Now is the time!

February 20th, 2009

I must say I am hearing great things from my customers. Rates are good, utilization is good, business is good. Then I turn on the television and I am freaked out….

I thought about something my boss told me years ago when I was selling Dodges. “If you talk to a salesman that just sold a car,  he will tell you business is great! If he has not sold a car in a while business is bad. ”

It seems funny that out of 20 phone calls to my customers….18 say business is great, 2 say it is bad.  To me that sounds normal.

I was told a story recently about a dealer that disconnected the television in the showroom and waiting room. He stopped the newspaper delivery to the store. He has a sales meeting every morning and talks to all his salesmen and rental reps before they start work. They go over the positive things that happened the day before.

Guess what. They are selling cars, renting cars and turned in the best January they EVER had…Interesting.

You know, we all have heard the saying…..”It starts at the top.”…..If you are the “TOP” ….then maybe….. Now Is The Time!…to find something positive. It really will spill down to the folks that work for you and deal with your customers. If you are the rental rep….then maybe ….Now Is The Time!…to be positive about what you do for a living.

According to the US Bureau of Statistics…”Retail sales persons held about 4.5 million jobs in 2006″, if everyone of us sold just $100.00 more every day a year from now we will have created $164.25 Billion more in sales……..The government is not going to do it…….big business is not going to do it…….we….salespeople are going to do it…..

Nothing out there is going to change unless we sell something. It is that simple. We can only get out of our slump one way… and that is to SELL something. So start today, if you cannot sell a car….sell a set of snow tires….if you can not sell a weeks rental sell just one day. If you cannot sell CDW sell an upgrade for $2.00…….Sell something!

NOW IS THE TIME!

Posted in Auto Rental, Business, Car Rental Insurance, Car rental, Entrepeneur, New Car Manufacturer, New car sales, Sales, Small Business, Uncategorized, Used car sales, auto rental franchise | No Comments »

Has the Industry Gone Nuts?

June 3rd, 2009

Chrysler Cuts, Are they nuts?
 
I just read about Chrysler cutting 789 dealers. How many cars and trucks does Chrysler sell every year? You might be surprised by my answer…NONE. Their dealer base BUYS the cars and trucks that Chrysler makes and their dealers sell them to the public. If those 789 dealers only sold 100 cars a year each that is 78,900 new cars!
 
It seems that the whole industry is going Bonkers! The business of selling cars is a one on one business. Every car is sold one at a time, toe-to-toe, belly-to-belly, in other words a business of incremental sales. Sure there is the fact that a company or government or even the military may purchase several hundred or even several thousand cars, but in order to garner that sale the per sale profit does not warrant many of the sales. Proof in that is when the manufacturer decided not to sell to the rental car companies because of the low prices.
 
Therefore, the folks in charge think that the solution to profitability is to eliminate the sales end of their industry. Get rid of 789 dealers and put about 40,000 sales, service and support people out of work at those dealerships, what the heck, no one likes car salesmen anyway. Good idea people, that ought to help sell more cars.
 
I think the solution to their problem is to sell more cars. Take more people out on a test drive, stop trying to do business on the internet, let the customer inhale the new car smell, they just might buy one. If the dealerships sell more cars, they might buy more from Chrysler and Chrysler might make more profits, but what do I know, I am just a simple salesman.

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Wake Up Your Business Model

January 15th, 2009

It does not seem like that long ago several of us were amazed that the 1976 Dodges were in the showroom and there was no way we were going to sell anymore cars. Prices just went up another $350.00 across the board; gasoline was now 55 cents a gallon.  

 

That new 48 month financing, people were going to only buy a car every 4 years, which would take away 25% of our customers because they would now have to make payments a whole extra year. Unanimously we decided that going to work for the post office was a better idea than selling cars.

 

Funny, 33 years later gasoline hit $4.50 a gallon this past summer and that $4500.00 Dodge, now sells for $28 grand. People are still selling cars. Life goes on and so does business.

 

The big revelation is that in 1976 we had a certain way of doing things and as the business climate changed we had to adapt. We had to change the way we did things. Business would never be done the way it was. Those that tried to continue the old “traditional ways” did not survive. They were the first to fall.

