Three Ways Car Rental Operators Cannibalize Future Profitability – Rental Operations
Of all the complications COVID has inflicted over the past 18 months, the auto industry has been hit particularly hard. Supply issues have resulted in inventory shortages, as well as massive changes in the job market. Every operator faces the same new reality: uncertainty is here to stay. However, if you take a closer look, you’ll see an entirely new (and more profitable) model emerge. How to capitalize on the new normal? Start by avoiding these three common pitfalls.
Abuse of high mileage cars
Where does research show customers are unhappy because they have a high mileage car? Is it possible that they are dissatisfied because the car smells of smoke, has a dirty windshield, or loose teeth in the cup holder (true story)? The universally accepted model has always been to ignore and discard high mileage cars, but this practice can cost you $ 1,200 in annual profit through reduced depreciation.
What you can do today: Restore all high mileage vehicles in your fleet. New technology is available that completely eliminates odors, resetting the car to neutral factory condition within minutes. Your customer’s first impression will be positive and you can enjoy an additional 12 months of higher margins.
Chase Yesterday’s Client
Operators still spend hours every day dynamically managing pricing, but consumers in the COVID era are concerned about health and airborne contaminants. How many operators have you seen actively market their vehicles as âhealthyâ? Today’s consumer will likely pay a little more for their safety and that of those around them.
What you can do today: Accept emerging customer expectations by promoting vehicle health, not just price. Differentiate your brand and fleet by ensuring vehicles are thoroughly cleaned and deodorized (no dangerous 80s machines). So shout it out on social media. Intentionally develop a healthy consumer base who only praise brands they trust.
Fancy the “good old days”
Most operators are hanging on, waiting for the return of “normal”. In contrast, operators who address new customer priorities, employee needs and market trends will find the prosperity that others lack.
What you can do today: Instead of looking at spreadsheets and emails all day, go out and talk with your customers and employees. Ask them about the things that matter most to them now. Then ask yourself how your own goals can align with theirs. The loyalty of customers and employees is totally to be gained, and will be rewarded to those who adapt.
The good news
These tactics are either free or very low cost, and they are available to you. today. Will you choose hope and luck? Or will you choose a better way? A profitable future is yours.