Targeting new customers should be part of a rental company’s marketing campaign, but it’s also important to focus on existing customers.
Why? A number of reasons: Market research has shown that repeat customers spend more and are less price sensitive, they’re your best brand advocates, and your cost to market to them is substantially less than to new customers.
In fact, it costs five times as much to attract a new customer than to keep an existing one, according to business consultants Lee Resources Inc. “It’s hard to get a new client, so make sure you keep your previous clients loyal to you,” says Doris Morningstar, senior media consultant at Hibu, an online marketing agency.
Nonetheless, many companies are still focused more on acquiring new customers rather than marketing to existing ones. Then how can a rental company better engage with its existing customer base?
Cultivate Your Influencers
Ric Militi, CEO of InnoVision Marketing, recommends maintaining relationships with groups that can send customers.
“Every rental company has its regular influencers or groups that repeatedly send customers,” he says. “Influencers can come in the form of insurance companies or auto body shops.”
Additionally, there is a difference between marketing to travelers and local business customers. The issue with travelers is frequency and cost. If someone comes to Los Angeles for vacation, he or she might not come back to visit again, according to Militi.
“Focus on finding a way to get to the key influencers that drive customer decisions — including digital advertising, traditional advertising, travel agents, or referrals,” says Militi. “Find these influencers before travelers make their rental car decisions.”
When it comes to local customers, Militi suggests maintaining relationships with local businesses. For example, a rental company could gain regular customers when the business needs rentals for executives in town.
We talked to rental car operators to find out how they reach out to their existing customer base — increasing the probability they will come back to rent again.
Drive Service Over Price
A Zendesk study found that consumers rank quality (88%) and customer service (72%) as the top two elements to remain loyal to a brand, followed by price and convenience.
Morningstar encourages rental agents to recognize repeat customers over the phone and at the counter. After asking if customers have rented with the company before, Morningstar recommends acknowledging their loyalty to the company and thanking them for their business.
Jon Torgerson’s goal is to make it as simple as possible for his returning customers.
“We used to fax the rental agreement and leave the vehicle for the customer to pick up,” says Torgerson, general manager of Rent A Wreck in Black Hills, S.D. “Now we use DocuSign so they can sign the rental agreement over email.”
Much of Torgerson’s rentals are repeat business, including visitors to Mt. Rushmore and the Black Hills, as well as Sturgis Motorcycle Rally attendees.
To Militi’s point on influencers: “We have various church groups and private religious schools that send out people to do work on the Indian reservation every year,” Torgerson says. “We have a children’s museum that rents vans to run a three-week archeological program for families and teachers every summer.”
Torgerson adds another level of service by delivering the vehicles. “We can leave the vehicles at the airport or take them to the customer’s hotel or campground,” he says. “Customers don’t mind paying for the service.”
Expediting the rental experience improves overall satisfaction, which is borne out in J.D. Power & Associates’ North American Rental Car Satisfaction Studies. According to the annual survey, implementing an express/counter bypass service, automated check-in kiosk machine, or a dedicated member program counter can drive high satisfaction ratings.
However, the greater amount of human interaction also leads to greater loyalty and satisfaction, according to Rick Garlick, J.D. Power’s global travel and hospitality practice lead.
The idea is to create meaningful interactions without slowing people down, says Garlick, such as finding ways to provide assistance without intruding.
For vehicles featuring newer technology, it’s helpful for customers to understand how to use them. “Every new technological feature also creates a potential point of dissatisfaction if the customer can’t figure out how to use it,” says Garlick.
When Leslie Saunders recently picked up her rental car in Philadelphia, she didn’t receive any instructions on the operation of the vehicle.
“The rental car was a luxury German vehicle, but I drive a vehicle with a completely different technology system,” says Saunders, CEO and founder of Leslie Saunders Insurance Agency Inc. “I couldn’t synchronize my phone or use the car navigation. The vehicle had great features, but with no one to explain the features to me quickly, I would have preferred a simple Ford Focus with my phone synched in 10 seconds.”
To help customers learn more about a vehicle’s technology features, Saunders thinks it will be standard to hire some rovers, like the Genius Bar at the Apple store, to improve the renter’s experience.
Keep the Conversation Going
Torgerson refers to his marketing as old-fashioned. He starts calling his regular group customers at least six months early, especially if they need a large number of 15-passenger vans or full-size SUVs.
“Since I know the usual time frame of the group’s visit, I’ll call to make sure that I can reserve the vehicles ahead of time for them,” he says. “It allows me to know what vehicles I need before summertime hits.”
