Car rental subscriptions can build customer loyalty
Even in a pandemic, subscription option offers more transparency and removes rate guesswork
Back in 2019, when the car rental industry was coming to terms with the emergence of the ride-sharing market, a few major players started experimenting with ways to provide more customer service options and garner more client loyalty. Improving their apps to cut down on maintenance costs and speed up delivery was a pretty effective option, but one measure that seemed to reap dividends was in introducing car rental subscriptions.
First out of the gate that year in April was Enterprise, which created a subscription program after consumer studies conducted by the company indicated their base wanted greater flexibility in long-term rental options. Less than two months later, Hertz followed suit with a two-tiered subscription package. And while the rest of the corporate pack has been mulling over going the subscription route, smaller companies have since jumped on the bandwagon, one of the most novel being Canoo, which introduced the option for its totally electric fleet that fall.
The success of these ventures seems premature at the moment, given how COVID-19 has affected the economy in such a way that drilling down subscription performance is a needle-in-a-haystack proposition at best. But there seems to be enough promise to entice Sixt, one of the smaller conglomerates in the car rental business to throw its hat into the proverbial ring.
In September, Sixt introduced a multi-tier monthly subscription offering that ranges in models and prices from a Kia Rio for $459 to a Chevrolet suburban van for $979. Ironically, the coronavirus played a part in the rollout, since the company’s U.S. division reasoned that customers could either stay at home and wait out the pandemic or look for flexible options to rent a vehicle when they really need one, especially a rental that’s been disinfected and properly maintained for consumer use.
Flexibility is the key factor
Making options available is one hook in a subscription’s favor. Others include the ability to swap cars for free while staying in the same tier. Subscriptions include additional perks from roadside assistance to more extensive damage and liability protection. Thanks to cloud-based technology, companies can also gather enough data to recognize and meet the specific needs of a regular client.
Sixt is taking the subscription route to another level, however, by offering greater transparency to the customer when it comes to rates and additional costs. They’ve realized that when customers see an advertisement for a rental car rate, they’ll assume that’s a price set in stone. Subscriptions can offer a rate flexibility into its infrastructure as well as fully inform the customer about other costs from insurance to taxes.
Since subscriptions are more technology-based, there’s less labor involved in the transaction, which results in savings that can increase over time if the rental is long-term. And since cost is one variable that can help build a client base, it’s one element that can boost loyalty as well.
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