Avis Budget: ‘Technology makes our customers’ lives easier’

Three managing directors in as many years is not generally a recipe for consistency and coherence.

However, such is the rapid pace of change at rental giant Avis’s global business that growth and promotions have resulted in a brisk turnover of senior management in the UK.
Kay Ceille lasted just under two years, before being promoted to president of Avis’s car share subsidiary Zipcar, while her successor Mark Servodidio was in situ for 15 months before taking up the newly created role of Avis managing director, Europe. He is now president for the international region.

The appointment of Nina Bell in May as managing director of the Avis Budget northern region (UK, Norway, Sweden and Denmark) at least afforded some continuity: she joined Avis in 1997 and did 10 years in revenue analysis, financial planning and business development, before leaving for a global strategy role in the airline industry. She rejoined in 2012, when the American business acquired Avis Europe, as group strategy director for the EMEA region.

Since taking up her current role, Bell has been wrestling with the age-old issue of making margins in a cut-throat, price-driven market. Perversely, it is, she says, one of the attractions of the rental business.

“I love car rental – it’s fascinating,” she says. “We are constantly moving through the price, supply and demand chain equation with a different challenge every day. Pricing is moving all the time and that’s the ultimate regarding the margin in rental: to get that equation working for you.”

Avis operates from 120 UK locations, with revenues of £160 million. And that’s where the stats dry up. Like most rental companies, it is reluctant to reveal fleet size or the division of business between private, fleet/leasing and insurance.

However, Bell does admit that she wants to achieve a better balanced portfolio after the company edged away from insurance and leasing to retail during Ceille’s leadership, due to the poor profitability of key accounts at the time. 

“We don’t want to be exposed to any one ,” Bell explains.

It’s one of the reasons Avis launched its van rental division this year – Bell had been working on the proposition with Servodidio while she was in the strategic role.

“We have lots of tenders from corporate customers for car and van rental,” Bell says. “Some fleets were looking for a one-stop shop, although some split into lots, especially in the public sector – so we could still go with cars. But it’s better to have vans as well, especially as it’s a growing market.”

All outlets offer vans, although Bell recognises that Avis will need to look at the size of its network, and of some individual outlets, in order to accommodate a widening range of vehicles.

A deal with Tesco at six of its sites (with another to come soon) has provided one solution. The supermarket chain had unused space in its car parks, which Avis is now using to keep some vehicles.

The broader portfolio of vehicles to rent will help deliver Bell’s strategy of growth in the fleet and leasing sector. Also core is an understanding of the importance of delivering outstanding customer service and the role of technology in helping to reduce cost and improve the range of services.

Avis has embarked upon a major training programme with its outlets based on a project first carried out in America. It puts the emphasis on resolving issues at the outlet by empowering staff and teaching them about customer interaction. One objective is to create consistency throughout the network. 

Customer scores have risen typically by around 35%, although Bell declines to provide before and after figures.

However, she says one outcome of the training is to ensure staff are able to provide a clear explanation to fleets about Avis’s charging structure, product availability and customer qualification to ensure the right cars and vans are offered. “One of the issues is price transparency,” she says.

Charges are explained again during the check-in process, an area where Avis is seeking to reduce queuing times by introducing tablets for customers to provide the information required before they get to the desk. “We have pods in the stations and we also have someone going up and down queues to get information from customers,” says Bell.

Technology is helping Avis to more effectively manage its collection and delivery process via Wizzmap, a new system currently under development. 

“On-time collection and delivery is a big challenge,” says Bell. “It also improves our accuracy for billing for collection and delivery and for fuel. We have flexible pricing on contracts that vary from customer to customer.”

Investment in technology will enable staff at Avis outlets to take images of any damage so the customer can understand what charges will be added to the bill – ensuring there no unpleasant surprises when the bill arrives at the company, according to Bell. This is due to be launched in the first quarter of 2016.

Next year will be a significant one for technology. Avis is already investigating how some of the initiatives developed by subsidiary Zipcar could be transferred to its own business, although there are complications due to the much wider range of makes and models on its fleet.

That said, the area of the connected car opens up a host of possibilities, such as devices in the diagnostics port to provide access via a smartphone app. 

Avis has carried out a trial with Peugeot (not in the UK), but Bell notes that the lack of commonality across different manufacturers makes it difficult to develop one platform.
However, she adds: “This is an innovation that will transform rental – mobile-enabled processes for customers from booking to access of the car and more choice on makes and models. It also changes operational things for us; when we deliver a car we lose visibility of it. We will now know how it is being used. It also improves the accuracy of fuel usage and gives us data for preventative maintenance.”

The issue of data and data protection was discussed at Avis’s inaugural customer advisory board earlier this year. Fleet feedback underlined a reluctance to open access to data with fears over how it would be used. Ultimately, data will underpin a more complex – and efficient – way of moving people around based on integrated mobility. It will incorporate public transport, rental, car share and taxis with the best choice offered to fleets depending on the most important criteria for their business, such as cost, environment, safety and time.

“We are seeing how we play a role in this space,” Bell says.

That’s the strategic part of her talking; however, her most immediate priority comes back to ensuring that Avis has the right balance of corporate business across all the key sectors of industry. The corporate aspiration falls into two camps: fleets (SME, mid-size and large accounts) and direct contracts (leasing partners).

For the former, Avis has dedicated teams handling larger accounts, teams for the local business market and a telesales operation in Barcelona for SMEs. Bell believes there are growth opportunities in each area, but she has restructured the business to focus in particular on SME and local business, separating it from the management of airport locations.

“Local market stores are very different, especially collection and delivery,” she says. “You need a logistics skill-set to manage a local store.”

The direct contracts business is unique to the UK market; it tends not to happen in other countries. 

Avis has long-standing partnerships with leasing companies and has seen them extend their offering further into rental in recent years with more corporate fleet accounts deciding to transacti via their leasing companies. 

Both fleets and leasing companies have demanding expectations when it comes to service level agreements (SLAs).

“Where we have long-standing partnerships we have good dialogue on SLAs and the cost for both parties,” says Bell. 

She points to ‘no turn-down within a short timeframe’ and ‘collection within a short timeframe and outside of working hours’ as two common challenges.

When Fleet News interviewed Kay Ceille two years ago, she bullishly talked about Avis taking a stand against the price-cutting commonplace in the rental sector. 

“How they operate does commoditise rental, but that’s not sustainable and it goes against the grain of what Avis stands for,” Ceille said. 

Bell agrees that service and price are important, but comes at the issue from a slightly different perspective. “Leasing companies offer rental on a certain service level and they have to work with all of us to ensure we meet the SLA,” she says. 

“We have made internal adjustments to our business and how we organise ourselves regarding SLAs. It’s getting the balance across the portfolio and the scale to deliver on the SLAs and be profitable.”

So, what does Bell hope to have achieved in two years’ time? “Balance in the B2B space and continued growth regarding customer service,” she replies. “Also, greater use of technology that makes our customers’ lives easier. It’s such a dynamic marketplace – challenging, but also fun.”