Do you own vehicles and offer them on rent? If yes, how do you measure success in the car rental industry? Here you will get the 4 key performance indicators to analyze your rental business.
The car rental industry will see a boom in the coming future according to the number of reports. According to it, the annual growth rate of the vehicle rental market in the US will increase by 5-6% in the years 2021-2026. Though it is good news for vehicle rental businesses, it is equally important to level up your services so as to stand apart from your competitors.
Stick till the end of the article to know the vital indicators to measure how well your rental business is doing. These factors may vary as per the industry but the core of the business remains the same. Keep the morale of your car rental business high.
Use these 4 KPIs to analyze success in the car rental industry
Do you set weekly or monthly targets for your rental business? Do you achieve them as expected? What else can you do to measure your success? You will find the answer to these below.
1. WELL-ORGANIZED FLEET
Vehicle rental is a distinct business where the services offered are all related to the fleet. It generates various methods for cost generation even after huge expenses. These expenses include damages, rejections by the customers, repairs, etc. these should be calculated in accordance with inflations, market value, and fuel efficiency of your vehicle.
Don’t worry even after this many expenses, you get multiple ways of collecting revenue for the same vehicle. These ways have to be carefully monitored to track and determine the performance of your fleet. The more organized your vehicles are, the better will be the customer satisfaction which is our next point.
2. CUSTOMER SATISFACTION
What matters the most in a business is your customer satisfaction and is the most important factor in determining your success. The more customers you satisfy, the better will be the chances of generating more leads and converting them into customers.
If you are an owner of a vehicle rental business, along with satisfying your customers, keep a check on the average sale obtained from that specific customer. This will give you insight into customer’s values so that you can make further business decisions:
- Investing in retaining that specific customer or going for the another.
- Making improvements in your fleet.
- Create short-term lucrative packages.
You can make business decisions and boost your revenue only if you understand your customers properly. This brings us to the next KPI in measuring success in the car rental industry.
This factor is not just valid for the vehicle rental business but for every other business. To calculate this, we need to deduct the total amount spent on expenses including the production of goods and services from the total sales.
But this formula is not so direct in the rental business. Because the varieties in the vehicles and their recurring cost lines make the total finance and budgeting complex. This difficulty in identifying actual costs and revenue generated makes it the critical factor for the sustenance of the business.
To calculate this factor, there are many other metrics. Moreover, instead of directly measuring it, you can monitor the variables using fleet management software which impact the revenue:
- onthly or weekly car rental rates
- Percent increment in revenue
- Percent increment in car rental rates
4. RATIO OF THE FLEET TO RENTAL
This is the easiest factor among others but still the number one indicator that detects the performance of your business. This ratio is calculated to analyze the active vehicles which are usable and can be given on rent to the count of the total fleet. This gives you a practical view of sales. Keeping this record consistently will help in tracking the depreciation rate of the product. This influences your decision-making and avoiding breakdown situations or sudden accidents.
The vehicle rental business is booming quickly in most countries across the globe. But the future trend will be of electric cars to decrease the effect of emissions and pollution. We can consider it as a positive sign to live on a pollution-free and greener planet.
If you use these 4 best KPIs to measure success in the car rental industry, you can see yourself in a better off condition. In case you need advice regarding any of these KPIs, You can contact us directly from our website or email us at email@example.com. . We will reply to you as soon as possible.