RM Tips and Strategy

How to prepare the yield management transformation? 3/5

Emmanuel Scuto
December 23, 2021
This new article will present the WeYield approach to the learning and how to play with yours doubts to improve your piloting via detailed data aggreation and alerting system.

It is possible to accurately compare your current activity to your past activity and to anticipate the future! Thanks to a methodology and dedicated tools designed by WeYield, you can automatically have the data to monitor and interpret the observed situations with less effort. Ready to change your software? Let's go for the 3rd step of your transformation.

Do you know the 4 phases of learning according to Abraham Maslow?

  1. The first phase is that of unconscious incompetence: "I don't know that I don't know". At this stage, the person has neither the knowledge nor the experience in a field. But they don't know it, so it's not a problem for them.
  2. The second phase is that of conscious incompetence: "I know I don't know". Here, the person becomes aware of his or her lack of competence to do something and of the need to acquire new skills. This realization can be painful. It is not easy to question what one has always done!
  3. The third phase is that of conscious competence: "I know that I know". In this phase, the person is learning. Performing the new task requires an effort. 
  4. Finally, the fourth phase is that of unconscious competence: "I no longer know that I know". Here, the skill is completely acquired. The experience is sufficient to perform the action efficiently and automatically.

This approach applies to all learning. Yield management is no exception. Have you been running your car rental business for years in the same way as your predecessors did? Your decisions are based on well-established reflexes and you don't see any other approach possible? You are probably in phase 1.

Are you beginning to question your method? You find that collecting your data is time-consuming and incomplete? You lack a clear vision of your activity and elements to anticipate but you do not see how to do otherwise? You are in phase 2.

Are you discovering the potential of yield management? Are you organizing the automatic collection of your data, selecting the relevant indicators for your business and fine-tuning your analyses? You are in phase 3. Your horizon is brightening.

At the end of phase 4, you have full control over your data and indicators. You have total clarity on your business. You have freed up time, which you can devote to your strategy.

When you doubt your analysis of your car rental elements

We can stay for years in phase 1, without asking ourselves any questions. It's a bit like the fishbowl of beliefs that confirm us in what we've always done. Often, the trigger occurs when the cogs that we thought were well oiled are seized. For example, your business was essentially based on partnerships with brokers. 70% of your business was done with two intermediaries. You were confident in the durability of this relationship. But they suddenly break it off, assigning their volume to a competitor without explanation and you have to row back to your usual level of activity. Another example: you are convinced that your fleet volume can only increase year after year. But the manufacturers are facing a shortage of components and they decide to privilege the sale to private individuals. These events lead you to question the elements of analysis on which you usually rely. You feel that it is time to change, but how to do otherwise? Maybe it's time to move to phase 3 and adopt a yield management approach.

At WeYield, we help many car rental companies to change. Our approach is to ask different questions, get the right information, broaden the source, draw the right conclusions and then make informed decisions. For example, one of our clients wanted to lower the price of its minis. Why? To increase the volume of bookings, which seemed low. We got him to look at whether he was ahead or behind the same time last year, whether the pace was slowing down or accelerating, whether his price was correctly positioned in his market... Thanks to this analysis, he realized that the situation was better than last year at the same time. Lowering the price would have meant an unnecessary erosion of his margin.

Highly detailed yield management data, tailored alerts

To perform these fine-grained analyses, WeYield's car rental web applications provide you with the right data; are you going faster or slower? Are you early or late? Are you slowing down or speeding up? Do you have the fleet you need for the business? Are your prices in line with the expected average price? Are they below or above market? On a more macro level, does the tactic you choose fit well with your company's strategy? Will it allow you to achieve the objectives set at the beginning of the year? Depending on the answer, the decisions to be made are different.

We provide you with short and long term data to allow you to anticipate. This anticipation allows you, for example, to have the best possible filling rate. It probably happens that you have to refuse reservations for several days because you are already full on one day. If you analyze this peak, you can identify the type of reservation that penalizes you. For example, you may find that it is customers who book for short periods of time. You can then decide to allow only longer bookings during this period, consciously leaving the short term rentals to your competitors so that they are in a constrained situation.

WeYield insight tool automatically calculates a whole range of data on your fleet, on all your stations, on all car groups and on each market segment. This level of information is impossible to achieve manually. Our technology provides you with this information, and it is updated daily.

In addition, you can set up personalized alerts that can be adapted according to the period and the context. For example, some alerts are more relevant in high season, others in low season. For example, you can decide to be alerted on a maximum utilization rate on a type of vehicle to avoid overbooking (for example, 5-7 seats during vacation periods) or to receive a notification as soon as your sales volume accelerates faster than the previous year, anticipating a possible risk of filling up at a too low price.

Automated and personalized, this information allows you to comfortably and serenely apprehend your present and future situation. All that remains is for you to take the 4th step in your transformation: making operational decisions with complete peace of mind. To be continued!

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Emmanuel Scuto
December 23, 2021

Expert in Revenue Management and Pricing in the Car Rental industry for 20 years, I aim to share my optimization experience with our customers throughout the world. I am specialized in revenue maximization, pricing strategy, yield management, reporting based on AI.

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