First, congratulations to the entire auto rental industry. Go ahead; take a moment to congratulate yourselves, as dangerous as that may be. Scores increased across the board in all six measures — the largest overall gains coming from Rental Car (+17), Shuttle Bus/Van (+17) and Costs & Fees (+17).
Jessica McGregor, manager of the travel practice at J.D. Power and Associates, writes: “Dealing from a position of greater financial strength and sounder footing, the industry continues to build upon and extend satisfaction gains achieved last year, and not only is bouncing back from lower levels of satisfaction reported in 2008 and 2009, but is also returning to levels of satisfaction last experienced in 2006.”
The business segment had a larger increase than leisure, improving 15 points overall from 2010, compared to a 3 point increase in the leisure segment. Business customers had the biggest gains in Costs & Fees (+28), Shuttle Bus/Van (+27) and Rental Car (+25).
“Business saw really large jumps on Costs & Fees, the Rental Car, and the Shuttle Bus/Van areas and this really drove their improvement this year,” McGregor writes. “It seems the satisfaction gap between the two types of travelers is lessening in this year’s study.”
In terms of technology leveling the playing field between small and big players, it hasn’t happened yet in a few key areas — namely mobile phone reservations and kiosks — to be statistically relevant. Only 1% of survey respondents reported booking on a mobile phone, while 3% report using an automated check-in kiosk machine. Interestingly, however, those that pick up using a kiosk have the highest level of satisfaction of any pickup method, J.D. Power reports. (For the survey, 10% of Alamo customers used a kiosk, followed by 7% of Ace customers and 4% of Hertz customers.)
For those pondering if the impacts of the tsunami (i.e. over-fleeting keeping rates competitive and upping scores) had any effect on survey results, no conclusions could be made based on the data. You might think this summer’s competitive rates (and over fleeting) may have produced a better Costs & Fees score, though we can’t make this conclusion based on the data.
Now, onto congratulating Ace Rent A Car for winning the 2011 J.D. Power and Associates 2011 North America Rental Car Satisfaction Study! But how did little ol’ Ace beat out the likes of the majors and their considerable infrastructure and resources? Read on.
This is the first year Ace has been ranked, as sample sizes were too small in previous years. (J.D. Power requires a sample size of 100 usable returns to be ranked in the rental car study.) This makes one wonder about methodology: If Ace only has enough returns to be over the threshold, can you really trust the numbers? J.D. Power says yes:
“The larger the sample, the greater the statistical power given a good research design and correct sampling techniques. However, research methodology demonstrates that at a certain point, the greatest accuracy is achieved, and thus any sample beyond that will have little, if any, influence on the overall accuracy and results. For our studies, we have determined that the accuracy – and confidence interval and confidence levels – is best achieved with a minimum sample of 100 usable returns, and anything beyond 100 usable returns will not have a significant impact on the overall results.”[PAGEBREAK]
Not surprisingly, Ace won the heavily weighted Cost & Fees category (35 points above the next company and 65 points above the industry average) and it also won the Shuttle Bus/Van category. Enterprise won the Reservation Process, Pickup Process, Return Process and Rental Car categories, with Ace a close second in these categories. After Cost & Fees, the categories that carry the most weight are the Pickup Process, Return Process and Rental Car.
Ace’s high scores aren’t coming out of nowhere; it had scored high previously — though unranked — and it has improved from last year’s survey. However, J.D. Power won’t release any numbers on inadmissible sample sizes.
The Human Factor
Ace’s story is good news for the Davids in a world of car rental Goliaths. This makes the little guy excuse, “they have more resources to throw at customer service, of course they’d win,” less viable now. Surely, running a newer rental fleet and newer shuttle buses, along with more frequent service, will make your customers happier. However, a clear path to tangibly better customer satisfaction results can also be found through better training of your personnel, especially your frontline staff — and you can control that without a huge infrastructure expense outlay.
“It doesn’t take much,” McGregor says. “It can be greeting someone warmly when they arrive and treating them with respect. It doesn’t have to be over the top, but just going that extra step to be friendly and make people feel welcome. The staff is the first and last interaction point; they can really make or break an experience.”
Indeed, J.D. Power surveyed customers on the human touch points throughout the rental process. Customers were asked about the courtesy and knowledge of the telephone staff, counter personnel and shuttle bus drivers, as well as the professionalism of the exit gate staff.
