID-19 hit?
KL: In April, we went into crisis mode with operators. We were advising them on situations such as how to apply for PPP, how to shed as much overhead as possible, and who to furlough or retain. We went through what we call the lifeboat drill—what do you need in a lifeboat to survive?
In the past several months, we have evolved into helping them with critical cash for revenue and revenue return analysis of critical cash usage. It’s very simple and straightforward—we look at when you are going to run out of money. It’s all about enterprise resiliency. In other words, how much cash do you have and how quickly is your revenue returning? Financial forecasting is the only way to know how resilient you are. Hope is not a business strategy; the most important things an operator should be doing are financial planning and reaching out to his top customers continuously.
CD: While you certainly don’t have a crystal ball, what is your outlook for the future of the luxury ground transportation industry based on what you are seeing?
KL: Essentially, the industry has collapsed, and it’s going to look very different as it comes out. Executives are going to change their travel protocols. Telecommuting is going to change the need for business trips and daily shuttles. Public transportation is going to change. My prediction, based on all the research I’ve done, is that recovery is going to take between 24 and 36 months. Because there will be monumental shifts in corporate travel policies and expenditures in meeting, conference, and convention size, we will have to adjust our thinking.
CD: What kind of advice are you giving operators in the current climate?
KL: So, in this new footprint, you’re going to need drastically better technology to interact with your customer. You’re going to have to change your operation. In many cases, some of the silver linings have been the reservations and dispatching model may stay remote. For instance, I have an operator in San Francisco who has a dispatcher working out of a house in Chicago and all of his reservations are being done from Boston.
Unfortunately, we could see many operators not survive because of a lack of resiliency and diversification of revenue. I work with an operator who laughed at me two years ago when I said he needed to get into the leisure business. He had all his eggs in the corporate basket. However, now it’s the companies that were diversified on their fleet who have business trickling in. They have some cash coming in and have shown resiliency.
I can tell you if you want to recover and make it through this, you have to celebrate every little inch forward. While there’s no way to put a completely positive spin on things in the middle of a catastrophe, there will be silver linings that come out of this. I really believe that. First and foremost, it is forcing the “young guns” to really hunker down and focus on financial forecasting—to dig into their operations at a granular level. I mean, I have guys that were doing $5M now answering their own phones. They are bound and determined to stay in the business. It has brought out some healthy aggressiveness. [CD0920]