Car Rental Q&A: Incentive'izing Your Incentive Plan and Best Indicators that Business is Good

Q: What are some non-traditional signs or indicators that business is beginning to pick up?

K. Michaels - Independent Rent a Car, Central Florida

A: It is safe to say that everyone has a different opinion about the current economic condition - where we are or when it will end. Keeping your pulse on the following items will add a different perspective to your version of a recovery:

  • Look for changes in hotel occupancy and non-seasonal rate increases. Unlike car rental operators, hotel operators cannot cut capacity in their room availability. Occupancy in the hotel industry is a consistent indicator.
  • Truck rentals and equipment rentals begin to increase.
  • Your top performers and best employees begin to have other career options and offers. When things turn around they will be the first to be approached by a customer or competitor for a job.
  • Walk-ups and reservations with less advance notice will increase.
  • Independent car rental operators will increase their fleet.
  • Your competitors may begin to offer services or customer experience items that may have been recently cut, such as adding customer service greeters and frontline staff, new and more unique fleet choices, new location signs and other general location improvements.
  • Your local politicians will change their message from blaming each other for the downturn to taking individual credit for the turnaround.

Regardless of how you feel about the current economic climate, the more sources of information you can obtain will allow you to form your own opinion.

Q: How do we change our incentive plan to prevent sales associates from leaving the counter or engaging in customer profiling?

Station Manager - Airport rental operator, Western Canada

A: The good news is that you do not have to do anything to your incentive plan. Don't change it. It is not the role of the incentive plan to hold sales associates accountable; it is the role of the manager. The bad news is that many managers do a very poor job of holding associates accountable for these poor and unprofessional sales practices.

Following these techniques will greatly reduce these troubling behaviors:

  • When the cat is away the mice will play: It is critical that your management team establishes its presence on the counter during peak rental hours. Managers should ensure that rentals are processed equally by every associate.
  • Set fair and obtainable stretch targets: If incentive targets are set unrealistically it will create an unfair expectation for your team and their internal motivators will get the best of them. If no one in the location is receiving a payout, there is a problem.
  • Go inside the numbers: Removing subjectivity and hearsay from the scenario will greatly enhance the manager's ability to hold the staff accountable. Review individual associate length of rents, average rentals by hour worked and incentive earning per agreement. Calibrate all these trends versus the location's team average.
  • Play the devil's advocate: Ask your associates if they have ever been pre-judged or treated differently when they made a purchasing decision somewhere else.

Applying these techniques and having a relationship-focused approach with your frontline team will improve your team's rental productivity and enhance your customer's experience.

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