Car Rental Software - Ultimate Guide (4): Operational Processes

In part 3 of this guide to car rental software as it stands today, we looked at Dynamic Pricing for Car Rental. In this part we get operational. We look at how operational processes translate into rental software.

Creating a Booking

When creating a booking, we distinguish between short-term rental and long-term rental, also known as shortlease and lease.

Short-term rental

Ease of creating a booking is essential for good car rental software. In fact, you only need three steps to create a booking:

Ease of creating a booking is essential for good car rental software. In fact, you only need three steps to create a booking:

• Step 1: You want to know where and when someone needs a rental vehicle;
• Step 2: You want to know which rental vehicle someone needs;
• Step 3: You block the available vehicle and note down a name and phone number. Done!

The catch, however, is that this way you 1) do not get the maximum return out of a booking; 2) you miss essential customer information and 3) you leave opportunities to bring your cash flow forward on the table.

1) Maximising revenue during a booking

The seasoned rental operator probably jumped when reading the required steps: 'Where are the upsells'?!

Our own data research shows that upsells can contribute to a revenue increase of up to 40%. Upsells such as mileage packages, excess waivers, glass and tyre cover, but also administration fees, turn out to be real cash cows.

It should therefore be clear that selecting upsells is a must-have when creating a booking. The question is where in the rental system this option should sit. In the first versions of our rental software we had chosen to select the upsells between step 2 and step 3. That choice was mainly driven by e-commerce thinking. You only enter your details once you have finished creating a booking. In other words, details are entered after the upsells.

Although we still stand by this choice, we have had many discussions with customers about the logic of this position. After all, many counter staff only sell the upsells after entering the customer details (or skip the step altogether). There is something to be said for this post-upsell approach too.

For this reason we opted for a compromise. We put the customer details and the upsells on the same screen, so that counter staff can follow whichever order they prefer. This is in line with our car rental website integrations: there we also use a mix of upsells and post-upsells.

** 2) Essential customer information **

A second jump from the seasoned rental operator was no doubt made at only noting down a name and phone number on the customer record.

"Without address details I cannot run a blacklist check."

"For a business customer I need to enter the Chamber of Commerce details, among other things."

"I also need an e-mail address to send the booking confirmation to."

The finance department will have jumped too. To refund the deposit, the IBAN number, among other things, is essential.

Here too we weighed up creating a quick booking on the one hand against completeness of data on the other. We chose to ask for a minimal set of details for a 'fast check-in' (name, e-mail and phone number). All other details are optional and can be added later in the rental process (for example when the customer is at the counter).

** 3) Cash Flow Management **

Every rental operator has experienced it. A booking was made, but the person never turns up. You have not rented out the vehicle and you can whistle for your money.

To solve this problem, you can choose to integrate a payment provider into the rental system. After a booking is created, you automatically send a payment link for the rental and/or deposit. The customer has to transfer this amount within a set time to confirm the booking. This will significantly reduce no-shows.

We are aware that the approach above also has an important drawback. Customers can be put off if they have to pay straight away. In addition, customers in the rental industry do not always have the money to pay immediately. You can therefore choose to send the payment link anyway, but not make the booking confirmation dependent on it. Some customers will pay this amount up front, which still lets you bring part of the cash flow forward. We surely do not need to explain that a euro today is worth more than a euro in the future!

Shortlease and lease

The approach above is mainly driven by short-term rental. For shortlease and lease it matters less: upsells make up a smaller share of the rental, the minimal customer details of the fast check-in are not sufficient and customers pay a monthly amount instead of a one-off amount.

That said, the steps for shortlease and lease bookings are still the same as for short-term rental. There is one important exception, however. When creating a booking you need to be able to set the rental period, indicate whether the subsequent agreement renews automatically and set the moment of invoicing (in advance / in arrears).

The rental software also needs to take into account the availability of vehicles that are in 'long-term' rental. You obviously do not want the vehicle to be booked for a day just before the long-term rental is renewed.

Replacement Vehicles

Good rental software also caters for replacement vehicles. A major challenge lies in the fact that at least three parties are involved:

• Customer;
• Rental or lease company;
• Dealer / body shop.

When creating a booking for a replacement vehicle, as a rental company you want the final invoice to go to the dealer or the body shop. The customer, however, still needs to receive an agreement and an invoice for extras beyond what the dealer / body shop is providing.

From Booking to Rental Agreement

Once a booking has been made, at some point it needs to be converted into a rental agreement (usually when the customer comes to collect the vehicle).

In practice, both in the B2C market and, to a lesser extent, the B2B market, the sales process of the booking repeats itself. You complete the customer's details and sell any upsells. As above, it is debatable which aspect comes first.

Next, the booking needs to be converted into an agreement. The traditional way is to print the agreement, have it signed and scan it back in, but that is of course outdated.

We advocate the following approach:

• Step 1 (prior to the agreement): e-mail the customer the unsigned agreement;
• Step 2: Receive and register the customer's (deposit) payment;
• Step 3: Inspect the vehicle together with the customer and hand over the key;
• Step 4: Have the customer sign digitally for the rental agreement and damage. Then send the digitally signed documents in one e-mail.

During and after the rental period

Besides respecting the rental period, the customer may ask to extend the rental period or to end it early. Something may also happen to the vehicle, meaning it needs to be swapped mid-rental. The car rental software needs to provide for this.

After the rental period the agreement is closed. Before the final agreement can be drawn up, however, the closing mileage matters, as does any fuel not topped up and any new damage. Costs that come in afterwards, such as fines, can be charged via ad-hoc invoices.

Although in many cases this is the final stop, the vehicle may also need to be transported to another rental location. Good rental software flags this.

Overview & Management

Creating a booking and handling an agreement is of course essential, but having an overview of all your bookings and agreements is at least as important.

A logical way to create an overview is to follow the questions that come up in practice, such as:

1. What do I need to send out today?
2. Which vehicles do I still have free?
3. Which vehicles do I need to transport?
4. Where do I find the information for a specific booking?
5. Which agreements require action?

Simple, then. The overview you provide must at least answer the questions above.

But how do you present the overview? Some people like a data view, while others are more visually minded.

For this reason we chose to present the overview twice. A data view in the dashboard and a visual view in the planning board.

Dashboard

In the dashboard you find an overview of the tasks that need to be done in a given period. Think of the vehicles that need to go out today, which bookings or agreements require action, the number of free vehicles / vehicle classes, the transports to be carried out and an overview of customers who still need to pay.

Planning board

The essence of the planning board is to show clearly, per vehicle class and per vehicle, whether it can be rented out. But the planning board offers more.

• You can create bookings directly from the planning board;
• You can go straight to bookings and agreements;
• You can move a booking to other vehicles / vehicle classes;
• You can filter by vehicle attributes (e.g. no advertising, with tow bar);
• You see which vehicles need to be moved;
• You can view the attributes of a specific vehicle directly; and
• You see at which location vehicles are.