EXPLANATION OF ACG PROFESSIONAL SERVICES
SERVICES TO THE AUTO RENTAL INDUSTRY
- Structuring start-up
- Franchise system affiliation
- Business plans
- Operations analysis and procedures
- Management controls and systems
- Organization planning and staffing
- Market and sales development
- Fleet planning, management and remarketing
- Risk management
- Finance sourcing (fleet and working capital)
- Technology support
- Reservations delivery
- Management development
- Customer service training
- Labor-management relations
- Yield management strategies
- Acquisitions, divestitures, valuations
- Strategic planning
- Business performance measurement and benchmarking
- Franchise System Development
1. STRUCTURING START-UP AUTO RENTAL COMPANY
ACG will assist business people with no or limited knowledge about the auto rental business and advise them on the structure of the company and help them begin operations. ACG professionals will educate these clients on all aspects of auto rental operations, including the risks and rewards, to assure they fully understand the obligations, responsibilities and challenges of the business. Included in this service are such factors as:
- Business planning, budgeting, and forecasting,
- Fleet planning,
- Fleet sourcing and acquisitions,
- Fleet financing,
- Securing fleet insurance and risk management,
- Facility identification and set up,
- Competitive analysis,
- Market analysis,
- Sales and market development,
- Operations planning,
- Organization planning,
- Financial planning,
- Employee recruitment and training,
- Customer service training,
- Technology planning and securing required hardware and software,
- Generally working hand in hand with clients to put them into the auto rental business.
2. FRANCHISE SYSTEM AFFILIATION
There are many auto rental brands and systems offering franchises or affiliate agreements to independent auto rental operators or operators who are currently affiliated who want to make a change. Each of the franchisers or affiliation networks have strengths and weaknesses, offer different products and services, and come with varying cost and fee requirements.
ACG will work with our clients to identify their specific needs, objectives, and expectations of affiliation with an auto rental brand or system. We will then draw a profile of the type of affiliation required and identify brands or systems which may be viable for the client’s particular market. Additionally, ACG will represent our client’s interests in contacting, communicating, and negotiating with the brand/system representative, based on the client’s specific desires.
3. Business Plans
There may be different times throughout the evolution of a company where it is required to tell a story regarding the business it is in, its history, organization, competition, and marketplace, as well as to provide financial projections or a pro-forma, based on certain business conditions. These circumstances may exist for purposes of a start-up, an existing company looking to secure additional financing, a business ownership desiring to put its company up for sale, or a variety of other reasons that occur throughout the life cycle of a business.
ACG specialists will use their experience and knowledge of the auto rental business and travel service industry to construct a professional, well-thought-out plan using information provided by our clients and working closely with our client’s management. The plan will be custom designed to communicate the client’s message and accomplish his objectives.
4. OPERATIONS ANALYSIS AND PROCEDURES
From airport to local market to replacement oriented auto rental businesses, the day to day conduct of the operations is critical from a fleet movement, customer service, and cost efficiency perspective. ACG will put the entire mode of operations under a microscope and evaluate each procedure, method, and policy utilized by each job classification to assure an overall “best practices” approach to the conduct of business. This may include, but not necessarily be limited to:
- Fleet movement within the facility and distribution among locations (distribution),
- Rental and customer service procedures, including check out and check in,
- Staffing and manpower planning,
- Bussing operations,
- Maintenance procedures,
- Car control,
- Cash control,
- Security procedures.
ACG’s philosophy is that there is no one formula, nor a cookbook approach to effectively and efficiently running an operation. One must be tailored and customized to the specific needs and profile of the business. ACG will challenge and test existing formulas.
5. MANAGEMENT CONTROLS AND SYSTEMS
The key to building and then maintaining a profitable, forward thinking auto rental company is:
- having total control over resources, both human and capital;
- having assurance that the return on investment in the assets of the company, i.e., the fleet, is maximized, and that the asset is secure;
- and having confidence at all times that management understands what is going on within the operations, knows when there is a breakdown in the system, and generally has a good handle on the performance of all elements of the business.
