Visitor Monitoring Online Car Rental | Keynote

Online Car Rental

Thanks to renewed customer focus, savvy car rental brands are closing in on online travel agents.

Even under the best of circumstances – say, planning a ski vacation or a romantic getaway – booking a rental car online is unlikely to be the highlight of a consumer’s trip planning experience. While there’s some relish in comparing the amenities of alpine inns, booking a car is painless at best – in part because car rental companies have been slow to establish the level of usability and performance consumers have come expect from other online transactions.

But that may be changing, as indicated by recent data from Keynote Competitive Research. According to Stephen Foster, director of competitive research at Keynote, many car rental brand sites are making significant improvements in the design and efficiency of their online shopping and booking processes. “We’re looking at incremental change in a mature market. But I think overall it’s getting better…offering a much better customer experience than two or three years ago,” observes Foster. “I think every year we’re going to see a better product and a better experience consistently delivered to consumers.”

These tires need air

In 2007, there were 1.8 million rental cars in service in the U.S., the most in a decade 1Auto Rental News, 2007. Total U.S. revenue was $21.5 billion, with online bookings contributing significantly to that total. According to comScore Media Metrix, the online car rental category was the top-gaining online sector during June, 2008, a peak summer travel period. The category expanded 4 percent, to 6.5 million visitors during that month.

However, consumer belt-tightening during 2008 has taken a toll on rental car demand, as it has on most aspects of the travel industry. Air travel has become a luxury item for many consumers facing high food and fuel costs. According to a July, 2008 Forbes interview with UBS Analyst William Truelove, corporate travel is also under the knife, sapping critical commercial business from the market 2Forbes Magazine, Fuel Prices Drive Down Demand For Car Rentals July 2, 2008. As did many of its peers, Avis Budget reported modest second-quarter profits and a cautious outlook for 2008, citing steep fuel costs and tough economic conditions.

A choice of destinations

Consumers have multiple online routes for car rental. Online travel agent sites such as Expedia and Travelocity offer the ability to aggregate rate and vehicle information from a broad range of sources to make price comparisons easy. Consumers can also view information consolidated from both brand and agency sites using travel-focused shopping engines such as One of comScore’s top-gaining sites in January 2008 3comScore Media Metrix Releases Top 50 Web Rankings for January 2008, is purely a comparison shopping engine, with some ability to level the playing field among the booking sites by providing an objective view of all offers on the table.

Keynote’s Foster sees these sites as a way to defray perceptions that certain sites always have the best deals. “At these metasearch sites, you can find reassurance that you’ve got a good rate and then — through a Hertz or an Avis or a Travelocity or Expedia – actually book your car.”

Consumers can also go directly to one of the major car rental brands, all of which operate online storefronts in addition to airport and neighborhood rental locations. These brand sites offer full reservation services, access to the latest company offers and promotions, plus enrollment and log-in for popular frequent-renter membership programs such as Thrifty’s Blue Chip or Hertz’ #1 clubs.

While both the online travel agents and the brand sites have their loyalists, the Hertz.coms of the world have traditionally lagged behind aggregator sites in terms of user experience and performance levels. This is not entirely surprising, given that the online travel agents have a born-and-raised Web-only business model where every customer interaction is online, and there are no brick-and-mortar operations competing for resources and strategic focus. For the car rental brands, however, their online channel represents just one customer touchpoint among several and a somewhat smaller point on their overall operational grid.

The performance gap may be closing, however. A March, 2008 study by Keynote examined the performance of nine of the top Web destinations for booking rental cars, including both brand sites and online travel agencies Expedia, Orbitz and Travelocity. The Rental Car Reservation/Customer Experience Study enlisted 200 panelists for each site, who were asked to mimic the actions of a typical car rental consumer, performing a variety of scripted tasks over a 30-day period. Using the resulting data and panelist feedback, the sites were ranked according to customer experience measures and technical service levels. The research is part of a multiphase study conducted annually, enabling trend comparisons over time.

