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How effective customer segmentation in car rental can create a positive buying experience

Posted on: 18 September '17
Anirban Mukherjee
Anirban Mukherjee
Senior Consultant, Digital Services

Further to my blog What is wrong with Car rental services today, I intend to discuss how to undertake effective customer segmentation in car rental to create a positive buying experience.

For any organisation looking to create a positive customer experience in car rental, the first step is to understand what their prospective customers are looking for and how well their service expectations can be met. In case of car rental services, prospective customers are more likely to be looking for a mobility solution for an upcoming trip of which car rental is an important component. In order to ensure they offer the right service/solution to the prospective customer, Car Rental providers need to consider the following aspects as detailed below.

Understanding Customers in car rental

Even before recommending a service/solution to a prospective customer, it is important to understand both his demographic profile and ‘Job to be done’. This is because different profiles and requirements would entail different kinds of engagement. For example, the need of a Business traveller would be very different from a leisure/family traveller. Consequently, the nature of the engagement would have to be different too.

Customer segmentation in car rental

Car rental providers need to first identify the types of customers who need to be served. To do this, they need to consider their existing customer records (structured and unstructured) including online and offline customer feedback. Once they have identified the customer types, they need to create Buyer Personas using advanced analytics techniques. Then, depending on the ‘Job to be done’ for the persona, the most effective engagement/service model and marketing plan should be put in place.

Once this is done, all new customers must be segmented based on the persona that best fits their profile in terms of common traits. Appropriate segmentation is a key step in the service process as 70% of the buying experience is based on whether the customer feels his requirement has been understood and the right service/solution proposed.

Positioning Car Rental services as a Travel Companion

Instead of providing just car rental services, car rental providers can elevate their position in the ecosystem by becoming a true Travel companion. They can emulate an Online Travel Agency (OTA) model and offer all mobility solutions through a single platform. For example, they can offer Hotel accommodation, flight tickets or alternative modes of transportation under one roof. All these services can be offered proactively on a real-time basis, based on the customer’s location mapped through a Mobile app.

Car rental providers usually have a large partner base. Using this relationship, they can offer better discounts and promotions to incentivise booking through their channels. Today, with the advent of API technology and service oriented architecture, integration with partners on to a single platform is also something that can be done quickly and easily. This kind of approach would make car rental providers echo the customer’s sentiment of ‘Stop Selling and Start Helping’.

Once car rental providers understand their customer and his needs, they can embark upon the next phase of the journey – engaging with the customer and converting them to paying ones.

In my next post, I will discuss Customer Engagement in Car Rental Services. Stay tuned!

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Anirban Mukherjee is a Senior Consultant at Digital Business and Consulting Group in Europe. He’s an old Mindtree hand with over 10 years experience in IT and Business Consulting. He has handled customers globally at client locations across four continents. He has on-the ground country experience of working in India, USA and Continental Europe with clients from CPG, Manufacturing, Travel and Transport verticals. His expertise is in Digital, Marketing, Branding, Strategic Consulting, Account and Program Management.