ACG will evaluate the systems and procedures in place that provide the guidelines to management and then to their subordinates to carry out the directives and objectives of the company. Equally important, the monitoring, follow-up, and communications policies in place will be evaluated to assure that there is methodical and consistent compliance.
The focus on this service is CONTROL – over customer service, operations, administrative, and financial functions of the organization. Business performance and management information reporting systems, both manual and technology based, will be developed where necessary to provide the confidence and control discussed.
6. ORGANIZATION PLANNING AND STAFFING
The auto rental business essentially depends on two different types of resources, cars and people. Since all companies within an industry tier have more or less the same cars, the difference than is people. In fact, an argument can be made that without the people factor considered, auto rental is nothing more than a commodity business. Consequently, there is a mandate for an auto rental operator, regardless of size or profile, to have the right people doing the right things at the right price.
ACG will evaluate the current organization, including management, supervisory, professional exempt and hourly non-exempt classifications. It will examine:
- the structure,
- the reporting relationships,
- the job descriptions,
- the background and qualifications of incumbent staff,
- the depth of the organization in intellectual and physical skills and capacity,
- the number of employees in each classification,
- the scheduling of each job category,
- the productivity of each category,
- the cost contribution of each job category, and the total organization cost as a function of the size and needs of the company.
Subsequently, ACG will comment on the existing structure, in all of its aspects, and if necessary, offer alternative approaches based on its experience with hundreds of organizations. The objective would be to develop a structure which possesses:
- depth of knowledge and skills,
- top down control,
- the ability to deliver a quality product and service.
7. MARKET AND SALES DEVELOPMENT
ACG believes through proven results that to be truly successful, an auto rental company must become sales driven, going beyond simple reservation delivery and “order processing”. An Operator cannot be intimidated by the strength or dominance of the market by a competitor, but must create opportunity and maximize fleet utilization by expanding business delivery channels. ACG will:
- evaluate existing market penetration and customer mix and demographics,
- examine daily, weekly, monthly, and seasonal business cycles,
- evaluate current reservation delivery and business generating methodology,
- review existing sales philosophies, strategies, resources, and materials,
- develop a marketing program and sales strategy based on the client’s business objectives and economic parameters,
- monitor and direct the program.
Whether our client is airport, local market-retail, or replacement oriented, there are options and opportunities to drive utilization and yield. ACG will work with our clients to identify where and how to take advantage of all of the possibilities.
8. FLEET PLANNING, MANAGEMENT, AND REMARKETING
As the auto rental industry has come full circle over the past two decades, once again the art of asset management has become of equal, if not greater importance, compared to such activities as rental operations, customer service, and sales and marketing. The ability of an operator to maximize utilization and yield is significantly impacted by cost, age, and size of fleet, and ultimately the value of the asset. The mandate to buy right and smart, to generate a healthy yield while a vehicle is in service, and then to dispose at the right time and with the right means has never been greater.
ACG will work with our clients to:
- evaluate their historical demand patterns,
- review important performance measurements related to fleet utilization,
- review existing fleet sources, programs, costs, and options,
- evaluate the overall procedure for the fleet planning process from the time a vehicle enters the fleet till it leaves the fleet, and the economics at all stages,
- develop options for disposal.
The ultimate objective of this activity is to manage the return on investment in the asset throughout its life cycle in the fleet.
9. RISK MANAGEMENT
After fleet acquisition and financing, asset protection and security is the next most critical area of auto rental operations. The high level of capital intensity of the business, combined with the significant exposure and liability inherent in the business, added to the substantial range of costs associated with asset protection, mandate a careful scrutiny and planning of risk management programs.
