A University Just Sent You an RFQ. Is It Business You Want, Business You Need, or Business You Should Pass On?

There are few things in the motorcoach business that make a sales team sit up a little straighter than an RFQ from a recognizable name.

A university.

A professional sports organization.

You see the name at the top of the document and immediately start imagining the possibilities.

Their logo on your website.

A nice announcement on LinkedIn.

Maybe a press release.

Your salespeople being able to say, “Yes, we handle transportation for them.”

And, to be fair, there is real value in all of that.

Big-name customers create credibility. A large institutional contract can bring predictable volume, smooth out slower periods, introduce your company to other buyers, and give you an anchor customer that sends a meaningful amount of revenue through the business every year.

That can be very good business.

But it can also be terrible business wearing a really nice university sweatshirt.

And unfortunately, the difference between those two things usually isn’t sitting in the rate column of the RFQ.

The Rate Is the Easy Part

When most operators evaluate a contract opportunity, the conversation naturally gravitates toward price.

“They want 600 movements a year.”

“Here’s what they paid last time.”

“Here’s what we think the competitors will bid.”

“If we can get another $75 per move, I think we can make this work.”

Those are reasonable conversations.

They are also incomplete.

Because the real cost of a contract is not simply what it costs you to perform the work.

The real cost also includes what the contract prevents you from doing with the same capacity.

That distinction matters.

Imagine that someone offers to rent your beach house for the entire month of February.

You might look at the monthly rent, compare it with your mortgage and expenses, and decide it is a pretty good deal.

Fantastic.

Now imagine they want the house for the entire month of July.

Same house.

Same cost to own it.

Same number of bedrooms.

But suddenly the math is completely different because July is the month you normally rent it for three times as much.

Nothing about the house changed.

The value of the inventory did.

Your coaches work the same way.

And that is where institutional contracts can get interesting very quickly.

Read the Fine Print Like an Operator, Not Just a Salesperson

Most RFQs contain plenty of requirements that appear harmless when viewed individually.

Maximum vehicle age.

Wi-Fi.

Outlets.

Specific seating configurations.

Named driver training requirements.

Dedicated account contacts.

Background checks.

Early spot times.

Special signage.

Reporting requirements.

Maybe even restrictions on which equipment can be substituted.

None of these things necessarily make the contract bad.

But every one of them changes the pool of resources you can use to service it.

Suppose a university requires equipment no more than five years old.

On paper, that sounds reasonable.

In your operation, however, it might mean the contract can only be serviced by twelve of your twenty coaches.

Congratulations.

You just took your twelve newest pieces of equipment—the same equipment corporate groups, tour customers, athletic teams, and premium buyers probably want—and committed a portion of them to contract work.

Or maybe the institution requires drivers to complete a specific training program.

Again, perfectly reasonable.

Except now the twenty-eight drivers who could theoretically cover the work become twelve drivers who are actually eligible to cover it.

Or perhaps they require a 4:30 a.m. spot for a movement that finishes at 10:00 a.m.

It may only be a six-hour job.

But depending on what happens next, the real impact could be much larger.

You may have just burned the driver’s clock badly enough that the equipment and driver cannot perform another profitable movement later that day.

You billed six hours.

You may have consumed twelve.

There is no line on the invoice called “Lost Opportunity Because Frank Started His Clock at 3:45 This Morning.”

Maybe there should be.

But there isn’t.

That cost simply disappears into the operation.

Revenue and Good Revenue Are Not the Same Thing

This is where operators need to be careful with one of the most seductive numbers in business: top-line revenue.

Imagine a contract represents $900,000 in annual sales.

That sounds fantastic.

Nobody walks into a management meeting and says, “I have some disappointing news. We just landed $900,000.”

There will probably be smiles.

Someone may order lunch.

Marketing may already be working on the announcement.

But before we break out the sandwiches, there is another question worth asking:

What did we have to give up to produce that $900,000?

If the contract primarily fills Tuesdays in February, Wednesdays in January, and otherwise soft periods where equipment historically sits against the fence, it may be incredibly valuable.