 

Now some of you remember those days in 1976 in the rental business, the way you did business then. You know that you can not operate that way anymore, not if you want to survive. Many of you were not even born in 1976, well history has a way of repeating it self. The lessons learned then need to be applied to today, yet we continue to do business the way we did!

 

We buy our cars the same, we sell our cars the same, we finance the same and we end up in the same place at the end of the year.  Our industry continues to work on tight margins, and we sell price, price, and price. We continue to put rental agents on the counter that are untrained clerks and expect them to perform rental miracles and blame them when we have a bad month. We do this year in and year out and we are surprised that we come up with the same result.

 

Make 2009 the year of awakening for your business model.

 

Have you looked at how your company does business?

            Are you getting the most out of every rental day?

            Are you turning away rentals because your policies are outdated?

           Are you losing sold days because your business is focused in the wrong way?

 

Look at how you are buying and disposing of your inventory?

            Are you buying the right stuff?

            Are you getting the best price when you dispose of it?

            Is your exit strategy for each car thought out and planned?

 

How good are your employees?

            Are you training them properly?

            Are you giving them the tools to succeed?

            Are you teaching them the value of a rental day?

             

Doing business the way you always have and coming up with the same result has to end somewhere. The decision to adapt is up to you!

Posted in Auto Rental, Business, Car Rental Insurance, Car rental, Entrepeneur, New Car Manufacturer, New car sales, Sales, Small Business, Uncategorized, Used car sales, auto rental franchise | No Comments »

Real Rental Car Rates

December 16th, 2008

Maybe I just don’t get it. I can not think of another industry that is so intent on destroying itself other than the rental car industry.

I found an advertisement from 1973….for a Chevrolet Impala for $75.00 a week with unlimited miles in FL. Now that was obviously a “special price” because it was advertised.

In 1973 an Impala sold for about $4000.00 to day an impala sells for about $25,000 or about 6.25 times more than in 1973. So, one could assume that the “special price” today should be about $470.00 a week. Nope, I found one today in Florida for $222.00 for the second week in January.

When business gets soft what does the industry do? It lowers the rates. I know market share and all that, but why when there are fewer customers out there does the industry sell its rental days for less money.

The cumulative result is everyone rents fewer cars for less money per day. What is wrong with this picture? It has been explained to me by people much smarter than me, but I still don’t get it.

With most consumer goods, lowering the price actually can stimulate more sales. A customer may not consider buying potatoes today, but if the grocer lowers the price of potatoes, the customer might be enticed to buy.

Rental car customers rent cars because they need one for a particular date, time and purpose. I do not know of one instance where a guy called his wife on the phone and said, “Honey, I rented a car because they lowered the price $4.00 a day.”

Talking about market share, if there are a lot of customers out there shouldn’t that be reason to reduce rate and capture the most possible customers? Again, when I brought that up everyone around me laughed….until they thought about it.

I’m not advocating a radical change in thinking, but I am suggesting that it might be time to rethink what the price strategy is. 2009 is right around the corner. Is there a bold leader out there that wants “Real” Rental Car Rates?

Agree or disagree…..let me know

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The Big Three and Their Money Problems

November 19th, 2008

I’m confused. The manufacturers are all in trouble and the proposed solution, as always…. throw money at it. If that never worked in the past why is it going to work now? Bridge loans, Bailouts, Grants, More tax breaks…….goodness where does it end.

The government even suggested that there be a tax rebate to get customers to buy. Rebates have been around for years, it is to the point that consumers do not buy a car until there is a rebate. For crying out loud, the 2009 Toyota Camry, the self proclaimed industry standard, has just been released and there is already a $1000.00 rebate on the darn thing.

Here is a novel idea, how about building a car that everyone wants…..wants right now….and can afford……If I am not mistaken that is how Ford started out. You might have heard of the Model T. There are many other success stories. The Mustang, back in the ‘60’s, right up to the Prius today…..people wait in line, sometimes for months to get one. Let us not forget that they are paying over sticker for the privilege to buy one.

How about General Motors getting back to the original marketing plan that made them who they were. There was a time that General Motors owned their customers allegiance from the first time they bought a new car. You started with a Chevrolet when you were young and as you became more successful you moved to a Pontiac. As you became more sophisticated the next move was to an Olds or if you were really doing well, a Buick or a LaSalle. Then you finally arrived and you got your Cadillac. That was the progression that kept General Motors customers coming back. In recent years you cannot tell a Buick from a Pontiac from Chevrolet and the Cadillac shares parts with them all. Forget the Olds and the LaSalle, they stopped making them. Why did they stop doing what was working?