ACG will work with its clients to:
- examine their loss experience,
- renter qualifications,
- rental procedures,
- current coverages, including deductibles, umbrellas, and existing terms and conditions,
- ancillary insurance products saleable to customers,
- pricing and secondary liability issues,
- claims processing and subrogation procedures, and
- alternative insurance sources,
in order to assure the maximum protection, the minimum exposure, at the lowest possible cost.
10. FINANCE SOURCING
Fleet finance is the single largest cost of business in auto rental and has the greatest ability to impact the bottom line in a positive or negative way as a function of facility used.
ACG will assist its clients in evaluating current financing approaches and terms, measuring them against industry standards and ACG’s own benchmarking criteria. ACG will then use its network and resources to identify potential alternative sources of fleet financing and structure a program which would either supplement or replace the existing facility and generally seek to improve profitability by lowering the cost of money. The focus is to develop options and opportunities to improve client financial performance through alternative financing strategies.
11. TECHNOLOGY SUPPORT
As the auto rental business has continued to evolve over the past decade, it has become more technology dependent when it comes to:
- customer service,
- fleet management,
- accounting and administration,
- sales and marketing.
As importantly, technology is not only a management tool to oversee the operation, but it is more and more focused on driving utilization and yield.
ACG will examine and evaluate its client’s current technology capabilities. It will look at hardware and software support, the functionalities and applications it presently has at its disposal, and the functionalities and applications it needs to develop and grow.
ACG will further access its network of resources, contacts, and relationships to offer clients alternative approaches to information technology and management information systems to support the client’s business plan. It will also represent the client, and negotiate on its behalf if desired, in dealing with its technology suppliers.
12. RESERVATIONS DELIVERY
Many of ACG’s clients come to it to assist in developing channels of customer delivery, separate and apart from normal sales and marketing programs driven internally from within the organization. Typically, these requests come from:
- airport operators who need to tap into global distribution systems (GDS’s) such as Sabre and Apollo to access the worldwide travel agent community; or,
- companies who want to create their own reservations center.
With respect to GDS’s, there are many approaches and options available to operators to get onto these systems, including developing their own internal capability and code, or tapping into an existing system and code through an affiliation agreement. There are significant cost and resource issues associated with the decision, and ACG will assist its clients in figuring out the best cost to benefit approach.
With respect to reservation systems development, ACG will work with its clients on a feasibility study and the due diligence necessary to construct, fund, and manage such an effort. It will use its experience and network to put together the resources to plan, construct, and implement a system.
13. MANAGEMENT DEVELOPMENT
Notwithstanding the importance of procedural, administrative, and technological systems, the ability of management to direct, oversee, and control the multitude of activities occurring within the operations is a criticality for any successful auto rental business, no matter how large. All managers, from the most senior level to first line supervisors, must understand the importance of the human factor in the operational equation, and have an arsenal of skills and knowledge to achieve peak efficiency and performance from each and every employee. The people skills must be recognized as having as great an importance as business knowledge and skills.
ACG will work with owners or senior executives of auto rental and travel service companies to construct a customized program to train and develop supervisors and managers in critical disciplines, including, but not necessarily limited to:
- Communications,
- Motivation,
- Disciplining,
- Policy and procedure interpretation,
- Objective setting and monitoring,
- Dispute resolution,
- Team building,
- Perormance reviews.
ACG will further develop and conduct a program around any specific management priority, goal, or strategy that may be unique to the client’s specific operational requirements.
14. CUSTOMER SERVICE TRAINING
ACG believes that service is the backbone of the auto rental business, and is what differentiates auto rental from any commodity business. It’s what sets companies apart from each other, and is an important determinant in developing a loyal customer base and solid market share.
ACG will utilize its full resources and decades of experience in all aspects of customer service to work with client management and employees to deliver the highest caliber of service and a quality product to the customer. The objectives of such an exercise are to:
- Develop an all-encompassing customer service philosophy and strategy to which all company employees will commit and implement. There must be well-defined objectives and results which are communicated to and acknowledged by all staff, including owners and senior management.