The overall Keynote Customer Experience Index is the highest-level score of customer experience generated by the study, based on an aggregate score of site performance across 250 customer experience metrics. The overall ranking shows which sites are most successful in terms of satisfying customers, driving acquisition, and supporting a company’s brand.

Four sites provide the best overall rental car experience for site visitors: Travelocity, Budget, Expedia and Enterprise. Significantly, Travelocity was the only aggregator to maintain its dominant position relative to the branded car rental sites. Performance from Orbitz dropped significantly, showing declines in both conversion rates and customer satisfaction. While Expedia finished in the top 40% overall, it lost significant ground from 2007. With the exceptions of Budget and Enterprise, all of the car rental companies finished in the bottom half of the rankings, with Thrifty earning the dubious last-place honors.

Perhaps the most notable movement within the rankings came from Budget led the other branded car rental sites in most customer experience rankings – moving up from fourth-and fifth-place finishes in the 2007 study – and trailed only Travelocity in overall Customer Experience and Brand Impact. The only other branded car rental site to make a showing in the top four major indices was Enterprise, which finished ahead of Budget in the Conversion Impact Index. In the more detailed driver rankings, Budget finished first in Customer Support, Reservation Process, Design & Organization, Visual Appeal, Car Description & Details, and Locate Help. More panelists, in fact, associated “helpful” with Budget than any other site.

Putting Customers in the Driver’s Seat: What Budget is Doing Right.

So what is Budget doing right? “I don’t think it’s any one big thing,” says John Peebles, vice president for online marketing at Budget. “I think it’s a thousand little things.” (Read the full interview.) For one, the company is letting consumer behavior and opinion directly drive the site refinement process.

Budget has conducted exhaustive multivariate site testing, leading to changes as major as deploying new search engine software and as granular as rewriting button text. The company has made significant investments in improving customer service content, ensuring customer queries are answered with the right information, not necessarily the most information. Budget also now provides opportunities for customer feedback throughout, leveraging that information both for holistic changes and for day-to-day bug-fix triage.

Budget is heeding customer input even when the message runs contrary to conventional marketing wisdom. For example, Peebles and his team have observed an inverse relationship between marketing intensity and conversion. In other words, the more promotional the language, the lower the conversion rate. This applies both to language on navigation buttons and to actual on-page promotional offers. High-visibility promotions can generate high click volume — impressive on an analytics report — but those clicks do not necessarily correlate to higher conversion rates. Budget continues to analyze and rearchitect its site based on user feedback and actual results, and to make incremental changes that simplify the process and get out of the customer’s way.

Technical Performance: More Than Just Speed

In addition to evaluating customer experience on a subjective level, the Keynote research assessed seven factors related to the site’s service levels:

  1. High-Speed Response
  2. Dial-up Response
  3. Response Time Consistency
  4. Geographic Uniformity
  5. Load Handling
  6. Availability
  7. Outage Hours

According to Ben Rushlo, senior consulting manager at Keynote, car rental sites and the travel sector in general lag in technical quality, page performance, and in the delivery of an error-free user experience. He attributes this to a lingering mindset that dismisses the impact of downtime. “Unlike ten or even five years ago, you can’t just assume that consumers expect poor performance and will put up with it,” says Rushlo. “Now, when you have other rental car companies that are providing above 99% uptime and you’re down at 95%? You wouldn’t run your brick and mortar shop the way.”

Rushlo does see change, however, with a number of sites focusing more on site availability. Alamo provides perhaps the best example, improving its rank for reliability and rising from last place to above-median rank in Availability and Outages over the past year. “A lamo was by far the best performer, although not actually the fastest for high-speed or dial-up on average. They’re not the Google of the industry, but they’re very consistent – so if I go to Alamo, I always know that I’m going to get a very consistent experience on the site.”

