ICRS Experience Day 5: The Hard Part Is Over

Our first-ever virtual conference for the car rental industry — ICRS Experience — is a wrap. It’s been an exhausting yet exhilarating week, ironic because we didn’t have to squeeze into an airline seat, wait at a hotel check in-desk, and queue up for our morning latte at the coffee kiosk before entering the hotel convention area in Vegas. Instead, the whole convened on our desktops. No, this won’t be the norm — we’re all excited to get back together in person, and we will, though we just can’t put a firm date on that at this time.

The exhilaration comes from the information, conversations, idea sharing, and prognostications presented throughout the week. (And exhaustion is also part of virtual events, as you can imagine.) Friday, our last day of the conference, was no exception.

Ken Stellon of Frontline Performance Group led the day off with “Managing the Next Stage of Travel Recovery: Inspire Productivity, Engage New Talent.”

Stellon opened with a viewpoint of the future that rings true: 2020 was a year of massive uncertainty, and the fear of the unknown can cripple an individual or a business. The outlook isn’t particularly pretty; many forecasts show that the travel sector won’t fully rebound until 2024. Nonetheless, “I believe the hard part is over,” Stellon said. Why? “We know what the (immediate) future looks like, and we can prepare.”

Stellon referenced that car rental companies went through their de-fleeting processes and have realized their workforce reductions. Customers are adjusting to the new norm too. “Society is getting used to this plexiglass world,” he said.

For smaller, independent brands, customer service was always a differentiator, though that’s true now more than ever. In some advice for frontline staff, Stellon said that customers can pick up on body language and positive energy through a face mask. Because it’s hard to hear through a mask and plexiglass, he said that the act of pausing during a conversation can be your new volume button. Pausing forces people to pay attention.

Yes, customers want contactless experiences, from hotels and car rentals to the migration of store shopping to e-commerce. But the customers that do make it to your counter are the motivated ones for a variety of reasons. And your frontline staff still has an opportunity to offer products and services.

Renters don’t want to stop at a gas station right now, not only because of COVID-19 fears, but because a frictionless experience means much more to them today. Could your staff be more motivated to offer the time saver of the prepaid fuel option?  

Many airport agencies have migrated customer interactions from the in-terminal counters out to the booth in the parking structure. When the customer arrives to see a new choice of vehicles only a few yards away, why not make the upgrade offer?

Car rental companies have already enhanced their safety and sanitation protocols, but have you communicated those well enough to customers? If you close out the contract by reinforcing your safety protocols, your CSI will go up.

For those from the industry out of work right now — or for the managers looking to hire — Stellon communicated that working in the car rental creates an experience set relevant to so many different types of business, including retail, fleet, and logistics management, financial planning, and people leadership. These are universal qualifications to leverage.

As we’re still in the middle of the pandemic, it’s hard to imagine building your “I was there story,” the way older relatives talk about events that changed the world. But think about it now. “You’re in a unique time in your career,” Stellon said.

The second seminar, “Exploiting Your Local Market,” gathered three seasoned operators, Solomon Cramer of Budget Harrisburg, Ian Kusinitz of Empire Rent A Car, and Mike Kulp of Kulp Car Rentals, along with Gary Tucker, CEO of Zubie, a telematics provider.

The operators explained their present conditions and how they’ve adjusted during the pandemic.

Kulp’s business, mostly made up of insurance replacement rentals, was down about 60% in April and May, but has slowly recovered to where the busines is down to about 15% in September and October. Kulp has been dealing with the trend of body shop consolidation over the last 10 years. “The one-man independent body shop is disappearing,” he said.  

Kulp was able to pivot to dealership rentals with warranty and recall work. Outside sales has become much more important, Kulp said, adding that two of his staffers are tasked with calling 20 body shops and dealers a day to solicit new business.

Cramer’s business today is primarily long-term rentals. “I always say our business is much more reliable,” he said, adding that the business took a 20% to 25% revenue hit in the depths of the pandemic, but has come back to be down only about 10% today. “The greatest silver lining that we've all had is an extremely hot used car market,” he said. “We've been aggressively turning inventory, selling anything that's not pretty much nailed down.”

Cramer said he didn’t pivot to new business, instead he concentrated on working with his existing customers. About 30% of his customers had problems making their payments. “A lot of them we gave 50% discounts for a month or two and said hey, let's work through this together,” he said.

Cramer figured that keeping customers was more important than inflexibility on payments and having cars returned to sit on the lot.

Kusinitz’s business was down commensurately. He implemented a contactless, curbside delivery service, which was done “in an old-school fashion.”

That meant emailing a contract and taking payment remotely, leaving keys in the car in a secure parking garage, and having the employee and renter take photos. He’s looking to upgrade the process with a new system and software.

Kusinitz has been renting vans to independent Amazon contractors and package delivery companies, and there is high demand. But he cautions that drivers put on a lot of miles, subjecting the vans to repair issues, and the time dealing with these types of rentals is outsized compared to overall profits.

“Those maintenance costs are real,” he said. “And you have to make sure you're charging the right price for the product, knowing the amount of use that (the vans are) going to get,”

While all three of these seasoned operators de-fleeted heavily into the hot used car market, they believe they’ll be just fine on allocation for the next few quarters.

Finally, Alex Fraser of Pivet, a division of Cox Automotive Mobility, presented “Innovations to Drive Utilization and Rental Customer Engagement.”

Fraser spoke about how mobile maintenance is addressing the critical need to drive uptime and how the safety systems in today’s vehicles need calibration. He finished with a fitting cap to ICRS Experience, which presented a window to the future for some operators in car rental.

No one in the retail space is better poised to succeed more than rental.

He referenced the many startups and technology companies that have platforms to provide cars to consumers. “They have cool ideas, but almost all of their models are built on someone else owning their vehicles,” he said. “They don’t want to own them.”

Car rental companies are the asset owners, and the financial markets have accepted them as the owners, he said. In the context of a subscription service — the hot new idea — the asset owners are coveted and can profit from the relationship.

“You guys live this business already,” he said. “You’re in a very real position to compete in the retail car business with subscriptions. Nobody is better positioned than that.”

We’ll see you in person, someday soon. Stay tuned!