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Dealer Focus
The "How To's" of Maintaining & Selling Autopilots - Profitably

Bob Ferguson at work selling an S-TEC

Autopilots Central, Tulsa OK

The international network of 750 S-TEC Dealers is a "melting pot" of Avionics Shops who have become S-TEC dealers for the primary purpose of selling autopilots. On the list are shops who sell other avionics and offer autopilots to round out their product offering as well as shops that make autopilot work their primary effort. One of the more noteworthy in the latter category is Autopilots Central, Inc. of Tulsa, OK. APC's start up and history was well covered in the January 1995 Avionics News article "How to Grow a Shop". The interview which follows discusses more about how APC has accomplished being named to the S-TEC Top Ten three of the last five years. With the permission of Avionics News, excerpts from the article are used where appropriate. We have specifically avoided rehashing the AEA article and suggest that readers make reference to that publication for more information about Autopilots Central, Inc. editor

S-TEC: "In general, what can Autopilots Central (APC) attribute their success to?"
FERGUSON: "APC was founded years ago as an autopilot shop - to maintain and sell autopilots. We specialize in autopilots and have built an entire FBO operation around autopilots. An FBO with numerous profit centers, each delivering significant profit to the overall success of the company, yet each owing its success to business which is peripheral to the maintenance of autopilots.
"A large percentage of aircraft requiring autopilot repairs come in the front door with other items needing attention. It is commonplace to hear 'my #2 Comm isn't transmitting and my EGT just quit. Can you fix them while you're overhauling my Century 2000?'
"Over the years we have moved from farming out these work efforts to carefully adding maintenance capabilities in avionics, instruments and airframes, in order to support our autopilot customers. The instrument shop was especially important in our growth. Almost every autopilot that comes in is gyro driven in some respect, so a lot of the problems with autopilots are gyro related. It is the first place we look.
"However, we have also been very careful not to divert our autopilot specialists from our core business since their specialization is the real key to our success. An autopilot man at APC is seldom asked to do other avionics work. A guy that can repair autopilots is a different kind of animal than a guy that fixes radios. Since an autopilot is a marriage of both electronics and their mechanical interfaces with the airframe, an autopilot man must understand the two disciplines and do repairs to both types of systems at the same time."

S-TEC: "Where do you find that kind of person?"
FERGUSON: "You grow them! And that's not easy to do. We try and find electronics trainees who can start by removing systems from aircraft which are in for repair. We have found that a good resource for these people is the TV or Stereo repair industry. If you can find a good one with the right attitude, who is a self starter, needing little if any management, who wants to learn, and who has an understanding of basic circuitry, you are very lucky. We have often found good people that way. Then it's OJT (on the job training) and accepting that it will be 2 years before you can bill 80% of his time. Next, you coddle, cajole and nurse him along doing all that you can to keep him. This process also requires that micromanaging is forbidden. A good autopilot tech knows what to do and when to do it.
"The process also includes paying TOP wages and offering the finest in fringe benefits from the first day they start. It's a painful process but we haven't found a better way yet. If you lose a good one and he wants to come back later, by all means take him back."

S-TEC: "What kind of autopilots do you work on most often?"
FERGUSON: "We are set up to repair all Cessna, Bendix, Honeywell, Mitchell/Century, most King and Brittain systems, although most Brittain repairs now go back to the factory here in Tulsa. Most of our billings come from Century and Cessna repairs and the gamut of aircraft we work on covers Cessna 150's to Citations, Beech's, Pipers, Merlins and even Bellancas. We normally work on 1200 to 1500 individual autopilots each year. At least 30% of our work comes from other avionics and autopilot shops whose capabilities or workload dictates that it is better for them to send work to us rather than do the repair in their facility.
"By the way, when we repair a system in an airplane which comes to Tulsa we always fly the airplane after the repair. We don't like the customer test flying our work on the way home from APC. To date in 1996, I have flown 367 test flights after repairs"

S-TEC: "You didn't mention S-TEC."
FERGUSON: "Being an S-TEC repairman is a lot like being a Maytag repairman. Since the S-TEC autopilots seldom need repair we haven't even installed the S-TEC test equipment in a test bench permanently. The real estate is too valuable. No one has an S-TEC dealership for the profits he can make on the repair bench."