Let’s not forget Chrysler. You started out with a Plymouth, moved to a Dodge and then to a Chrysler, not to mention an Imperial. The Plymouth is gone and so is the Imperial. Ford went to Mercury then Lincoln and now when you put a Crown Victoria, a Grand Marquis and a Town Car next to each other you have to really look to see which is which.

Maybe, the fact that new car dealerships have become a “kinder gentler” place, instead of doing what they are supposed to do, sell somebody, has something to do with it. Today there are new car stores that do not even have sales people. The customer is allowed to roam around the lot alone, the non negotiable price is written on the window and they pick the one they want. They buy…..they are not sold. The dealership experience is like going to Wal-Mart for dog food.

I have a solution…..sell something! People may not admit it but they want to be sold. They need to answer the question their neighbor is going to ask….”Why did you buy that car?” At one time the answer was “I got a great deal” or “I out smarted the salesman” or heaven forbid “I met a really good salesman”!

Agree or disagree, I believe that if the government wants to throw $25 Billion at the auto makers and they are willing to take it, they should go under.

Imagine if at least one of those CEO’s would have said “No, I don’t want the bailout. I want to sell you $25 Billion dollars worth of cars” Now that’s a salesman.

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Yeah, It’s Gonna Get Tough!

October 13th, 2008

You can not avoid it! You turn on the TV, Radio, the computer, it is everywhere.

Doom, gloom, the sky is falling mentality is everywhere. Or is it?

I talked to Chris Rice from Argo Development, the folks that bring you the software products for the rental car industry, and he tells me that the number of reservation requests coming through Argo’s servers has not changed. Maybe the casual renter has stopped renting retail, but the insurance replacement business is still going strong.

Chris told me, “…in September we did 8665 rentals through the ICO system up almost 150 from August. The insurance replacement business is and has always been steady.” Chris has the Insurance Connection Online so you can connect directly to the State Farm Insurance Company.

The business is out there!

You just need to go and get it.

Agree or disagree…..let me know!

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Should I Buy Rental Car Coverage?

August 28th, 2008

Hi, Jim Schalberg here,

I Googled that question and got 3, 890,000 replies…..no I did not read them all. The few that I did read are not quite on the mark. They are all advice to check on this or check on that and frankly not many people really do. With so many opinions there obviously is no simple yes or no answer.

I have been around the rental car industry for over 30 years and still maintain the same opinion. Collision Damage Waiver or one of it’s many cousins (LDW,PDW, etc) is a bargain and I say if you are a casual renter that rents once and a while…buy it!

Now I know there are many of you out there that just spit your coffee all over the screen to keep from choking, but I am not kidding. Let’s do the math.

If you are like most folks you have a late model car with collision and a deductible of $500 or $1000. If you check with your insurance company and ask them if your insurance transfers they will probably say yes.

The average rental in the US is around 4.5 days in the US.

Assume the CDW offered by the rental car company is $25.00 a day.

Your CDW for that 4.5 day rental rounded up to 5 days will cost $125.00.

If you back into a pole at your favorite fast food restaraunt and do $600.00 damage you walk away and it only cost you $125.00 for the CDW. Not to mention the accident does not get recorded at your insurance company and your rates are not effected.

If you rely on your insurance company you have to pay the $500 out of your pocket and you get dinged by your insurance premium because they had to pay the other $100. I know that you feel you wasted the $125.00 if you did not have an accident…..but did you waste your flood insurance on your house if there is no flood?

Ok, I can already hear some of you say, …..but my Gold Card…..Well, many Gold Cards are Gold because that was the color they chose. Other Gold Cards are secondary and pay only after your insurance company will not……Funny thing is if you call the 800 number on the back twice you will sometimes get conflicting answers.

Sorry, still no hard fast advice for you, but in my world cash is King and to my way of thinking……spending $125.00 once or twice a year is still less money than a one time $500.00 deductible.

Oh, I said I was in the business……Yes, and I do buy CDW… especially if the agent sells it to me properly!

 

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