Local Sales and Marketing Reference Guide

The replacement area is one of the largest market segments in the local market. It can offer a quick return for your efforts. A sales person can make calls in the morning and have business referred in the afternoon. It will take work to develop the market but if you offer reliable, cost effective service and make regular sales calls you will obtain the customers. Companies such as Enterprise focus their efforts on this source of business almost exclusively. This is a great source for Monday through Wednesday business, although you will have a high rate of returns on Friday.

There are two main components: insurance replacement and service or dealership replacement. In both cases the customer requires a temporary vehicle while their car is in for repairs or maintenance. With insurance replacement, the customer has been in an accident and an insurance company is typically involved. In service replacement, the customer’s car is in for mechanical service or repair. In either case you will have a number of "customers".

There will be the person who actually rents the car; others will include service writers, body shop personnel, claims adjusters and insurance agents. It is important to consider all of these people as the customer. The person doing the referring and the person renting the vehicle are both your customers. It is also important to carefully consider the commitments required before entering this segment.

Once you build relationships and the service writers depend on you, stay with it. The business can be capacity controlled, but be careful of turning the business on and off depending on your utilization as these are typically long term local business relationships.

Service Replacement

The customer takes their car in for mechanical service and needs a temporary vehicle. Automobile dealership service centers tend to be the largest source of business in this area. Don’t exclude other service centers such as Goodyear, Firestone, etc. This will be a large source of midweek business, particularly on Monday morning when they schedule the majority of their customers. The service writer’s main requirement of a car rental vendor is to provide a reliable, fast, cost-effective replacement vehicle for their customer. Remember the service writer is extremely busy and in terms of car rental, they want their customer in the rental car and on their way as quickly as possible. The car rental company they recommend is a reflection of them.

You will need to develop a rate structure for this market segment. Rates for service replacement tend to be discounted off your rack rates. They are billed using 24-hour billing. The length of rental is typically a couple of days and may require some direct billing back to the dealership. The rates you establish will depend on the conditions of your particular market. In order to determine what is right for your market, conduct rate surveys with the competition and talk to the service writers to determine their needs. The other rate structure to develop is warranty rates. These are rates that the automobile manufacturer has established to pay for car rental when the repair and rental is covered under warranty. The rates will vary from manufacturer to manufacturer, but are typically in the $22.00 to $30.00 range, on a 24-hour billing cycle. Check with your local dealership to get a current warranty rate listing.

The Sales Call

Generally, a call on a dealership or service center does not require an appointment unless you intend to see the service department manager. The service writers are the ones that refer their customer to a car rental company and are usually a good place to start. Bring fliers or rolodex cards to leave behind that highlight your services and phone number. Many service areas have a display area where you can place your information. They need to be in the hands of the service writer and visible to the customer. You may consider installing a direct line telephone. This gives you "ownership" of the dealership, offers great visibility and is cost effective.

Examples of typical comments to prepare for on the call:

Comment: "We already have a supplier we are happy with."

Response: "That’s great! I can appreciate your loyalty to a supplier. When they are out of cars, or for any reason they can’t fulfill your needs, you can count on us as a back-up supplier."

When they do try your services (and you give superior service), you will start seeing more and more business. You usually don’t walk in and get a dealership to hand over all the business. Start with small needs and build on them until you are soon the main supplier.

Comment: "Enterprise purchases cars from us".

Response: "We would appreciate the opportunity to act as a back-up for you." (Focus on your location’s individual strengths.)

This is a common tactic of Enterprise. They place locations in the middle of dealer row, and then buy a handful of cars from many dealers.

Comment: "I don’t want my Ford, General Motors, etc. customers in a competitor’s vehicle (Chrysler)."

Response: "Using Thrifty as well would provide you with a wider variety for your customers to choose from."

Once again, act as a back up with dealerships referring to you as a back-up supplier, which can also give you a steady flow of referrals. Soon you may start to see your position move from back-up supplier to their main supplier.

Also, if you have a mix of vehicle types, make them aware of it, but don’t make any false promises.

Comment: "Do you pick up my customers and return them after the rental?"

Response: (Will vary from location to location.)

You will most likely need to offer this service. When you pick up the customer, try picking them up in a car you would up sell them into so that they get to try the car on the ride to the location.

Due to the high service levels required and the aggressiveness of the competition, service replacement requires a high call frequency.

Other car rental companies are famous for delivering doughnuts and other goodies to win over the business. You may also rent ice cream trucks and pass out sodas on a hot summer day, rent pizza delivery vans and even hold mixers at local restaurants. Remember that nothing will get you the accounts better than quality service that is reliable.