Even after the customer returns the car, Nick Mariano continues the conversation by educating customers about his company’s other rental offerings.
“Because a majority of our business is replacement rentals, either warranty or insurance, most of our existing customers come from dealerships, body shops, and insurance companies,” says Mariano, owner of the Priceless Car Rental franchise in Utica, N.Y. “With each replacement customer, we educate them on everything we do in hopes that they will use Priceless for all their rental needs.”
For example, Priceless will tell all of its replacement customers about its variety of vehicles, including the specialty ones (12-passenger minivans and seven- and eight-passenger all-wheel-drive SUVs).
To help customers remember the Priceless name, Mariano and his staff give out personalized pens, magnets, and small trash bags to customers once they return the rental vehicle. For birthdays, the company will send out birthday email messages.
This counter interaction is also a great time to sell ancillary products to enhance an existing customer’s experience. Ken Stellon, executive vice president and partner at Frontline Performance Group, recommends offering products like a travel tablet or wireless product and promoting special discounts for booking the next rental ahead of time.
“At the end of the rental or during check-in, sell repeat customers the opportunity to pre-buy $100 rental car credits for $70,” says Stellon. “Many business travelers would do this and use the credits for other personal trips. Another idea is pre-selling 40 rental days via a mobile channel at the cost of 35 days.”
A Zendesk study asked consumers about whether a loyalty program would affect their decision to return to that brand. Over 50% of respondents would consider increasing the amount of business they would do with the company for loyalty rewards points.
Mex Rent A Car, with corporate locations serving Mexico and affiliate locations in Latin America and Europe, is looking to develop a loyalty program for its customers. “We want an easy-to-use program that doesn’t take too many points to redeem benefits,” says Jordi Rivero, Mex’s chief product officer.
In addition to free rentals, Rivero says that Mex would offer additional incentives, including free vehicle upgrade, free upgrade on insurance, ability to share the benefit with someone else, and free child seat rental for families.
Midway Car Rental is planning to expand its VIP program, primarily at Los Angeles International Airport (LAX).
“We’ve had this system for years for corporate clients, but we’re marketing it differently today,” says Ryan Kerzner, Midway Car Rental’s managing director of sales. “The new program is for returning corporate and retail customers. Members will have their own booking access online.”
Midway’s program expedites the car rental process with chauffeured service at the airport.
VIP members get picked up at the airport’s baggage claim area. Customers are taken to a limousine in the airport parking garage that drives them to Midway’s rental location. Once arriving at the office, VIP customers sign the rental contract on the iPad and their rental vehicle is waiting for them.
When returning the rental vehicle, Midway will take VIP customers back to the airport in the same car that they were renting, according to Kerzner. This way, the driver will drop them off and they don’t need to move their luggage.
“As a VIP client, you don’t have to go into our office and wait in line for your rental vehicle,” says Kerzner. “But we do have a special office we can walk these customers into if needed. We can’t do a rental transaction on airport property; LAX forbids it.”
To incentivize its existing customers to come back and rent again, JUCY offers a 15% discount for returning customers.
Use Data to Personalize Communication
For Nima Mobasser, using existing customer data is key for maintaining communication with his company’s existing customers.
Mobasser suggests gathering and keeping renter data such as country, state, age/gender, date/season of rental, number of travelers, and destinations/preferences so that a rental company can automate and customize discounts and email communication. “This makes it more personal and relevant, thus achieving better retention,” says Mobasser, vice president of State Van Rental.
Rent Centric, a provider of car rental management systems, has integrated Salesforce into its software platform. For its car rental customers, Salesforce allows them to create customizable emails and choose how often to send them out and to which groups, according to Alex Aryafar, Rent Centric’s chief technology officer.
Email marketing is a way to engage potential customers. “By creating personalized emails, you help keep your brand on their minds,” says Aryafar.
If someone calls a rental company for a quote on a vehicle, the customer relation management system will take down his or her name and contact information. Salesforce will put it into the leads area. A salesperson can then group these leads into two categories: likely to rent and unlikely to rent.
“The Salesforce system will automatically email the ‘likely to rent’ group with follow-up emails featuring personalized specials,” says Aryafar. “A rental company could choose to email the ‘unlikely to rent’ group once a year with a special while emailing the ‘likely to rent’ group more often.”
By Salesforce grouping these potential customers into different categories, a salesperson doesn’t need to follow up with each customer (or potential lead) one at a time.
If one of these people rent a vehicle, Rent Centric can send the rental agreement and how much they paid into the Salesforce database. By having this information, a rental company can create marketing material based customers’ preferences and how often they rented a vehicle, according to Aryafar.