The car rental industry can be quite lucrative. Some customers only need a comfortable option to move them from one point to another. Others want luxury travel options for special occasions. This is a testament to the fact this industry has some great potential.
Looking back, I can attest that getting into the car rental business can be tough. It’s why I went into the dealership world instead. Not everyone has the finances needed to start this venture. Those who are lucky enough to mobilize resources and start this business need to ensure that their vehicles are being rented. Humbly, the car rental industry has taught many people a lot. And here is a sneak peek of what I have learned from my friends in the industry.
Have a Business Model
When my friends started our car rental business back in the day, their main plan was to buy enough cars for our business and market our business. I can attest that luck was on their side, and the industry was not very competitive then. My friend’s advice to aspiring entrepreneurs who would want to have a stake in the car rental business is to have a business model before venturing into this industry. Having a business model is not enough though; be consistent in following it.
Understand Your Customers
Having cars is not always enough. My friend quickly came to terms with the fact that each customer is unique after reading articles such as this one from Salesforce.com. As such, treating them as an individual and giving them targeted customer service can be a good strategy to making a successful business.
Some clients prefer using luxury rental cars exclusively, while others do not mind renting a used car provided it can get them to your destination.
So one of the first lessons they learned in the car rental business is to pay attention to what the customers need. By doing this, they understood what their customers wanted and offered them exactly that. This meant having a huge fleet of vehicles, ranging from simple Uber-like cars to high-end luxury cars, such as sedans and limos.
Invest in Sales and Marketing
Back in the day, people in the rental industry took it upon themselves to utilize popular advertising channels such as TV and newspaper ads. This move made things a lot easy for them, and as the business grew, they always allocated a larger budget for marketing.
The marketing landscape has significantly evolved over the years and so should the business marketing strategy. My friend’s advice to aspiring entrepreneurs in this industry is to have a reasonable budget for promoting their business. If possible, make sure every available marketing field is covered for a wider reach.
Keep Prices Updated
Pricing plays a critical role in the car rental business. Car rental prices are subject to seasonal changes in demand. Besides seasonal variations, car rental prices vary depending on a list of other things, such as the car’s size, booking times, and car type.
In my friend’s case, they always granted a discount to customers who paid in advance. They also vary the rates when moving up in size. Price updates, especially when viewed from a seasonal perspective, play a huge role in keeping any car rental business afloat.
Pay Attention to New Markets
The car business is always full of opportunities. And opportunities are a key driver of growth in any industry. For instance, Rent-A-Car managed to be one of the biggest auto rental companies just by going the extra mile to help drivers who needed a short-term car replacement. My advice to anyone with the sights of making it big in the car rental industry is to go where your competitors do not. I call this getting out of the comfort zone. Remember, many people don’t like getting out of their comfort zone.