Insurance Replacement

This segment deals with the customer that has been in an accident and needs a replacement vehicle while their car is in the body shop. Insurance replacement requires high service levels to properly handle the business. As with service replacement, this is midweek business but with a much longer length of rental (a couple of weeks). There are a number of terms you will need to be familiar with. Let’s review the more common ones.

Insurance Replacement Terms

Calendar Day Billing - The insurance companies that pay for the rental cars pay on what is known as a calendar day. They consider a day to be the actual date, not a twenty-four hour period. For example, the customer takes their car in at 12:00 Monday and picks it up at 11:00 the next day. That would be charged as a two-day rental versus a one-day using the standard 24 hour billing method. As with Enterprise, one-day rentals are the exception with insurance replacement. Enterprise will use the normal 24-hour billing for the first day as a service for the insurance company. One-day rentals usually mean something was not ready at the body shop and the customer will need to return their car at a later date.

Insured - This is the person that has the insurance policy which includes automobile rental coverage while their car is in for repair. These policies vary from company to company and you should become familiar with language and terms. For example, State Farm has a policy that pays $16.00 per day, Farmers $25.00 and Allstate $20.00. These policies have maximum payouts that range from $500.00 to $1,000.00.

Claimant - The claimant is the person that was hit by the insured. They have a claim against the insured’s insurance company which is paying for the repair of their car and the rental car. They are normally put into similar vehicles as the one they own and are kept in the rental car as long as their car is in for repairs.

Claims Adjuster - The claims adjuster is a key contact. They coordinate all the pieces associated with a claim including choosing a car rental company. A claims adjuster is extremely busy. If you help them make their job easier, they will in turn rely on you.

Set up a file for callbacks. (A call back is a call to the adjuster asking for extensions on the car rental. They usually authorize rentals for a couple of days or weeks at a time.) Before you call the adjuster for an extension, call the body shop and ask them how much longer the car will be in for repair. When you contact the adjuster, you have saved them a step by contacting the body shop. They will usually extend the rental right away. When the customer’s car goes into the shop, the adjuster has authorized the rental for a specific period of time.

Using a tickler file system, call the body shop and adjuster one day before the authorization expires. It is a good idea to group all the body shops and claims adjusters together to avoid duplication of calls.

Agent - The agent is the person that sells the policy to the insured. They are a source of business as they recommend car rental. This is most likely the place where you will go to meet the customer. Also, you will talk frequently with these individuals when it comes to extensions.

The primary sources of business for insurance replacement are the claims adjusters, insurance agents and body shops.

Claims Office

Calls on claims adjusters are made at claims offices, which are very busy places. If you have a relationship with an adjuster, you may be able to walk in unannounced and get a few minutes of their time. Generally, it is better to make an appointment. A good opportunity to make an appointment with the adjuster is during your callbacks. Ask for a time to come by so that you can leave some materials and update them on your services, fleet, etc. Ask if you can distribute material with the other adjusters, such as pens, paper, etc.

Agents

With insurance agents, an appointment is not typically required. Although as with any cold call, you run the risk of not being able to see who you need to. These calls don’t require formal presentations, but you do need to explain your services and have some material prepared to leave behind.

Body Shops

With a few exceptions, these are cold calls. Ask to see the manager or owner. They will ask if you have a pick-up or delivery service and inquire about price and types of vehicles in your fleet. These calls are similar to calls on automobile service centers.

Timing is very important for calls in the replacement industry. Typically, it is not a good idea to make these sales calls on Monday morning or Friday afternoon.

Insurance Requirements

Prospecting: Warranty/Insurance Replacement

• Auto dealerships
• Body shops
• Transmission shops
• Detailing shops
• Brake and muffler shops
• Auto painting shops

Your Contact

• Service writers
• Service directors
• Accounting department
• Adjusters
• Insurance agents

Tools to bring

• Business cards
• Rolodex cards
• Fleet sheets
• Fliers
• Promotional items (pens, pencils, pads or cubes, etc.)
• Tent cards, if permissible

Vehicle replacement business is:

• One of the largest market segments in the local market.
• Instant gratification for your efforts.
• Great source of Monday through Thursday business.

Two main components:

• Insurance Replacement - Customer has been in an accident and insurance company is involved.
• Service or Dealership Replacement - Customer’s car is in for a mechanical or service repair.

Source of customer referrals:

• Service writers
• Body shop personnel
• Claims adjusters
• Insurance agents

How to build a relationship:

• Offer strong commitment to provide consistent service.
• Develop friendship with service writers.
• Do not turn business OFF and ON depending on utilization.
• Provide a reliable, fast, cost effective replacement vehicle.

How to set up shop rates:

• Make a survey of your competitor’s rate.
• Meet with the Service Director and determine their needs.
• Find out what manufacturers establish car rental rates if repair is under warranty.
• Check your current warranty rate listing with the local dealership.

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