Yesterday, J.D. Power and Associates (JPDA) released its 2010 North American Rental Car Satisfaction Study. If it wasn't already established in the past six years, Enterprise is the Los Angeles Lakers of the car rental customer experience.
But there is good news for the industry as whole, as satisfaction has snapped back from the negative impacts of the recession. (The overall Satisfaction Index stands at 750, the same as in 2007, before it dipped to 734 and 733 in the past two years. Yet it's still far from the 767 posted in 2006.)
To dig a little deeper into the numbers, I spoke with Stuart Greif, the director of the study for J.D. Power and Associates. Here's what we two data geeks chatted about:
The economy was, to no one's surprise, a huge influencer of overall scores for the past two years.
The Economy, Stupid
"The macroeconomic conditions affecting both business and leisure travel as well as consumer discretionary spend are going to have a demonstrable impact," says Greif.
"Macroeconomic conditions can pose the greatest challenge when revenue is down and [car rental companies] are looking at how to reduce operating costs and manage profit through a downturn."
That dynamic holds true for satisfaction in other travel industries, says Greif, though interestingly enough, scores in airline surveys were bumped up a bit during the economic downturn. That's because during the recession airfares were lower and there were fewer passengers flying. This resulted in less congestion at airports and in planes, fewer checked bag problems and fewer complaints with baggage fees. Nonetheless, airline scores were still much lower than in 2006, before the onset of those onerous fees. Aren't you glad, car rental, you don't have to slap that on your customers to increase your bottom line?
More good news-levels of commitment and "loyalty advocacy," i.e. those that definitely will rent again and recommend the brand, are up 2 percent for the business traveler and 5 percent for the leisure traveler.
How It's Scored
Some survey procedural questions: Why are some brands included in some years and not in other years? JDPA needs at least 100 surveys for the data to be statistically relevant and thus rank a company in the survey. JDPA tries to increase the sample size if a company is close to that mark, time and money permitting.
Also, the seven categories (reservation process, pickup process, return process, rental car, shuttle bus/van, cost and fees and then overall satisfaction) are not weighted equally. Greif's team uses their Ph.D. brain power to qualitatively extract from each survey which part of the rental experience was most important to the individual respondent. The survey actually breaks down each category into further components. The rental car category has 10 subcategories, and one of those is "smell." If one graded smell as a two, (i.e., the car stunk) while other subcategories fared well, that very low score is weighted more heavily in the overall average. It was obviously very important to that renter's experience.
Generally speaking, the rental car itself is about 20 percent of the overall score, the return process is roughly about 20 percent; cost and fees constitute about 25 percent, while reservations, shuttle bus and van matter a lot less. Speed makes a big difference, obviously in the pickup and return processes, Greif says.
I thought it would be interesting to compare customer satisfaction scores in different ways, such as with airports that have consolidated rental facilities and those that don't. The data at present isn't sliced that way, according to Greif.
The Rate Factor
In general, Greif says because the industry is on firmer financial footing now, the factors that lead to declines in satisfaction (staff cutting, older rental cars) are reversing themselves, which have had a positive effect on scores.
The industry started buying again in the first quarter, mitigating the trend of high-mileage cars during the recession. Newer fleets factored into higher scores in the rental car category for this year, and Greif expects that positive correlation to continue into next year's survey.
In terms of rates, Greif has seen a bump in rates for leisure but not necessarily for corporate. While high rates are good for the industry, they're not good for customer satisfaction scores, generally speaking. Higher rates may cause lower scores moving forward. However, "We think that [trend] will be more than offset by the improvements in the operations regarding sacrifices made during the downturn," he says
Business Travelers Are Tough Graders
The survey does not officially rank business versus leisure, but JDPA does identify respondents on business or leisure trips. In general, business travelers are tougher graders but they tend to be more loyal, Greif says.
Overall, business renters graded the industry at 738, while leisure travelers gave a grade of 759. This higher leisure grade is true even among the brands that focus on the business traveler: Avis scored a 722 with business travelers and a 755 with leisure travelers. Hertz scored 744 for business and 776 for leisure. National scored 771 for leisure, 764 for business. (Enterprise, for that matter, scored 775 with its business customers and a whopping 792 with leisure.)
A Look at the Brands
It's somewhat surprising that Avis scored below the industry average. In other years Avis has scored solidly in most categories, but was brought down because of its premium prices. This could be a similar case for this year. (Editor's note: Avis always seems to win more than its fair share of global travel awards. I wonder how the criteria are different for those other surveys?)
The biggest brand surprise in this survey is Advantage, which beat out Budget, Dollar and Thrifty in satisfaction. We both surmised that Hertz's ownership was the main factor in its improvement. Advantage's score of 731 is pretty incredible when you consider its score of 674 in 2008.
In the past few surveys, as well as this year's survey, Dollar and Thrifty have scored consistently low. Customer satisfaction is obviously important in any company's playbook, but how Dollar and Thrifty provides customer service as value brands is certainly different than the premium brands. Perhaps there's not a way to factor that into the survey. In one sense, who cares? DTAG is being run very well right now and its business model is working.
Back to Enterprise: "Enterprise is a unique case in that they've really understood what matters to travelers," says Greif. "The ability to have consistent performance like Enterprise does and to have three of the parent company's top four brands at the top shows something about the overarching management of the company and how they focus on the customer experience."
As this is an airport-focused study, Enterprise's "we'll pick you up" benefit is irrelevant to this data set, though Greif says the RAC probably gains some positive bleed in the customer's mind from getting picked up in local rental experiences.
Really, the industry owes Enterprise a seventh round of congratulations, because when it comes to praiseworthiness in any customer-facing industry, "a rising tide lifts all boats."