Car Rental Operations: Five Areas You Can Improve on Now

It has been an extremely challenging six months for the car and truck rental industry and for most industries in the global economy. Our heads have been filled with Wall Street shake-ups, government bailouts, credit crunches, auto manufacturers on the brink of bankruptcy and dismal unemployment numbers. And, finally, the government issues an official statement informing us we are in—and have been in—a recession. (Thanks for the heads up, Uncle Sam!)

It is tough find a silver lining in these storm clouds, but it is critical that we recognize one positive truth in front of us all:

We cannot control those dismal issues.

Why is that positive? Because you are not alone! No one can control these issues—not your competitors, your corporation, your boss, your frontline sales teams, nor your sister industries, the airlines and hotels. Once we accept that fact, we can focus on the issues in our business we can control and make a tremendous impact.

Design an Incentive Plan for Incremental Sales Opportunities
A $3-per-day increase in incremental sales can double an operator’s overall profit.

Developing a service-based sales culture and targeting incremental sales are two of the most impactful ways to increase your bottom line. For every $100 the industry collects in incremental sales, $60–$70 is added to the bottom line as profit. In most cases a $3-per-day increase in incremental sales can double an operator’s overall profit.

Not only are these products lucrative, they also enhance the customer’s experience. Presenting a nicer and more appropriate vehicle based on customers’ needs helps the customer experience. Allowing your customers to waive their financial responsibility for a vehicle they do not own while driving in a foreign city is a service. Providing your customer base with convenience items such as the fuel option, a navigation unit or ski rack is a service.

Take Action
Design an effective, fair and motivational incentive plan.

Has your team received a base wage increase in 2008? If the answer is no, don’t lose sleep, many Americans have not. Providing your frontline and management team a lucrative incentive plan based on incremental sales will put their earning potential in their hands. From a financial perspective, you can sleep well at night knowing that the plan would be funded with “found revenues.”

Service-based sales cultures are not created overnight. They are cultivated by having management commit to developing the right environment for sales, finding the right fit of team members and engaging the entire team with the right motivation and expectation.

Implementing a customer-centered sales process for the rental will help your front line stay positive and in control. Developing your frontline sales team’s positive attitude, product knowledge of the services and ability to present the sales process requires a commitment to training.

After the correct incentives are installed, high level training is provided and expectations are set, management support should follow. Management support requires a presence at the counters, recognition from senior leadership and an ability to remove obstacles for the frontline sales team.

Create Urgency With Customer Service
The customer impression begins the moment she is transported to the rental location.

Developing an enhanced urgency around the customer experience and being relationship focused with your customer base is all within your control as an operator. A recent retail consumer study found that more than 70 percent of respondents had three major items at the top of the list during their experience: a knowledgeable and caring staff, low prices and easy-to-find product information.

It is critical the entire team understands that the customers’ rental experience is not confined to the time between customers handing your frontline associate their driver’s license and the hand-off of the keys. Stress that the impression begins the moment customers are transported to the location after their arriving flight and ends with the final step off the bus returning to their departing flights.

The counter greeting, the cleanliness of the facility, the rental process, the key delivery, the ability to leave the lot in a timely and safe fashion, the support that may be needed while the rental is out and finally the return process are all key pieces to whether someone has a good impression or not.

Creating this type of urgency around the customer’s impression is all within control of the operation and frontline sales team.

Take Action
Show your team the true cost of a customer complaint.

Does your company charge back an admin fee or service charge when a complaint escalates? Does your accounting department track credits or customer service fees? If so, make the numbers clear to your entire team. Segment the costs by area of operation. Share the impact of negative word of mouth and the rapid pace of customer opinion. After determining the costs behind customer service issues, develop a ratio of complaints to transactions to measure your progress.

After the business case is made, train your team on how to keep complaints at a local level. Incorporate customer-focused dialogues into the training that involve role playing relevant customer service situations. The most effective customer service training programs end with very clear, empowering guidelines of the latitude team members have to have to make certain the customer leaves satisfied.

Finally, after the case is made, the team is trained and you have their buy-in, it is critical that senior management has a presence with the frontline team. Urgency spreads once team members see managers doing the little things for customers or supporting the frontline to enhance customer experience.

Assess Your Claims Recovery Process
Does your frontline and return team know the true cost of a $500 unallocated claim?

Your ability to protect your assets and recover what is entitled to you as an operator has always been important. However, now more than ever, having a well-balanced claims strategy is critical.

CONTINUED:  Car Rental Operations: Five Areas You Can Improve on Now
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  1. Cy Keogh [ November 5, 2015 @ 08:12AM ]

    Hats off to Ken and the worldwide web!
    I have a lecture to give in a college in the Middle East and discovered that a good proportion of the audience work for a car leasing company. I was looking for some topical ideas to improve the relevance of my class - it might be 6 years old but it is still as relevant today as it was then.

  2. simon nigeria [ August 10, 2016 @ 07:08AM ]

    thanks for the knowledge

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