Do you remember the days when your team only had to focus on three or four different customer segments? In today’s competitive marketplace, car rental firms go to great lengths to discover, court and win new customer segments. As a result, the “opaque” customer segment will have the greatest impact on the landscape of the industry and ultimately the renter’s impression of the value of your product.

An opaque rental is defined as a reservation that allows online customers the opportunity to bid the price they want to pay for a specific travel-related product or service and location without knowing the brand. The brand is revealed after the customer makes the online purchase. For airlines, hotels and car rental firms, this customer segment allows operators an opportunity to increase their market share and utilization.

Understanding the opaque rental’s impact on the industry will better prepare your team for additional service-based sales opportunities and will improve the customer’s overall rental experience.
Although there are many discounted travel websites out there, the most popular opaque travel websites are Priceline.com and Hotwire.com.

Changing Landscape and Industry Impact
Today, your customers have more options, are cost-driven, better informed and equipped to make fast buying decisions and are becoming less brand loyal. These characteristics are magnified tenfold for the average opaque customer. Advances in smartphone and tablet technologies coupled with the growing influence of social media will only strengthen the opaque customer’s position and draw more cost-driven customers toward the opaque booking channel.

The following statistics highlight the impact of the opaque trend on the car rental industry:

● According to Quantcast, Priceline.com and Hotwire.com had 86,000,000 visitors in 2010.

● PhoCusWright projects that online travel agency websites generate 39 percent of online travel bookings.

● In an internal study, Travelocity states that 71 percent of travelers consider travel supplier cost and value the most important influencer of their future travel.

● Forrester Research estimates that opaque booking channels have a 90-95 percent customer retention rate.

Additional research shows that during fiscal year 2010, Priceline.com brokered more than 15 million rental days to the global car and truck rental industry. Since 2008, Priceline.com is up 97 percent on booked car rental days. Compared to hotels, airlines and cruise lines, opaque car rental bookings have the highest growth trend. Assuming a conservative 1.2 percent annual growth rate, the global opaque car rental market space will eclipse $1.2 billion in annual rental revenue by 2015. 

Operational Management Support
Understanding the opaque customer segment and its impact will allow your management team to believe in its importance. The following management support actions have to be in place if the opaque customer is going to be well received by your frontline associates:

Management Counter Presence – Managers have to be at the counters when opaque volume comes to the location. One of the benefits of the opaque channel is that it can be turned on, off and on like a faucet. The operator knows when volume will spike; it is critical that support managers are positioned at the counter to assist with high-volume swings. Having managers interact with customers waiting in line or establishing separate kiosks for this wave of business will take a tremendous amount of pressure off your frontline associates and customers.

Fair Incentives – Establish a fair incentive plan that sets a realistic selling opportunity to opaque customers. Adjusting incentive tiers for your frontline associates to accommodate an influx in this new business will lead to enhanced sales and a better customer experience. Establishing fair incentives will allow the management team to hold frontline associates accountable for complaints and service. Establishing a market share bonus for the entire team will provide additional motivation and allow the entire team to see the big picture.[PAGEBREAK]

Advanced Service-based Sales Program & Training – Just as the role of the frontline associate in the car rental industry has changed, so has its customer base. Effective service-based sales techniques in traditional retail or with corporate customers are no longer as valuable with opaque customers. Implementing an advanced training program for your team is critical, such as communicating the makeup and worth of the customer segment and instilling the belief in the service-based sales opportunity. In the training, build your team’s confidence by focusing on the following items:

● Opaque customers are not “broke” or cheap.

● They are not evil.

● They’re appreciative of the rental and rate.

● They are willing to purchase additional products and services.

Providing your team with a detailed look of the opaque customer demographic with advanced sales and service techniques will provide your frontline team with new tools to engage this customer base. 

Customer Types
Sales management experts focus on customer typing to prepare their sales teams to drive higher sales and improve customer retention. The following four customer types are present within your opaque customer base.

The Controllers – These customers are comfortable with the opaque rental process because they can control the time of booking; they like the ease of booking and understand established price points. They want and need speed of service and concise sales options. Centering associates’ qualifying questions based on previous opaque bookings will help the Controllers feel as if they are experts in the process. Use the Controllers’ names multiple times in the rental procedure and allow them to take control of the initial aspects of the upsell process. You can recognize the Controllers by their always-present smartphone or tablet. In many cases they will not have their itinerary or reservation number handy.

The Savers – These customers are motivated by the savings off-rack rate and impulsively desire to continue to save. They want and need validation and thrive on the feeling of exclusivity in potentially saving more on nicer vehicles. Centering the initial rapport of the rental on the Savers’ ability to get a great rate will open them up to additional upsell or coverage presentations. Communicating scarcity within your fleet during the upsell presentation will enhance their impulse buying. You can recognize the Savers by the fact that they will immediately say the rental was prepaid. In many cases they will share with the frontline team what the discounted rate was. They openly discuss their use of opaque booking channels for hotels and airfares as well.

The Minimalists – These customers are well-acquainted with the opaque process, the surrounding area of the rental location and traditional rate structure. They want and need efficiency during the rental process and appreciate a concise sales presentation. Asking additional qualifying questions pertaining to anything unique about the trip may prompt them to request more products like the coverage or GPS unit. Since the Minimalists are least appreciative of the specific brand, it is critical to mention other affiliated specials or promotions on your company’s website. You can recognize the Minimalists by their familiarity with the process and location. They understand that the very nature of the low-opaque prices will increase customer demand, which may create car waits or longer customer lines than normal. 

The Newcomers – These customers are trying opaque for the first time; they may be skeptical of the discounted rate and process. They want and need accuracy, reassurance and further information. Communicating that you have the reservation and return date within the first 20 seconds of the rental will put the Newcomers at ease. In many cases, the Newcomers will be so surprised at the low rate that they will have the itinerary available. Securing the itinerary within 20 seconds will demonstrate your appreciation of their preparation and removes any additional distractions. Reviewing the terms and conditions thoroughly and confirming the return time and date will assure the Newcomers they won’t have any problems upon return. It is critical your frontline associates also promote your pre-established website and discounted web promotions.

Calls to Action
Approaching the fourth quarter is a great time to reflect on how the year is shaping up and to begin setting an action plan or forecast for the coming year. Providing clarity to the unique characteristics of the opaque segment and establishing an action plan centered on management support at the counters with advanced service-based sales training for your frontline team will ensure your operation has the strongest results and highest levels of service. 

Ken Stellon is a managing partner for the Frontline Performance Group – A Khoury Group Company. Ken and his team have been contributing to Auto Rental News since 1993. For more information on the topic of opaque rentals and other advanced service-based selling techniques, attend the October Auto Rental News Profit Boost advanced webinar series. Ken can be reached at 630-788-2879 or via email at [email protected].

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