Why Customers Don’t Return to Your Rental Counter

A lot of my energy goes to keeping customers. Why? Depending on which study you believe, a new customer can cost anywhere from five to 25 times more to acquire than the cost of keeping an existing customer. That alone should make customer retention a top priority.

In order to keep customers, we need to know why they don’t come back. Several surveys have been done with basically the same results, and the data is interesting:

• One percent die: Obviously we have no control over this one. Yet while these customers are no longer with us, if we delivered a pleasurable experience, their families may choose to rent from us in the future.
• Three percent move: The rental car business is unique on this one, because while one location will lose the business, those affiliated with a national rental brand will get the business when the customer moves into a new area.  
• Five percent seek alternative solutions: A loyal customer who rented almost weekly for business travel went ahead and purchased a car and therefore doesn’t need to rent from me any longer. We treated him right, and he is still a raving fan. I suspect he told his family and friends about our service.
• Nine percent go to the competition: You thought this one would be higher, didn’t you? In an industry that is constantly rate shopping, it’s clear that we’re afraid of losing customers. But if we lose a portion of that 9% because they decided to go elsewhere for a better rate, it’s not the end of the world. If they’re basing their decision primarily on rate, they won’t be loyal, long-term customers anyway.
• Fourteen percent are dissatisfied with the product or service: Now we’re getting to the good stuff. While there is little, if anything, you can do to mitigate the first three, you can make a positive impact on the next two groups.  

For those not satisfied with your service, simply presenting a clean vehicle after completing and efficient and friendly rental transaction will go a long way to winning back this 14%.

Sixty-eight percent feel they were not treated appropriately: This high percentage should make you happy. Why? Of all the things we have to offer our customers, treating them appropriately is always within your power.

Car rental is all about the experience. Two areas make this clear: One, when customers return vehicles and have a problem, do you do all you can to resolve the situation right there at the counter? If you did, you have likely made a loyal customer.

The other is at checkout: Does your counter staff talk to other representatives, take phone calls while waiting on a customer, or doing anything that takes your attention away from that customer? We’ve all faced this lack of respect on the other side of the counter, so it’s easy to see why it’s a major factor in losing customers.

Let’s close by doing the math. If your customers are satisfied with the products and services you provide and feel that they are treated appropriately, 84% of them will never go anywhere else. That should get your attention. There may be very little we can do to retain the other 16%, so let’s focus on the 84%.

We can easily get ourselves into a position where we are spending tremendous amounts of marketing money because we’re turning over almost all our customers and have to lure new ones in to replace them, only to lose those new ones and keep the churn going.

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.