The Benefits of Letting Some Car Rental Charges Slide

Small businesses cannot be successful unless they watch every dollar and every penny. In the auto rental business, like many others, metrics are the guiding factors that we are judged by. Often, success or failure is determined by a very small window.

That said, no small business should forget this adage: “Give a little, get a lot.”

One of my territory managers would send a spreadsheet around the 10th of the month highlighting in red the numbers of the locations that were not performing up to the desired metrics. Often, my location was highlighted in red, yet at the end of almost every month, I exceeded the expectations with no mention.

Success in business is dependent on one principle. The money coming in the front door needs to be more than the money going out the back door. It’s as simple as that. One of the things I was questioned on as I was building my business was why I was comp’ing certain charges or removing late fees.

My actions were seen as sending money out the back door, when in fact, I was marketing, and building relationships. I only comp anything on a rental if I believe it will bring me more business — and if it will, it is not a loss on a rental, but an investment in marketing.

Let me give you some examples:

A customer called saying she was an hour away. Her rental is due back in 30 minutes. The corporate policy is “Late is late.” A couple of questions to her, or any customer in this situation: Are you coming straight here? Do you understand that the policy is that “Late is late?” If the customer answers correctly, my response is “Make sure you fill the car with gas. Bring in the mileage and I’ll check you in at no additional charge.”

I don’t mention delayed check-in or how I can do it. Here’s how I see it: The person acted responsibly. She called. She knew she was late but got caught in a bind. Whatever the amount of the late fee that I waived, I got excellent return on my investment in marketing.

I know there are some that will challenge this and that’s OK. My business grows 20% a year and if yours grows more, I’d love to buy you lunch and learn what I can do better.

Here's another situation that we, at a relatively small location, find ourselves in from time to time: A customer reserves a midsize car, but we don’t have one on the lot. I never tell them that. I put them in the larger car as my treat to them — I was going to have to do it anyway.

Sure, I could try to upsell them, but if they resist, they’ll see right through what I’m doing when they get in the full size. Suppose I bluffed them into a $10-$15 a day upsell? That would be that. I would get my commission on the upsell, but the customer would feel nothing; they go with what they paid for. The approach we use makes them feel special and it’s more likely they will rent from us again, but more importantly they’ll refer others.

Lastly, we have the upset customer: We all know that customers often bring their troubles on themselves and that they can be unreasonable, but I learned long ago that the quickest, easiest way to tone down an upset customer is to take control. Probably they were told the details of the rental at check out, but now they are certain that nobody said anything about their situation specifically. Offering a fair credit almost always ends the discussion on a happy note.

You see, the customer feels that he or she was heard. They got enough compensation to satisfy them and they go tell their friends. Sure, I could stand my ground, argue my point, but why? Again, it’s marketing to me, not giving money away.

Take a look at the dollars you spend on marketing to get new customers and compare that to a few appropriate compensations to keep existing customers and I think you’ll agree that it’s money well spent.

Bill Packard is an Avis Budget Agency Operator with a long history of entrepreneurship focused on customer service. Packard also coaches small businesses on the significant value of increasing their retention rate. He can be reached at can be reached at bpackardme@gmail.com.