Chapter 2: Visualise the relevant indicators of performance

Imagine: you are sitting on a gold mine, which could make your fortune. To extract this gold efficiently and safely, you need the right tools and processes. Your gold mine is your data. And you need to make the most of it. With proven processes, you can get a clear, fast, indisputable and shared view of your data, and thus effectively manage your business. How do you build this solid foundation? The answer in 3 points.

1 - Use the most relevant indicators in your car rental context

What indicators do you use? Do they give you a clear view of your business? Do they help you in your decision-making?

‍

On one hand, like many of your colleagues who do not apply yield management, you may be managing your business on the basis of the results obtained at the end of the month, particularly the amounts invoiced. In doing so, you do not take into account the date of reservation or the days the vehicle is used. For example, a rental from 28 August to 2 September is counted 100% in September. However, the reservation was made in August and the vehicle was also used in August. How then can you obtain a fair usage rate and average price?

‍

On the other hand, when you look at your booking list, you see the amount of your transactions. But are you able to compare the quality of your turnover over two equivalent periods to see if you are ahead or behind?

‍

Our years of experience working with car rental companies have enabled us to define 21 indicators adapted to business management. Their level of detail depends on the level of information available. We have divided them into 3 families.

‍

1. The first family includes the essential indicators: your activity portfolio, i.e. your rental contracts and future reservations; the quality of this portfolio, established according to the average price applied; your utilisation rate and, finally, your price positioning on the market. The idea is to know exactly where you stand at a given moment, whether your competitors' prices have changed, whether your positioning is consistent with your tactics or not, whether you are satisfied with your level of activity and your price quality or whether you need to adjust your rates. At the same time, make sure that your prices remain consistent with your market.
   ‍
2. The second family includes leading indicators: your basic turnover (time and mileage, surcharges and compulsory insurance) versus your total turnover (which includes all additional sales), revenue per available vehicle and total revenue per vehicle.
   ‍
3. The third family includes expert indicators such as the comparative analysis between booked and conducted volume (to identify sources of offered upgrades), the price vs. volume performance indicator and the in-depth analysis of cancellations.

‍

With this complete toolbox, you are as efficient as a craftsman who can instantly find all the tools he needs. For every question you have, you have the indicator to answer it.

‍

2 - Have the right level of reading of your yield management indicators

Having the right indicators is good. Having a good reading of them is better! For example, you want to know where your activity stands on Friday 22 October 2021. Do you think it is comparable to that of 22 October 2020 (leaving aside the health crisis)? Not sure, because in 2020, 22 October was a Thursday. It will therefore be more appropriate to observe the equivalent Friday, i.e. 23 October. Looking at your data by year, quarter or month can be useful for statistical purposes. But for steering, it is the day that is relevant. Moreover, it is essential to choose the right date to make comparisons. That's why, by default, WeYield apps automatically synchronise data by equivalent day.

‍

The calendar structure is a crucial element in analysing your business. This year's May is not necessarily comparable to the previous year's May. For example, if public holidays fall during the spring break, they will not generate additional business. It is therefore essential to be fully aware of your calendar of events and key dates.

‍

Finally, having the right reading level also means knowing whether you are ahead or behind. When you look at the listings in your information system, you see the number of bookings and the channel from which they came. But you may not be able to identify whether you are behind or ahead of the previous year. You may not have an idea of the booking rate and the potential evolution: can you catch up? Are you in danger of losing your lead? If you are ahead and the pace continues to be strong, will you have enough fleet to meet your bookings without risking downgrades, also known as free upgrades? How can you slow down or speed up bookings? WeYield's indicators, and the day-by-day approach, help you get a clear picture of your business progress.

‍

To go further, it is also necessary to project on a final situation. To do this, WeYield offers two projection calculations: the estimate and the algorithmic forecast.

‍

The estimate calculation allows you to anticipate the result you can achieve if you continue at the same pace, based on what you have in your portfolio today. This shows you the impact of your current situation on your future activity and reduces your uncertainty.

‍

For advanced clients (with at least two years of history and a minimum fleet of 500 vehicles), we offer an algorithmic forecasting system, based on artificial intelligence. It allows us to give you fine-grained short-term trends on the activity. You can project yourself into the future and decide on your various optimisation actions (stop sell, vehicle transfer, price modification).

‍

3- Get reliable, enlightening and shared car rental data in real time

You have probably experienced this situation: around the meeting table, the sales manager, the operations manager and the financial manager discuss a situation. But for the same data, they each have a different indicator or different totals depending on the source and the method of calculation used by each. In the end, they may spend more time agreeing on the indicator than looking for solutions.

‍

With the WeYield app, your indicators are 100% consistent regardless of the angle taken for the analysis: operations, fleet, customers. They are reliable because they are checked every night by an automated control tool, the Checker. You can have complete confidence in your data because it is analysed and processed before being integrated. Those that cannot be integrated are rejected and displayed for correction. You can therefore check for any input errors.

‍

Automatically refreshed, your indicators are available at any time. All key people in your company can access them from anywhere. No need to read reports line by line or figures cell by cell. Our graphical presentation gives you an attractive overview.

‍

At the end of this 2nd step of your transformation, you have an instant and clear view of your current situation and you can anticipate your future situation. You can then move on to step 3: being alerted, detecting and interpreting deviations with little effort.

‍

To be continued in our next article!