Yield management in vehicle rental is an essential strategy for growth. Why is this?
Yield management consists above all in tailoring prices according to demand and various criteria. Widely used in the hotel and transport sectors, there is also a growing number of yield management strategies in vehicle rental management. Perfectly tailored to service companies, this trend is becoming more and more popular.
What is yield management in car rental?
Yield management in car rental corresponds to an optimization of the yield of the vehicle rental. This technique is based on real-time pricing, also known as dynamic pricing. In short, the higher the demand, the higher the rates, and vice versa. The democratization of internet bookings and price comparisons has accelerated this trend. Note that dynamic pricing should not be confused with customized pricing, which relies on the individual profile of the consumer to tailor the price. This practice is formally prohibited in Europe.
Within the framework of yield management, the price and duration of a vehicle reservation are tailored to obtain the most coherent offer possible according to the situation. A perfect example of yield management in car rental is to charge slightly more in periods of high demand in order to be able to lower prices in off-peak periods and attract more users.
Maximizing the price of car rental in real time therefore optimizes margins and turnover. The price is no longer fixed as it is with many vehicle rental companies, but evolves according to demand. This allows you to differentiate yourself from your competitors, to increase your turnover and especially your occupancy rate. More importantly, the consumer will feel that their price is tailored to their situation. Yield management in vehicle rental management increases the flexibility of your offer and thus your customer base, whether it is for short, medium or long-term leasing rental.
Yield management techniques in car rental management
There are many yield management techniques in the management of car rentals. Offering tailored and variable pricing to maximize profits is not necessarily obvious at first glance and it is necessary to analyze several criteria. The criteria that need to be studied concern the annual history, the duration of the rental, the reservation period and the threshold of availability of your vehicles but also the weather or the presence of an event likely to influence the demand of rental companies. A great capacity of analysis and anticipation as well as keeping a close eye on competitor’s prices can then influence the price directions to be followed.
These forecasts and prognostics will thus determine the yield management strategyfor vehicle rental. This strategy must be continuously tailored up to the last moments of the reservation in order to anticipate demand. Fortunately, technological developments and the multiplication of data now make it possible to apply these techniques in an efficient and automated manner.
Optimize your vehicle rental activity
Yield management is therefore an invaluable technique for optimizing vehicle rental activity and increasing customer satisfaction and the number of customers. It is not just a fad, as it dates back to the 1980s and has enabled many airlines to truly develop. The complexity of the vehicle rental sector makes it necessary to be tailored to new development trends, and yield management is certainly one of them.
Thanks to its experience and expertise in the vehicle rental market, hitechsoftware recommends tailoring rental offers according to yield management methods for vehicle rental. Coupled with a management solution for vehicle rental companies such as myrentcar to extract the right data, this marketing strategy will allow your rental company to get a real head start on the market. Find more information on our car rental software here.