Rushlo cites Alamo’s geographic consistency and load handling as key advantages. Users know that wherever they are in the country or what time of day they visit, they can count on consistent technical performance. “This study is not about who’s the fastest. It’s about who’s the best overall in technical quality, and Alamo’s a great story there. They are third or fourth in terms of their average speed, but because they do everything else very well and they’ve really holistically captured the other elements, we would say that they’re the best site.”

Three Bottlenecks That Block Traffic

In the course of the Keynote analysis, Rushlo identified three best (or worst) practices that car rental sites, and Web sites in general, need to focus on in order to improve technical performance.

1. Too many technical elements on a page: From small non-visual images to java scripts to unnecessary encryption, too many individual elements on a page can stifle performance – and Rushlo has seen pages with more than 200. “The impact is you have a page that visually looks very simple but is extremely complex in terms of the number of elements,” says Rushlo.

2. Java overload: The ubiquitous coding language is an important tool for developers, but every Java script can act like a tiny speed bump for browsers. “Sites may have five, six, seven or 10 JavaScript files in a page, and every time the browser hits that, it slows by almost a factor of two,” notes Rushlo. “Sites need to start examining the trade-off.”

3. Proliferation of third-party tags: The rising number of third-party tags – DoubleClick ads and calls to third-party analytics services – can also hinder performance. While there are compelling business reasons for their presence, Rushlo recommends minimizing them when possible. “We wouldn’t want to see pages having more than five or six separate domains on a page,” he notes. One fix he recommends is to move the tags to the bottom of the page where they are less likely to impact user performance. He gives the example of tags used strictly for an internal business purpose — like tracking user behavior — occurring very high in the page. “The question you have to ask as a business owner is, what is really more useful? Is it more useful that my customer can actually book a car online or is it more useful that I have analytics about them?”

Looking Down the Rental Car Road

“These companies are devoting a lot more money and attention into competing here effectively,” says Foster. “I think they’ll increasingly do a better job as years go by.

“You’ll be able to find inventory very quickly on a mobile device or your Web site by logging in anonymously with no account required, make your reservation quickly and seamlessly in the sense that you know what your product is and you know what price you’ll pay. The information will be delivered up-front quicker and more efficiently on the devices that you have. You’ll be able to make your decision very quickly. You won’t need to make your reservation one day, five days in advance or anything like that — it can be ten minutes in advance from an airport — then you pick your car up.”

While online car rental still has a long way to go to before it embodies Foster’s vision of the future, at least some players in the industry are making definite strides. And as these companies increasingly get the basics right, they can begin to think more innovatively.

Budget, for example, recently launched a system that delivers instant notification to a consumer via email whenever a relevant promotional price is offered. Customers can set up the widget-like “Budget RSS Feed” on any home page and receive instant alerts for special pricing offers from Budget for up to three travel destinations. If a better rate for a planned trip appears in the RSS feed window, the customer can click on the link and be taken directly to to change a reservation and lock in the extra savings.

Mobile internet is another high-potential area for this market. Although the ability to book a car wirelessly has been around since about 2000, it’s still very much gaining traction. Mobile, of course, presents a whole new set of challenges for rental companies in terms of maintaining a positive user experience. Operating on a tiny screen will demand even more technical efficiency and optimization. But the opportunity is a great one, particularly for capturing busy business travelers on the go.

Another opportunity on the rental car horizon is decentralization of the entire car rental transaction.With mobile and GPS technologies, there’s no reason why a consumer can’t reserve a particular car in a particular area — not tied to a car rental store — and pick it up and return it without any in-person interaction with a sales agent. It’s a concept that’s been pioneered in the U.S. by car sharing companies like Flexcar and Zipcar (now merged), and, as John Peebles of Budget points out, there’s no reason it can’t work for rental cars. Again, however, exploiting this market is likely to create another set of usability and transactional challenges for online rental car sites.

In the short haul, the direction is clear. More car rental car brands are focusing more resources on improving site performance and customer experience, positioning themselves on par with the online travel agencies.

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