McGregor makes the point that in the hotel industry, the smaller Drury Hotels chain wins its segment because the hotel company differentiates itself through its staff service model. Sometimes, being small presents even a customer service advantage. Alaska Airlines can make its “bags in 20 minutes” guarantee because its smaller footprint may allow the airline to more easily manage the plane unloading process, McGregor contends.
From Ace’s standpoint, its size is the company’s advantage. In a twist on an old phrase, “size matters.”
Why Ace Won
“We’re humbled by it,” says Craig Parmerlee, Ace’s director of business development. “It’s easy to look at the big players from an arm’s length because we’re usually not in the discussion. I’ve grown a lot in my admiration for Enterprise (seven-year champs) in the last 24 hours. I don’t know how you’d do what we do and scale it up to their size and still maintain the satisfaction level that they have.”
“The gap between executive management and the service agent in the wash bay is small in a company of our size,” Parmerlee says.
Dick Radzis, president, says he’s out of his office and down at the counter “several times a day.”[PAGEBREAK]
And with that size, Ace has a good rein on company culture, something that was impressed on Radzis during his first day on the job in 1979. “My uncle (Bob Sorenson, the company’s founder) sat me down and put a rental agreement in front of me and told me to read both sides. I did, and wrote down about 80 questions for him. He set the questions aside and said, ‘Take care of the customer and everything will take care of itself.’”
“It starts with hiring the right people,” Radzis says, adding that the company has many employees with more than 20 years of service. “When a new employee comes in, they look at the behavior of the existing employees. They decide they’re going to fit in, or we decide they’re going to leave.”
Parmerlee also points to consistent, well-documented policies. “There’s a tendency to want to ad-lib to make exceptions for customers,” he says. “Once you start to do that, it becomes really hard to treat customers consistently and maintain a consistent customer satisfaction.”
In the Reservation Process category, Parmerlee believes Ace got high marks because of transparency. “We work really hard to provide as much information upfront as we can,” Parmerlee says. For instance, Ace’s website lists all its coverages with accurate descriptions, limitations and costs. If there is a $1,000 deductible, it’s highlighted in bold and red. “That may cost us reservations,” Parmerlee says, “but we provide good disclosure and the best information in front of customers so their very first experience is a positive one.”
Parmerlee says the company updates its Facebook page daily with points of interest on the travel industry or about cars. The Friday posts are strictly reserved for customer testimonials, and overwhelmingly, Parmerlee says, those posts get the most “likes” and comments.
Ace also scored high on the Rental Car category, perhaps surprisingly as a value brand. The company claims its average mileage, however, is not significantly different than the premium brands such as Hertz. This is where expectations of the premium brands may come into play. “People are pleasantly surprised to have a value price and a fresh car,” Parmerlee says.
Indeed, the consensus of the Ace qualitative responses in the survey is that customers “are pleased with what they’re getting for what they’re paying,” according to McGregor.
How did Ace win the Shuttle Bus/Van category? Shuttle bus situations vary greatly, Radzis says. In Minneapolis, Ace is in terminal but offsite, and so it is the only company that runs a shuttle. With a well groomed, polite shuttle driver, Parmerlee says that perhaps that extra time Ace has with the customer plays to their advantage. As well, Ace is particular about maintaining short shuttle intervals.
Ace is made up of 12 corporate stores and the rest are affiliates. Some of the larger affiliates serve airports and were included in the survey. Can a separately owned affiliate location be included in Ace’s survey responses?
Ace maintains that from a from a brand management standpoint, the affiliates are covered by all the same systems — the same service agreement, pricing, obligations and benefits — as its corporate locations. According to the company, there is a single point of contact for all partner relations, and Ace pays all the commissions for every affiliate location for online travel portals such as Orbitz.
“We treat all the complaints exactly the same, it doesn’t matter where they come from,” Parmerlee says. “We survey all the sites the same way. We (Ace management) act on whatever comes out of a survey; we open a case and run it down. We’re accountable for everything that’s booked under the Ace name.”
Going back to the quote that Radzis heard on day one — “Above all else, service to the customer takes care of everything else;” it’s been emblazoned on a plaque that sits on the wall at most Ace offices — commemorated upon Bob Sorenson’s death in 1995. “He lived that mantra up until that point,” Parmerlee says. “It’s our way of keeping it alive.”