Q: What are the basics of a good sales associate incentive plan?

John B. - Location Performance Manager, S. Florida Car Rental

A: Having an incentive plan in place that drives service-based sales performance is a critical element of your sales culture. Here are some critical elements to put in place:

• Base the incentive on incremental sales yield and customer service (incremental sales revenue divided by total rental days = incremental sales yield).

• Establish a target or tier system that ensures your firm is using “found”/incremental revenue to pay for associate incentives.

• Ensure that associates can earn a bonus that will help them envision a more comfortable lifestyle. Effective incentive plans should help associates add an additional 25-40% to their base wage.

• Review the incentive monthly with your team, and adjust the plan only two to three times per year based on location volume and seasonal opportunity.

• Implement every possible product into your sales incentive.

• Double check the competition on product, service and price.

• Pay generously on walk-ups and in-bound phone reservations. Effective incentive plans have a payout rate of 3-5% of time and mileage revenue.

After the program is rolled out to your field it is critical that your leadership team consistently monitors the effectiveness of the plan. Keep track of your total payout versus gross revenue, your service ratios and associate motivation.

Q: We want to obtain more business from our local dealerships. How do we become more influential with service managers and general managers?

Domenic L. - Area Manager, Southern California

A: Establishing a presence within your local market is extremely important. It cannot be done without the dealership/service drive customer base.

Here are some ways to more effectively engage decision makers:

• When in doubt, start at the top. General managers and service managers are extremely important to growing your referral base, but involving the dealer principal will secure even greater commitment. All too often local market sales managers and branch managers do not communicate to the ownership group. Dealer principals are more accessible than sales representatives may think and are open to new ways of growing their business.

• Speak their language. Determine if their pain is CSI, profit, new car sales or administrative efficiency. Tailor your message to their focus area and deliver on what they want.

• Become involved with charities and community groups they support. After establishing your presence within these groups, secure references from community leaders or businesses involved within the group. If the dealership is locally owned, your participation within these local groups will be noticed.

• To get their customers, become a customer. Ensure your operation is also a customer of their operation. If you are trying to secure the dealership’s commitment remind them that you are a service and parts customer of the dealership.

What are some new incremental products I can create to improve my margins and enhance our customer’s experience?

M.J. Paul - Auto Leasing Agent, Chicago

A: Before an operator begins the process of adding new coverage products or creating any services that may be offered at the end of the rental, it is critical to evaluate three embedded sales opportunities that many look past. 

• In-Bound Phone Opportunities: Ensure team members receive a fair incentive and that their location is measured on reservation conversion. Providing your team with a service-based sales message will be key to a strong opening phone greeting.

• Converting More Walk-Ups: Establishing a “no one walks away without a car” mindset is critical. Stress to your team the financial impact of securing one more walk-up per shift, per day. Utilizing a service-based sales process within the first 30 seconds of customer experience is crucial.

• Average Price of Upgrade: Although frontline teams become complacent with upgrades due to lack of fleet or high utilization, the truth is that one out of 10 customers want a nicer vehicle. They ask for it! Securing a higher price per upgrade during these opportunities will enhance your team’s sales yield and create a better sense of value for your associates.

Once these three opportunities are addressed and the location has a strong service-based sales program, the management team can then turn its attention to creating new products.

What's Your Question?

Email your car rental operation-related questions to Auto Rental News care of Chris Brown at chris.brown@bobit.com.

Consultants from the Frontline Performance Group will come up with concise, insightful answers to help you better run your car rental operation. Feel free to contact them directly at questions@frontlinepg.com.

More articles can be read here from ARN's January/February magazine issue.