You are monetizing unused capacity.

That is the dream.

But suppose most of the work lands on May weekends, October Saturdays, graduation season, or whatever dates your company historically runs out of equipment.

Now we have a very different situation.

If you historically sold those coaches for $2,400 on those dates and the contract effectively pays $1,700, you haven’t necessarily created $1,700 in revenue.

You may have traded $2,400 for $1,700.

Do that enough times and you can grow your top-line sales while making the underlying business worse.

That is a neat trick.

Wall Street occasionally gets excited about those.

Your banker probably won’t.

Overlay Their Calendar on Yours

Thankfully, this question is not nearly as mysterious as it once was.

Before responding to a significant RFQ, operators should take the customer’s expected schedule and lay it directly over their own historical demand.

Not feelings.

Not memories.

Not, “I think September is usually pretty busy.”

Actual data.

Look at the dates they need service.

Then look at those same days and weeks over the previous several years.

How many vehicles did you have available?

How many did you actually sell?

What rate did you achieve?

How many quotes did you turn away?

Were you bumping against driver capacity?

Were you using your premium equipment?

Were you already subcontracting work?

Suddenly the RFQ starts looking very different.

Maybe their heaviest demand occurs during your slowest period.

Wonderful.

That customer may be a terrific fit even if the contract rate is below your normal retail rate because they are purchasing capacity that might otherwise produce nothing.

But maybe 60 percent of their volume lands during weeks when you are already at 90 percent utilization.

Now the conversation changes.

At that point, you’re not really evaluating whether you want the university business.

You’re evaluating whether you want the university business instead of something else.

That is the question.

Contracts Should Complement Your Business, Not Cannibalize It

There is a concept retailers have understood forever that transportation companies sometimes overlook.

Not every sale is additive.

If a grocery store puts milk on sale, they are hoping it brings someone through the doors who also buys eggs, cereal, steak, laundry detergent, and three things they absolutely did not intend to buy when they left home.

The discounted milk generated additional business.

Good trade.

But if every customer simply buys the discounted milk and nothing else, the economics aren’t nearly as exciting.

Contract work works similarly.

The best contracts often complement your operation.

They fill predictable gaps.

They create base utilization.

They stabilize cash flow.

They give drivers hours during softer periods.

They produce recurring work that reduces the cost of acquiring sales.

They may introduce your company to valuable customers you would not otherwise reach.

That is all real value.

But a contract that consumes your most valuable capacity during your most valuable periods needs to compensate you accordingly.

Otherwise, you aren’t building revenue.

You’re rearranging it.

The Prestige Trap

There is another piece of this worth discussing because we are all human.

Prestige affects decision-making.

There is nothing wrong with admitting that.

Landing the local university feels different than landing Bob’s Refrigeration Annual Fishing Trip.

Sorry, Bob.

The university logo looks better on the website.

People recognize the name.

Competitors notice.

Employees notice.

Potential customers notice.

That credibility has value and should absolutely be part of the decision.

But prestige is a benefit.

It is not a substitute for margin.

You cannot deposit prestige.

You cannot use a logo to make the coach payment.

And your fuel supplier has historically shown a disappointing lack of interest in accepting “Official Transportation Provider” status in lieu of money.

That doesn’t mean you should ignore the marketing value.

It means you should quantify it as honestly as possible and include it in a larger business decision.

Sometimes a marquee customer is worth accepting slightly lower margins because of the opportunities, referrals, stability, or credibility it creates.

Fine.

Make that decision.

Just don’t accidentally make it because everyone got excited when they saw the letterhead.

Business You Want, Business You Need, and Business You Should Pass On

I think there are three useful categories for large contract opportunities.

Business you want fits your operation naturally.

The rates work.

The schedule works.

The equipment requirements work.

The driver requirements work.

The demand complements your existing customer base.

Take a hard look at it and go win it.

Business you need may not be perfect, but it solves another business problem.

Maybe it creates consistent winter utilization.

Maybe it gives drivers dependable weekday hours.

