RM Tips and Strategy

How to prepare the yield management transformation? 4/5

Emmanuel Scuto
January 27, 2022
To conclude this serie of five articles by emphasing the fact that WeYied aims to help the car rental operators to take operational decisions with more clarity with less effort, more visibilty and less stress. This is what I call piloting with peace of mind. It requires to change the approach that has been put in place. But the results will be so amazing that you will question yourself why you did not do it earlier.

Take car rental operational decisions with peace of mind

Car rental professionals, you want to increase your performance. Easier said than done! The weight of habits, reflexes acquired over many years, the increasing cost of vehicles which puts pressure on volume at all costs, slow down your will to change. It's not easy either when faced with the uncertainty of the future and the lack of visibility in a tense economic and health context. You understand, you need to abandon your automatisms and transform your organization. At WeYield, we propose a 4-step transformation.

Let's start with a short reminder of steps 1 to 3, presented in previous articles. The first step is to automatically collect and aggregate your data. Indeed, many car rental companies tell us that they would like to improve their level of information. With the help of technology, it is possible to continuously collect and aggregate all useful data in one place.

The second step is to visualize the relevant indicators. These indicators must be carefully selected according to your context. They must be observed with the right reading level. These data must be reliable, enlightening and shared with all the collaborators concerned.

The third step is to detect deviations, i.e. to be able to accurately compare your current activity with the past and, above all, to anticipate the future. Thanks to a methodology and powerful tools, you can be alerted, detect and interpret the observed situations with little effort.

With these three accomplishments, we come to our ultimate goal, the one that will really change the game: making operational decisions with peace of mind and less effort.

Build your yield management with the adjustment decisions

Your decisions may concern prices. The idea is not to systematically lower them in case of a glitch, but to know exactly where you stand at a given moment: have your competitors evolved? Is your positioning consistent with your strategy and the type of service you offer to your customers? Are you satisfied with your activity level and the quality of your average prices? You can then adjust them, making sure you remain consistent with your market.

You can also make decisions about your inventory and which transfers to make. With WeYield's Insight tool, you have access to a variety of data on your fleet, your stations, on all car groups and on every market segment. And it's up to date every day. This gives you the ability to anticipate and help you make the right investment choices.

Make an informed decision in your car rental organization

We all have habits and reflexes. Some of them are even vital: stopping at a red light, respecting the rules of politeness... Did you know that our neuronal connections are protected by a myelin sheath, like an electric wire is protected by a plastic sheath? The more we use certain connections, the thicker this sheath becomes, and the deeper the habits become anchored. Hence the difficulty of making changes! As a result, when faced with the same situation, we tend to do the same things, out of habit, without thinking about it, even if we are not satisfied with the result.

Easter Monday is always a Monday, of course. But sometimes it falls during the Easter vacation, sometimes not. So the decisions to be made will be different. The economic activity during a pandemic and the constraints on travel lead to changes in behavior towards last-minute purchases that must be integrated into control.

Our automatisms come from what we hear, what we see, what we experience. Adopting a different approach implies "deprogramming" ourselves.  This is more or less easy depending on our personality: some people like to play, to take risks, others are naturally cautious or even anxious at the idea of testing new practices. It also depends on our situation: are we employees or managers? Are we committing our own money?

Our automatisms are often not adapted to the situation. Let's take an example. On November 29, 2021, Morocco closes air traffic to and from France. This generates a big loss of revenue because the holiday season is usually very busy. This situation is very stressful. Some rental companies, caught off guard, feel the need to act to reduce their stress. They cut their prices in half. But this makes no sense because there is no demand, no leverage. Conclusion: the best decision to make in this case is to do nothing. Deciding to do nothing is already a decision!

Let's take another example. A car rental company has scheduled a recurring price watch. He observes the car rental prices for the next 16 Saturdays. The 16th week in 2022 falls in April. But 80% of the business is done in the summer. So this operator is not watching the most strategic period for him. This is where WeYield's yield management support is crucial. We realized that he was charging higher rates at Easter than in the summer because his indicators were not relevant. We helped him to research them in more detail in order to optimize the high season.

We have also noticed that customers generally book their air tickets before booking accommodation and other services. We have therefore created the Air Analytics option in partnership with Forwardkeys, allowing to know the flight bookings on its destination and thus to anticipate the future car rental requests.

Having the right tools and expert revenue management support allows our rental car customers to have a complete view of their business and make informed decisions.

Integrating new rental reflexes

The transformation that WeYield proposes aims to improve your performance: increase your market share, reduce the share of low revenue customers, anticipate your business rather than undergo it, analyze faster and more accurately, with more clarity, therefore more serenity.

This transformation involves the use of advanced management technologies based on artificial intelligence to work faster, reduce stress, devote time to higher value-added tasks, consider new projects...

Capitalizing on our 25+ years of experience in car rental yield management, we act as a stepping stone for you to take the next step.

In three to six months, we can help you build the steps of your transformation to a more optimal organization that allows you to increase your margin with less effort.

Thanks to its experience, WeYield knows your situation, your difficulties, but also the immense opportunities that are offered to you by choosing the path of change.

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Emmanuel Scuto
January 27, 2022

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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