Avis Europe

Source: Retail Digital

Date :31/08/2007 06:19:31

Reversing a downward spiral in just two years

Avis originated in Detroit, where its founder Warren Avis set up the world’s first ever airport-based car rental agency at Willow Run airport in 1946. It was an idea that came to the former pilot when he was unable to find ground transportation at airports. Warren Avis died at his Michigan home in April 2007, aged 92. The European division was founded in 1965. However, in recent years the company had been hit by rising costs, multiplying competition and a dwindling market, so two years ago it embarked on a restructuring and refocusing exercise

Written by Alison Withers & Produced by Kiron Chavda

Daniel McCarthy, 36, was one of the turnaround team brought in to accomplish this restructuring. Born and raised in Malta, he came to the UK to study engineering at university and then worked in marketing for Procter and Gamble. Following five years in New Zealand, McCarthy joined Avis UK in 2005.

The emphasis is on human beings

UK Commercial Director McCarthy is a member of both the UK Avis board and of the European commercial board, which determines the sales and marketing strategy for the European market. He says the company was badly hit by the 9/11attack in New York. The subsequent decline in tourism understandably hit a company based around airports particularly hard. A growth in online car rental brokers did not help and “revenue and profits started going backwards”.

Restructuring one of the largest global rental companies began with a shift of focus towards retail and the customer. The new board of directors first of all engaged the services of retail experts and did a huge market research exercise involving 13,000 customers across Europe.

Armed with the results, it was, McCarthy says: “back to the drawing board” and the first step was an investment, “in the millions”, in IT. This involved restructuring the website, which was particularly important in the UK, where McCarthy says online shopping is significantly ahead of the rest of the world, with the exception of the USA. A key feature of the new site was the introduction of a shopping basket to enable customers to make multiple purchases in one go, where previously they would have had to complete individual forms. This is particularly useful for people planning holidays linking car rental to flights, destination, then possibly again on return. The website will be continually improved now that the company has a “very experienced retail web development team”.

Equally importantly, Avis has retained the human touch. “We recognise there are people who want to discuss their particular needs with a human being,” says McCarthy. Avis now has a reservation call centre in Barcelona with a particular emphasis on recruiting English speakers, and, something that will please everyone who has run the gamut of those irritating multiple choice automated messages, which then lead to another and possibly a queue before the caller actually connects with a real human being. The Avis call centre, says McCarthy with some pride, has just one answering message with a choice of just four options: “The general policy is that there should be no barriers between us and the customer. We always want to be available to the customer. We want human beings to deal with human beings.”

This of course led to the third major strand of the turnaround strategy –simplified rental forms which were deconstructed and re-designed to be more user friendly with only the minimum and legally-required small print, and all prices quoted including VAT. That also meant installing new IT in many of the UK’s 122 rental locations and an ongoing focus on staff training, review and continued improvement.

McCarthy says there’s a big emphasis on “family” at Avis, where it’s quite usual for staff to become very modest about their individual achievements and to be focused on their team. It’s been a particular satisfaction that staff have twice voted the company into the Times Top 100 Companies to Work For. Having a flexible policy that meets staff needs means that retired people can work for the company a couple of days a week as drivers if they want, mums can work at certain periods of the year so they can meet family and childcare responsibilities and some staff can work partly from home and partly from the office. There’s a well-established mechanism for spotting and developing talent, which, says McCarthy the company would prefer always to grow from within.

The business customer and the airport market have not been forgotten either and improved rental facilities have been rolled out at all UK airports, from Heathrow and Gatwick to Exeter and Belfast. Avis has introduced a rapid return service at its airports. McCarthy explains: “When you drive up to the airport there’s someone waiting to scan a bar code on the car and give the customer all the details of the rental agreement with a receipt on the spot. It gets people onto planes quicker and gives them peace of mind – no worrying about what companies are going to do with your credit card details in your absence.”

Next Steps

The big question is did the turnaround strategy work? “Last year was the first year we stopped the decline in profit and started growing after five years. Our rRevenue has grown ahead of the market, which means we’re winning share in a mature market,” answers McCarthy.

While the emphasis will always be on continuous improvement, for now the huge changes of the last two years will be consolidated. Staff development will continue and the focus will be on new products and services for consumers.

This April Avis launched its “Select Series” at its major airport locations plus its Mayfair, central London, location, where for a slightly higher rental, customers can be guaranteed a VW or an Audi equipped with free satellite navigation. Introduced in response to customer feedback, Avis plans to expand the Select Series. They also launched Avis GPS, their customised Satellite Navigation system with multi-language capabilities to cater for international as well as domestic customers. This has proven very popular since its launch and Avis are proud to be able to offer the exact same product across Europe.

In view of rising concern about the consequences of global warming and carbon dioxide emissions, the company will be looking to buy more fuel efficient cars, but that is limited by manufacturers’ ability and willingness to sell them into the car rental market. In the meantime, he says, they’re trying to get the message across to business users particularly that it’s environmentally friendlier to rent its new cars, which will have lower emissions than might be the case with the owner’s possibly older cars. A scheme already introduced but likely to be further developed is giving customers the option of paying to carbon offset their journey. The company’s own facilities have been carbon neutral since 1999 and McCarthy says there was a 50 percent increase in take up of the carbon offsetting option in 2005-06, which has increased by another 25 percent so far this year.