Maybe predictable contract revenue helps justify equipment you need for other customers.

Maybe it creates a strategic relationship that matters.

There can be very legitimate reasons for doing work that would not win an award on margin alone.

But again, make that decision consciously.

Then there is business you should pass on.

This is the category operators have traditionally struggled with.

We hate saying no to revenue.

It feels wrong.

We sell transportation. Someone wants transportation. We have buses.

Why wouldn’t we sell it?

Because sometimes your inventory is worth more somewhere else.

Airlines figured this out decades ago.

Hotels figured it out.

Rental car companies figured it out.

If you own a hotel with 100 rooms and Taylor Swift announces a concert across the street, you don’t sell all 100 rooms six months early at the Tuesday-in-February rate just because someone offered to buy them.

Your inventory is finite.

So is ours.

Once that coach and driver are committed, that capacity is gone.

Create an RFQ Scorecard Before the Next RFQ Arrives

The smartest time to decide how you evaluate contract work is before a giant contract lands in your inbox.

Build a simple internal RFQ scorecard.

Consider factors like:

• Contract rate versus historical achieved rate
• Dates of service versus historical utilization
• Driver-hour impact
• Vehicle restrictions
• Amenity requirements
• Training requirements
• Likelihood of deadhead or inefficient positioning
• Cancellation terms
• Payment terms
• Administrative burden
• Predictability of volume
• Marketing or prestige value
• Cross-selling opportunities
• Strategic value of the relationship

Then put some discipline behind the process.

The objective isn’t to create a spreadsheet so complicated that NASA calls asking to borrow it.

The objective is simply to force the business to look beyond the number printed next to Annual Contract Value.

Because that number alone doesn’t tell you whether the contract is good.

This Is Where Data Becomes Useful

For years, our industry ran much of this process from memory.

Ask someone whether the first weekend in May is busy, and a longtime employee will probably have an answer.

Ask what your average achieved rate was on that weekend across the last three years, what percentage of your eligible fleet was committed, how many quotes you declined, and what equipment classes were constrained?

Now things get a little quieter.

That isn’t because operators aren’t smart.

It is because, historically, getting the answer has meant pulling information from multiple systems, old spreadsheets, accounting reports, dispatch records, sales data, and the collective memory of three people who have worked there since fax machines were considered innovative.

That is exactly the problem technology should solve.

Your pricing calendar and reporting should help you understand what your capacity has historically been worth.

Not theoretically.

Actually.

When an institutional buyer sends an RFQ covering eighty dates, you should be able to look at those dates against previous demand, existing bookings, fleet availability, rates, and operating constraints and make a business decision with your eyes open.

That is what good operational data is supposed to do.

TBN isn’t there to tell you whether you should bid on the university contract.

You know your market.

You know your customers.

You know your business.

Our job is to make sure you can actually see the information you need to make that decision.

Because instinct is valuable.

Experience is valuable.

Relationships are valuable.

But they become exponentially more useful when you can put real numbers behind them.

Winning the RFQ Isn’t Always the Win

We spend a lot of time in business talking about winning.

Win the quote.

Win the contract.

Win the customer.

And that makes sense.

But sometimes good management requires us to redefine what winning looks like.

Sometimes winning means submitting the right price even if you know it may be higher than your competitor.

Sometimes winning means negotiating the requirements so the work actually fits your operation.

Sometimes winning means getting a great anchor client that keeps equipment moving during periods you historically struggled to sell.

And sometimes winning means reading the RFQ, running the numbers, smiling politely, and letting someone else have it.

That isn’t losing business.

That is choosing your business.

There is an enormous difference.

The companies that understand that difference will be better positioned to protect capacity, grow margins, and make decisions based not simply on how much revenue they can generate, but on how valuable that revenue actually is.

Because the biggest contract in the stack isn’t necessarily the best one.

The best contract is the one that makes the rest of your business stronger.

And before you decide whether that university RFQ belongs in your operation, that is the question worth answering.

Does this business make us better—or does it simply make us busier?

#TBNDrives #TheFutureIsHere