The Week's Features
Three-time cancer survivor is doing what he loves
App, web-based service provides lien-holder contact information
Digital Recognition Network CEO lays out company's vision
Unit designed to bring greater awareness to Move Over law
Buddy's gets farmer's tractor with corn silage in open field
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Center-Divider U-turns

UTurns 45518By Randall C. Resch

Flatbed carriers are lengthy and difficult to maneuver in U-turns (the operator typically must use several traffic lanes to make careful approach into openings of center dividers). U-turns are especially dangerous and typically banned by many states because of increased accident risk to motorists.

Completing a full U-turn requires that opposite lanes are clear of approaching traffic prior to tower's driving into opposite-side traffic lanes. With traffic at speeds of 80 mph, impact is imminent. More importantly, towers oftentimes forget that the carrier's deck remains in traffic lanes.

In May 2010, a Florida Highway Patrol investigation stated a flatbed carrier operator attempted to make an illegal U-turn in a center-median opening of the Florida Turnpike. The tower allegedly slowed to prepare for the U-turn in the center median, yet the carrier's deck was hanging in southbound traffic lanes. As a result, a following motorist hit the carrier's deck causing their van to roll. The motorist was killed; the tower was not injured.

In January 2014, a carrier operator allegedly attempted to make a U-turn in the center divider of Hawaii's Pali Highway. Per Hawaii law, U-turns in center dividers and medians are prohibited. A news account of the accident reported the tower slowed in traffic (near the fast lane) and entered the U-turn opening. While waiting for approaching traffic to clear, an elderly motorist hit the carrier from behind, shearing the roof off their vehicle. The impact caused the Toyota Yaris to spinout and it came to a stop on an embankment. The tow operator pleaded no-contest to causing the crash.

In investigations where vehicles are hit from behind, it's commonly thought that the striking motorist is at fault. Considering traffic moving at speed, a following motorist may not see the back end of the carrier protruding into traffic lanes after it crosses lanes. Obviously, center-divider openings aren't all that wide, requiring lengthy vehicles to swing wide to complete the turn. When viewed from varying angles, a flatbed carrier could be nearly invisible to following drivers.

In June 2015, California approved Vehicle Code Section 21719. (a) "Use of Shoulders by Tow Trucks," as being a necessary component of incident response. For tow trucks and flatbed carriers to lawfully use emergency shoulders, U-turn openings on California highways demanded specific wording. I've included the entire code for using shoulders, where allowable use of U-turn openings is covered. (Note: California tow trucks are not considered first responders.)

"Section 21719. (a) Notwithstanding any other law, in the event of an emergency occurring on a roadway that requires the rapid removal of impediments to traffic or rendering of assistance to a disabled vehicle obstructing a roadway, a tow truck driver who is either operating under an agreement with the law enforcement agency responsible for investigating traffic collisions on the roadway or summoned by the owner or operator of a vehicle involved in a collision or that is otherwise disabled on the roadway may utilize the center median or right shoulder of a roadway if all of the following conditions are met:

"(1) A peace officer employed by the investigating law enforcement agency is at the scene of the roadway obstruction and has determined that the obstruction has caused an unnecessary delay to motorists using the roadway.

"(2) A peace officer employed by the investigating law enforcement agency has determined that a tow truck can provide emergency roadside assistance by removing the disabled vehicle and gives explicit permission to the tow truck driver allowing the utilization of the center median or right shoulder of the roadway.

"(3) The tow truck is not operated on the center median or right shoulder at a speed greater than what is reasonable or prudent having due regard for weather, visibility, the traffic on, and the surface and width of, the roadway, and in no event at a speed that endangers the safety of persons or property.

"(4) The tow truck displays flashing amber warning lamps to the front, rear, and both sides while driving in the center median or right shoulder of a roadway pursuant to this section.

"(b) For purposes of this section, "utilize the center median" includes making a U-turn across the center median."

California's law is specific for use of shoulders and center-divider U-turns. This training topic demands towers understand the full meaning and requirements of their own state's laws. The key here is "authorization." Remember, although you may have permission by the requesting agency to use either, you are completely responsible for safe-vehicle operations. U-turns on high-speed highways is a dangerous practice. My best advice for safety to all: drive to the next exit for return.

Calculating the Lifetime Value of Customers

1 7cd92By Don G. Archer

Most would agree that the life blood of any business is the ability to quickly and inexpensively acquire new customers. This is especially true in the towing business where customers only need you when they need you.

Studies show it costs between 6-7 times more to gain new customers than to retain existing ones. While it is true that having a steady stream of new customers can have a great impact on your bottom line, knowing how to measure what marketing channels provide the best return on investment and how to increase the lifetime value of each customer can be a little tricky.

To make your marketing work you must weigh cost versus return. For example, if you spend $1,000 per month on radio advertising you need a way to track that investment. This can be done using a dedicated phone number or a special "radio-only" offer. You can then begin to measure what it costs to get customers, which is called your Customer Acquisition Cost, (CAC).

To measure CAC, divide the dollars spent during a specific period of time by the number of new customers generated from your campaign during the same period of time. Let's say that over a six-month period you invested $6,000 and were able to determine that your radio ads generated 300 new customers. Your CAC would then be $20.

To know whether a $20 CAC is a good investment you must first know how much you are profiting from each call. One fast way of doing this is to simply add up all the towing revenue generated throughout the year, subtract your expenses for the year, and then divide that number by the number of tow calls you did for the same period.

Because towing businesses provide a variety of services to a wide range of customers and invoice amounts can vary greatly, the best way to determine profit per tow is to use some sort of towing software that allows you to segment calls into categories (such as motor club calls, cash calls, police calls, etc.) and gives you the ability to apply expenses accordingly.

Here's a formula to use: annual towing business revenue - annual towing business expenses ÷ number of tow calls performed = average profit per tow.

Sample Company: ABC Towing—$1,000,000 Annual Revenue from Towing
Annual Revenue From Towing $1,000,000
(Minus) Annual Towing Expense, Not including radio marketing $600,000
Annual Profit $400,000
(Divided) By Number of Towing Calls Performed 10,000
(Equals) Average Profit Per Tow Call (PPT) $40

Now that ABC Towing knows their average Profit Per Tow (PPT) they can subtract their CAC from the radio ad example above.

Average Profit Per Tow (PPT) $40
(Minus) Radio Ad Campaign (CAC) $20
(Equals) Net Average Profit Per Tow, From Radio Campaign $20

Whereas all ABC Towing's other tows were generating, on average, a $40 profit, due to a $20 CAC the tow calls generated from the radio ad campaign only netted $20 profit. Doesn't look too enticing does it?

Now, let's calculate lifetime value.

Customer lifetime value (CLV) is defined as the projected revenue that a customer will generate over the lifetime of their relationship with your company.

One rough way of estimating average CLV is to look at the amount of times repeat customers have used your services.

For example: If ABC Towing started keeping accurate records five years ago and they have documentation to support that there were 100 repeat customers who used their services an average of six times during that period, then they have a point at which to start. They already know that the average Profit Per Tow (PPT) is $40, so they can assume that the average CLV is $240.

Now that we know that the average profit of gaining a new customer is at minimum $240--then the sting of the cost of customer acquisition doesn't hurt so much.

The next step is customer retention, and we'll tackle that in an ensuing article.

American Towman Field Editor-Midwest Don G. Archer is also a multi-published author, educator and speaker helping others to build and start successful towing businesses around the country at Don and his wife, Brenda, formerly owned and operated Broadway Wrecker in Jefferson City, Mo. E-mail him direct at
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