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Author: Anirban Mukherjee | 08/11/17

What is wrong with Car Rental services today

When you are back from business travel or a leisure trip and recall your experiences of the trip, the car rental experience is more often than not, forgotten. This has nothing to do with the car rental industry lacking the tools, technology, customer service options or fleet on hand. The core issue lies with the approach taken by the providers themselves — that ‘Car renting is just a service and not an Experience’. This approach or mindset is unfortunate, considering 86% of the customers are willing to spend more for a better customer experience.

What is wrong with Car Rental services today

Customer Journey/Lifecycle in Car Rental: Source: Competing on Customer Journeys, Nov 2015

Let us look at the moments of truth for a customer during a car rental process and understand the pain points.

Book a Car Rental

60% of car rentals today are booked from a channel not owned by the rental service provider. They are usually, aggregators, Online Travel Agencies (OTAs) or partner channels. The primary reason for this, is availability of more options under a single touchpoint. Also, the customer does not get any specific value add (like personalised engagement, real-time support/advice etc.) other than loyalty points when booking from a car rental provider’s own site. Another adverse impact of booking from other providers rather than a car rental provider, is that the bulk of the customer data remains with the 3rd party. As a result, car rental providers cannot make use of customer-specific data for their own marketing programs.

Start of Rental

When you head up to the car rental provider, the scene is no different, in terms of customer experience. The customer service agent bombards you with product information, selling tools, outdated copies of coverage options, standard Terms and Conditions and so on. Most of the time, you are just looking to finish with all the formalities quickly and drive away. At this stage, almost 70% of the customers feel, efficient customer representatives could go a long way in creating a positive customer experience. Hence, the onus is with the car rental provider to equip their customer service representatives with smarter ways to engage.

During the Rental

Getting bogged down by a car problem in the middle of nowhere, far away from the closest support centre, is every customer’s nightmare. For any help and support during the rental period (be it car breakdown, extension of rental, replacement etc.) the mode of communication with the rental provider is most likely to be phone and email. And even during an emergency, the customer has to go through the standard IVR systems before the support is provided. Imagine the ordeal! And as statistics reveal, 91% of customers cut ties with an organisation where they have experienced poor service.

End of Rental and beyond

This is where it tends to get worse. Car return is often entangled with the sales process, requiring customers to spend more time with the branch manager. After a detailed inspection –with more time taken than usual in the unfortunate event of car damage/accident — the invoice is finally presented to you. And you are in for a shock! The final amount billed to you is significantly higher than the amount you had seen while making the reservation. This could be owning to the ancillaries or extras you opted for. But it still isn’t any easier to reconcile yourself to the additional expense.

And once all of this is over, there is no attempt made by the Rental provider to keep the engagement going with the customer by means of personalised promotions, greetings and surveys. So, the probability of repeat business, even in the case of an excellent service, is lost. Considering the probability of an organisation selling to an existing customer is 60-70% (compared to 5-20% to a new prospect) this is a huge opportunity lost again.

So, in the current state of affairs, what can the car rental providers do differently to create a positive experience and move away from the process mindset? Creating a delightful customer experience is dependent on how well an organisation can address the 3 key questions given below:

  • Understand the customer’s segment and the job to be done (Consider Phase)
  • Understand how to engage with the prospective customers and convert them to paying customers (Evaluate and Buy phase)
  • Understand how the customer feels about your service (Buy and Loyalty phase)

We’ll take a closer look at each of these questions in my subsequent blog posts. Stay tuned….

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