S-TEC: "You have been an S-TEC Top Ten Dealer in both 1995 and 1996. How does your autopilot maintenance work help you sell new autopilots?"
FERGUSON: "This isn't rocket science. It's a matter of watching for an opportunity to present itself. Since we are equipped to maintain a lot of the very old autopilots we frequently get inoperative systems in that turn into repair quotations totaling thousands of dollars. Many times we are the only place an aircraft owner can turn since we have an extremely large inventory of used parts and salvage systems. When this happens, we evaluate what the aircraft owner would spend installing a new autopilot. (Thanks to the wide range of S-TEC systems and the extensive list of STC's available, the S-TEC quote book gets a lot of usage.) If the repair cost estimate equals a large percentage of the S-TEC installed price, we quote both the repair and the S-TEC installation. Depending on the situation, we often tell the airplane owner that although we can repair his autopilot this time, there is no guarantee that we'll be able to make a repair next time.
"S-TEC dealers who don't have the option of repairing some of the older systems will get even more opportunities to quote S-TEC than we do."

S-TEC: "How do you know which S-TEC system to quote a prospective buyer?"
FERGUSON: "I first consider the system he's replacing and the features it has. In the early stages of the conversation, I try to learn what the buyer wants his autopilot to do for him. Next, I consider the aircraft so I won't recommend a system which would under-equip the airplane. If there is a disparity between what the customer wants and what I believe he should have, I then make my recommendation and explain why he should consider the alternative system."

S-TEC: "What factors are most important to an autopilot buyer?"
FERGUSON: "In almost every case the price is very important, but most buyers listen to our recommendations very carefully. After discussing features and the benefits they give the pilot, I sell hard on the benefit to cost ratio. In other words, I sell the value of flying an S-TEC in the future rather than repairing the old system and bringing it in for more work year after year. I find that my extensive flight experience is invaluable in talking to a pilot in terms he understands. It makes the whole process easier.
"The S-TEC 'building block' concept makes selling an S-TEC easier as well. And it goes without saying that the reliability and performance reputation of an S-TEC are important."

S-TEC: "What are the problems you face in selling autopilots?"
FERGUSON: "Getting the customer to part with his money! Sounds a little basic, but many feel they'd rather spend the $5,000 to $15,000 on paint and interior, even when their airplane is not a 'dog.' I have to often work very hard explaining how much lower the cockpit workload will be and, therefore, how much more they will enjoy each flight with a new autopilot.

"Another real challenge is selling an autopilot for installation in an airplane where the price of the autopilot is almost as much as the airplane is worth. This problem often boils down to how badly the pilot wants a new autopilot. We sometimes solve this problem best by selling the lower end systems. However, if the pilot really wants Glideslope Coupling capability, my job then becomes helping him through the consideration that he can get it, but only at a price. After understanding all that a System 40 or 50 can do for him, more often than not he'll decide on one of those rather than no autopilot at all."

S-TEC: "How do you quote autopilots? Do you quote List Price-Installed?"
FERGUSON: "For many years we did quote List Price-Installed on most autopilots. We don't any longer. Today, since the fleet is much older, we often run into more installation challenges than we did when the airplanes were younger. Therefore, our installation times have grown and we have to recover that time. Another factor as we prepare a quote is the shop schedule. As of now our install shop is booked until March, so our quotations are impacted accordingly."

S-TEC: "What do you see in the future of General Aviation?"
FERGUSON: "GPS - GPS - GPS. VFR GPS and more IFR installations than in the past. Cessna's new production is exciting and I hope they'll sell as well as Cessna thinks they will. The ratio of selling prices between a new airplane and a luxury car 15 years ago still holds today, so sales may be better than any of us imagine. We sure hope so because there is a lot of unrealized demand in the market."

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