The Customer Isn’t Always Right

Car rental in Alaska is feast or famine — during the summer high season, fleets walk the tightrope of near 100% utilization. During the winter, they de-fleet and “shelter in place” until the thaw.

In this context, companies such as Alaska Auto Rental in Fairbanks can require prepaid guaranteed reservations. “We have a strict policy,” acknowledges Peter Chapman, general manager.

(The company’s policy: Guaranteed reservations require prepayment at the time the reservation is placed and are fully refundable until three days prior to pickup. Cancellations made with less than three days advance notice are non-refundable.)

“We are careful to not overbook because we provide a reservation guarantee that we stand behind,” Chapman says. “Because we don't overbook, it is a business necessity to avoid having a 20% to 30% no-show factor. Our prepaid reservation model effectively mitigates the no-show issue. You can count all of our no-shows in a year on one hand.”

Chapman says he has gone out and bought a replacement vehicle on a moment’s notice when an unexpected accident happened that would otherwise have left the next customer stranded. “That’s what it takes to provide the level of service we are committed to,” he says.

So when a customer with a reservation calls to cancel it less than 24 hours from pickup and hammers the agent for a refund, what do you do? When this happened recently, Chapman’s staff restated the guaranteed reservation policy to the customer and offered the opportunity to talk to Chapman, but they held firm on not providing a refund.

Alaska Auto Rental will waive the policy for “legitimate circumstances beyond the renter’s control,” which even includes flight delays or cancellations. The customer admitted he was aware of the policy, but his excuse was “He didn’t like the weather,” Chapman says.

When Chapman got involved, his goal was threefold: Listen to the customer’s concerns, re-verify that he was aware of the guaranteed reservation policy, and review phone logs and recorded audio to make sure the staff followed protocol, which they did.

“If the customer was not properly informed of our policies, we’d take responsibility,” he says. “But because he acknowledged and accepted our policies prior to placing his reservation, the consequence for his decision to change his plans was fully his to bear. He simply didn’t like the fact that it was non-refundable and he was trying to negotiate with them.”

Chapman held his ground. And then, “Nevill S.” from Edmonton, Canada made good on his threat of a negative review by dropping this bomb on Yelp:

“I would strongly avoid this car rental agency. They lack good spirit and the fairness of doing business. They have bad policies which selfishly cover their interests, and leave the customers totally exposed to factors beyond anyone's control. … Their Fairbanks manager Peter, is very cutthroat, hardheaded, and lacks empathy.” It goes on. He posted a similar Google review.

On Yelp, Alaska Auto Rental had nine reviews prior to the negative one and a five-star rating. With this 10th review, the rating dropped to 4.5 stars.

Chapman responded. His first reaction, fortunately, wasn’t the final response. “The proper method of responding to a review from my experience is to step back, take a breath, and not take it personally,” he says. “I try to get some external input from someone who is familiar with us but not tied to the specific situation.”  

In Chapman’s response to the bad review (viewable on both the Yelp and Google pages), he reiterated the company’s policy in a professional manner. He wrote that he reviewed phone records to ascertain that the staff did follow protocol. He addressed the customer’s blatant inaccuracies, including the claim that the customer did not receive an emailed reservation confirmation, and that his email follow-ups went answered — the customer not only didn’t email the company, but he never provided an email address when he made the reservation, records show.  

“Having good online reviews is very important to us, but we’re not going to let somebody use the threat of leaving a negative review to coerce us to do what they want,” Chapman says. “I’m willing to ‘fire a customer’ over that.”

Nonetheless, the review stays and the Yelp score drops, though viewers are hopefully savvy enough to see through these blatant tactics. Subsequent to this exchange, the company received a new five-star review, which mentioned the prepayment policy in a positive way. Chapman responded, which offered a way to clarify the policy for potential customers in a more positive light.

In a corporate structure, sticking up for yourself or your company often gets lost in the fact that your branch’s CSI (Customer Service Index) takes a hit regardless if the review is unfair. If CSI is tied to performance, the tendency might be to cave into the unreasonable customer’s demands.

Alaska Auto Rental isn’t beholden to this Catch-22. It isn’t the cheapest car rental company in Fairbanks; it wouldn’t survive as such. The company has prevailed through exceptional customer service, Chapman says, which delivers word-of-mouth marketing. Without a large advertising budget, online reviews matter.

In this case, Chapman felt the greater issue was the integrity of the company rather than kowtowing to a customer with an agenda to help maintain a positive star rating. He’s right.

Originally posted on Business Fleet