Fleet News Award winner: Best Short-term Rental Company - Europcar

A combination of cost-saving initiatives, new products and a keen focus on customer service has been instrumental to Europcar’s winning success during 2012.

With 60 of its stations now open seven days a week, a new loyalty scheme, e-Ready, and a new short-term leasing scheme imminent, Europcar has been working hard to separate itself from the competition and strive towards repeat business, which managing director Ken McCall believes is crucial for future growth.

“This is a tough industry and very competitive – you’ve got to focus on repeat customers to do well,” says McCall.

The rental industry has had a difficult few years during the recession, with a number of companies going into administration or being taken over.

Despite the economic challenges, McCall is confident there is growth in the rental industry and Europcar has set itself some aggressive targets for the next few years.

The company’s commitment to customer service was one of the standout features of the Europcar award submission which led to it winning Best Short-Term Rental Company in March.

Europcar believes keeping the customer close to the heart of the business not only helps to keep introducing initiatives that can be more tailored to customer needs but also keeps McCall and his team on their toes.

Fleet News: Quality of service plays a key role in your future growth aspirations – what initiatives have you introduced to bring you closer to the customer?

Ken McCall: There is no one silver bullet solution – we are doing a range of things to encourage and improve overall performance. One of the most important is speaking to the customer.

One of our targets is to convert 80% of current customers into repeat customers, which is a critical target for us.

The rental industry is not growing hugely and it is really important to be able to generate repeat business. So customers are being called and asked to rate the service they received from us out of 10.

All the phone calls are made by staff, including all of our management team and me. We are given five customers to call each week.

It keeps your feet on the ground because people are telling you real things, you’re getting real-life criticism and ideas for new products or services.

You get some fantastic feedback, plus more engagement from your staff, and we show the customers that we care.

We have set ourselves a three-year plan to reach the 80% target – we’re currently running around 67%.

It’s the little things that make the difference and it’s this level of detail that will hopefully get us closer to our target.
 

FN: Europcar made big strides last year in reducing CO2 emissions – will 2012 be as successful?

KM: We’ve been stepping down each year for the past few years now. We started the beginning of 2011 at 144g/km and are currently tracking at 137g/km – we are expecting to finish the year around this level.

This reduction has been achieved through a combination of good fleet buying, customers managing benefit in kind and new technology on the market.

The environment plays a fundamental part in how we do business and I can see our CO2 emissions continuing to fall.

The challenge will be how much the fleet market progresses in the take- up of greener vehicles.

FN: You were one of the first rental companies to introduce electric vehicles – how has the take-up been?

KM: Demand is very low. Electric vehicles make up a very small part of our fleet business. Right now, everyone is managing cost and because of that, cost reduction is more important to some companies then being seen to be greener.

The balancing of infrastructure and making it easy for people to run electric vehicles needs to be in place – until it is, there will be a real challenge.

There has been progress but it is the economy that primarily makes the uptake limited.

People are focused on cost savings – having electric vehicles as a big part of your fleet is a cost that companies are not prepared to pay.

FN: Do you see cost reduction continuing to play as important a role for many customers?

KM: The economic circumstances are very difficult, though it depends which segment you are working in.

Some companies are currently doing very well. Our consumer van business, for example, is up more than 40% this year and our prestige fleet is doing better than ever.

Pockets and trends of the market are doing better than others. Cost reduction has been a key focus for the past few years now and I don’t see it changing.

FN: What do you foresee as your key challenges in 2013?

KM: I think the UK has very different dynamics to the rest of Europe. The price of car rental in Germany is double what we pay here in the UK, which is far too low, and rental companies need to put their prices up.

The UK also seems to be one of the fastest growing for fraudulent claims, especially when you look at whiplash, which is probably not helped by the current economic climate.
 

That is a huge cost pressure for the industry and something the Government is starting to look at.

Technology also needs to be improved.

What I want to see is accurate fuel tank technology which shows how much percentage of the fuel tank is left or technology that finds out how many people are in the car.

That way, you can determine false whiplash claims, which are costing the insurance industry millions.

FN: Do you see your new short-term leasing option opening up a new group of corporate customers?

KM: I’m not sure it will appeal to larger corporate customers but I could see it working for small B2B customers and independent car renters, as well as some retail customers.

I think it will attract a whole raft of customers all with different requirements. The programme is imminent for launch and I’m very excited about it.

FN: Some manufacturers have been moving out of rental – are you finding that a challenge?

KM: We have around 26 different manufacturers we deal with so we haven’t really been impacted by this.

Our relationships with manufacturers are very strong. Tactically, manufacturers from time to time will opt to come out of rental, others may decide to join – I am sure it will fluctuate through the years.

As well as overall growth in the fleet sector, McCall is keen to focus on Europcar’s van rental operation.

After seeing substantial growth in the consumer van business, he sees real potential for the fleet industry – in particular, the SME market.

Although he is reluctant to set a number against it, McCall believes van rental will become a more integral part of Europcar’s business moving forwards.

After only 18 months as managing director, McCall looks set to push his team even further and hopes that, if Europcar achieves all their targets for 2012, a consecutive award from Fleet News may be in tow.

“Winning more awards is an obvious aspiration. It recognises staff performance and engagement, and also gives an outsider’s view about how good you are.”