Vaggelis Vernadakis from Europeo Car Rentals in Crete, the largest of the Greek islands, talks in this web-exclusive about how customer retention has become increasingly important in the region’s down economy, and how finding those customers has shifted online.
What's your total fleet size?
Our fleet size is now 165 cars and every year the demand surpasses our fleet potential, therefore for the past five years we have been expanding our fleet size by almost 20%. Europeo Car Rental is a steady force in the market of car rental for the past 20 years. We operate in Crete (Greece) and deliver in all major cities, airports and hotels.
How many locations do you have and in what types of areas?
Our main office is located in Heraklion. We relocated after almost 19 years in the prefecture of Rethimnon. We decided to relocate at the “capital” of Crete, the biggest town all over the island. However, we continue to serve all our clients in the four prefectures of the island and all over Crete.
How did the business start?
The owner of the company was working in the tourism sector for years, and in the last few years before he started our company worked in the area of car rental. The idea of creating a company of his own was born during a business trip, where he saw the name “Europeo” on an Italian magazine and decided to create a startup car rental agency with that name.
What are your primary sources of rental customers?
The main source of our customers for years was the “chase” of tourists that were passers from our office. The last few years, a new era has begun and we have initiated constant online advertising, which is now the biggest source of our reservations.
Are you an affiliate of any kind?
No, we are totally independent. In fact, as we have a great number of reservations that our fleet cannot serve, we have one or two partners that we rent cars from in order to serve our clients.
Are you pursuing new sources of business/customers? What are they?
Yes, as an ambitious company that always tries to evolve, we are looking for any kind of partnership that can have a positive effect on our company’s brand name. New customers are always a bet that we have set ourselves to win day by day and we are always looking for ways to attract them to our company.
How has the car rental market in Crete evolved in the past 10 years? 20 years?
Car rental in Crete is now in a transitional phase. The time that every car rental agency worked mainly through luring new customers “from the street,” which was the main source of reservations, is fading. Tour operators, the other big source of reservations, seem to lose a big part of the market as more and more companies seem to understand that the future for their companies is online marketing, where the advertisement of each company can surpass the borders of its country (or continent) and that’s why they are looking to expand their businesses toward that sector.
Describe your specific marketing efforts and what the payback has been so far.
We have begun a big online campaign in order to advertise our company. Mainly through social media and secondly with paid advertisement, we try to evolve and make a strong brand name on the market of car rental in Crete. So far the efforts are totally successful and the next steps are the creation of a blog, with its main topic to be car rental in Crete, and the creation of one or two websites for the Russian and the Dutch market.
How do you buy cars?
90% of our fleet come from new purchases and only a 10% from repurchases. Leasing is not a very profitable business with the current tax regime so we never tried it.
How do you sell your cars?
Most of the cars that we sell are going back to dealers and a few to individuals.
How long do you keep cars in fleet?
The maximum time that we can keep a car in our fleet due to Greek legislation is 6 years. However, on the 90% of the cases, we don’t keep any car above 5 years except in some cases in which the car is in perfect condition.[PAGEBREAK]
What are your biggest challenges with fleet?
The biggest challenge with our fleet is to make it grow as fast as possible. We already have more reservations than we can serve and we seem to need more cars. However, the steps are made without rush in order to ensure that we will have a steady profit from each year.
What are your popular rental vehicles?
The most popular vehicles are the small and economy ones. People seem to have understood the effects of the economic crisis and try to spend as small amount of money as possible.
What types of counter products are popular?
The most popular counter products are the baby seats and GPS. We provide the first one for free and the last for a small price.
Are there a lot of independent car rental companies in Crete? In Greece overall?
Yes, there are a lot of car rental companies in Crete and in Greece overall which makes competition hard. There are also multinational companies, which makes it even harder to compete. However, we have a steady number of repeat clients and a fast growth of new clients who we will always take good care of, so the future seems to be great for us.
How are you surviving the current economic climate? And what is that economic climate like currently for you in Crete?
The secret for each company that wants to survive during this financial crisis is simple: Take good care of your clients in any level. Keep your prices competitive, provide an excellent customer service, help your clients as soon as possible in case of an emergency and you will get a huge payback from them in a different way with each one of them. The attention to detail, the friendly attitude and the personal relationship with all our clients is what makes our company different from all the other car rental companies. If you combine all those characteristics, with quality cars at the most competitive prices of the market, you can understand why we are thriving as a business.
What are your biggest challenges right now in the business?
The biggest challenge for us is to achieve to grow without losing the face-to-face contact we have with our clients. Most of them, who come in several times a year, we know them and they know us by our names, and we believe that this personal relationship and care is the reason for our success. The challenge is to grow as a company and keep the same profile as our current clients know us.
What does the car rental market over the next five years in Crete and in Greece overall look like?
The main source of clients will be through the Internet. The growth in the market of mobile apps seems to be affecting every sector of business so more and more car rental companies will probably be looking to evolve in that sector, too, in order to serve their clients better and faster. As tourism is one of the main incomes of Greece, I think that some investments are going to be made in order to attract more tourists to our country and therefore the needs will be bigger, which means that companies like us may need to grow their fleet in order to fulfill their potential.
Any new laws or rules you must abide by?
The biggest problem for all businesses in Greece, no matter in what sector they are in, is the bureaucracy. We could not evade from that either and we are trying our best in order to surpass any obstacles put in front of us. There are plenty of rules that we have to abide by and many taxes to be paid. Business growth is not encouraged with the current laws but we have found a way to survive.
For example, we have to pay a tax of circulation, which is paid also by individuals but for a business of 100 cars the cost is around 20000€ which is a lot of money. The car rental associations are working toward the elimination of that tax or at least to be lowered.
Where do you think the biggest growth potential is in your business?
The biggest potential and what we are trying to expand day by day is the online community. As the majority of the people seem to be online, the best source for new clients has to be found there. So, we try to expand toward that sector.
What would you like to see change in the industry in Crete and Greece?
Bureaucracy is the first thing that needs to change in Greece and the second is the enforcement of taxes in order for more businesses to be encouraged to open or grow.
Are you part of any tour or rental-related organizations or associations?
We are part of the car rental union in Crete. And this year we have tried to create a network with local car rental companies from all over Europe, mainly, and secondly all over the world. We have already created a partnership with a local car rental company in Malaga (Spain) and we keep looking for new partners. The partnership works as an “exchange” of clients, which means that we advertise to our family/friends/clients that they are going to visit a specific place the company that we have a partnership with, and they do the same for us.
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