Because of the shift to risk vehicles, your team will have to adjust to inspecting different makes and models, and cars will leave your lots with more miles on them. Your customers will be more apprehensive about “owning up” to damage on a 35,000-mile vehicle, when in the past they were driving vehicles with less than 5,000 miles on them. The challenge is only going to get tougher.
Staffing your return agents appropriately, creating urgency for your frontline, return and service teams, allocating your admin team to the right projects and knowing your options and entitlements as an operator are all within your control in the coming year.
Take Action
Make the business case to your frontline and return team on the true cost of a $500 unallocated claim.
Share with them that if an operation is posting a 5 percent profit margin and an unallocated claim goes uncollected, it requires the counter to generate an additional 250 rental days at $40 per day to make up the lost $500. Set very clear walk-through guidelines and damage inspection slip guidelines for your team.
Evaluate the true cost of keeping recovery operations in-house. Ask yourself the following questions:
- What is our true labor cost?
- Where can those hours be re-deployed into other efforts like sales or administrative?
- Can we save expense and cut the hours?
- What is the cost of outsourcing the recovery process to a third party?
- What are we truly collecting on short-term cases versus waiting and collecting more by being more patient?
- Do we have the capabilities to understand all of the case laws and entitlements?
- Did I get in the car rental business to rent cars or process claims?
Industry experts feel that outsourcing the recovery process to a third party yields a 20 percent higher collections return and saves on internal payroll.
Reevaluate Your Frontline Sales Force
With the increase in unemployment, you can fill your recruiting pipeline with strong candidates.
Since the start of the recession in December 2007, the number of unemployed people increased by 2.7 million. November 2008’s unemployment rate rose to 6.7 percent. Strong sales professionals are out there!
There are many energetic, professional candidates in search of sales or customer service opportunities. Now is the time to evaluate your frontline sales force, measure them in a fair fashion and determine your true incremental sales upside. Even if volume is low and you cannot support new staff, it is well worth your time to fill your recruiting pipeline with strong candidates.
When business does improve, and it will, you will again be in a war for talent with your competitors and other recovering industries.
Take Action
Begin the evaluation of your current team with these questions:
- How does this frontline sales associate or manager perform against their peer group and location?
- Do they have a positive influence on their team?
- Are they good ambassadors of our business?
- Knowing what I know now, would I rehire this person if they were applying today?
If the team member in question does not score well on the evaluation, the answer is clear. Note that without the proper training and support and a candid review process, this evaluation is tougher to apply.
Strengthen Your Team’s Ambassadorship of Your Company
The current economic conditions create urgency to have candid conversations with your team about representing your brand well.
Your ability to lead your management team and frontline sales force will be tested over the next year. This will require some soul searching and an evaluation that begins by looking within.
Take Action
Is your message positive and realistic or does it revolve around doom and gloom?
Is your message taken seriously by your team?
Do you create the type of urgency on incremental sales, customer service, claims recovery and recruitment that your boss creates for you?
Now is the time to have candid conversations with your team about representing your brand well.
In the past, putting up with the “little things” a manager might have done poorly or having a “slightly rude” frontline representative on the counters may have been okay. Now it is not. The current economic conditions create urgency to have these delicate conversations. Fortunately you can control when and how those conversations will take place.
Putting incremental sales, customer service, claims recovery, talent assessment and a positive attitude at the top of your list will help you and your team post higher results and weather the current marketplace. Look at the challenges ahead as an opportunity to improve.
Ken Stellon is a vice president of consulting services for the Khoury Group. The Khoury Group has been a key performance partner to the car and truck rental industry for more than 15 years. Their mission is to increase profit by assisting businesses to create service-based sales cultures. Representatives from the Khoury Group are monthly contributors to Auto Rental News Q&A. Ken Stellon can be reached at 630-788-2879.
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