- Take full advantage of the opportunity at rental to maximize the customers’ positive experience with the company, and optimize the revenue opportunity at the same time.
- Assure at time of check-in that whatever positive experience the customer has is embellished and reinforced. Frequently this is the last thing the customer remembers about a company.
- Point-of-sale techniques and skills will be identified and taught to customer service personnel with the objective of maximizing revenue opportunity from each rental transaction, while not damaging the customers’ experience with the company.
15. LABOR-MANAGEMENT RELATIONS
Once again, the criticality of well controlled and directed oversight of the workforce cannot be emphasized enough as a key ingredient in the development of a successful operation. Employees must understand:
- the rules and guidelines of employment to which they are obligated,
- the obligations and responsibilities of management to provide a safe and fair workplace, and a satisfying employment experience within the realities of the auto rental business,
- their employer’s philosophy on a union free environment, and commitment to provide a work experience where employees will not have a need for union representation.
Toward this end, ACG will provide the following services:
- Construct a written employee relations policy and procedure manual consistent with the client’s employee relations philosophies and operational requirements, and statutory obligations.
- Develop employee/management communication programs to assure management understands employee attitudes, feelings, and problems.
- Conduct a union vulnerability audit to determine the susceptibility of the work force to union organization.
- Develop and direct the company campaign in a union representation election.
- Negotiate a union collective bargaining agreement.
- Handle arbitrations and disputes dictated by collective bargaining agreements.
- Advise and represent clients, if desired, in their day to day dealings with their unions.
16. YIELD MANAGEMENT STRATEGIES
Yield management is a revenue optimization technique which is based on the very principles upon which supply and demand dynamics is founded. It provides for a fluid pricing mechanism which factors in historical utilization patterns, future demand projections, and current reservation build. Yield management can be as simple or as sophisticated as the capabilities and desires of an auto rental company dictates, and can be technologically based or manual. The importance of yield management is that it can be performed by any company with the discipline and commitment to follow its requirements – and it will strongly and positively impact the revenue line of any such company.
ACG will work with its clients to:
- understand the cost and benefits of yield management techniques for their particular operations,
- evaluate the feasibility and practicality of a yield management program,
- help develop the building blocks upon which to execute a yield management program, and put together the resources to construct the program,
- identify technology and systems available to drive a yield management program,
- evaluate the results of the program, adjust, and monitor on an on-going basis.
17. ACQUISITIONS, DIVESTITURES, VALUATIONS
Given ACG’s prominence, experience, and independence in the auto rental industry, it has been frequently requested to:
- assist existing companies in the auto rental, travel service, or collateral business to participate in the due diligence phase of an acquisition, i.e., identify an acquisition candidate or evaluate the viability of an acquisition candidate,
- assist owners of a company in preparing a “Book” or document to be used in the offering of the company for sale, or identifying prospective buyers of a client,
- make an appraisal or independent assessment on the value of a company for acquisition or divestiture purposes. ACG has experienced and specialized financial analysts who perform such valuation.
18. STRATEGIC PLANNING
Many clients have come to ACG over the years to help them understand the changing landscape and competitive climate of the auto rental business in their particular market, be it local or global. Additionally, ACG assists the client to develop a proactive, responsive strategy to evolve along with the changing market conditions. This could include:
- changing its formula for its conduct of business,
- re-defining or re-positioning itself in the marketplace,
- forming new associations or alliances with companies where synergies may exist,
- establishing new goals and objectives from an operations, service, sales, or overall financial perspective.
ACG will assist the client to work through the maze of challenges and opportunities in what has become an extremely dynamic industry.
19. BUSINESS PERFORMANCE MEASUREMENT AND BENCHMARKING
ACG will put the client’s entire operation under a microscope and use its substantial experience and resources to evaluate how well the business is operating. ACG will, in essence, perform a diagnostic on the business, comparing a broad series of performing criteria against benchmarks and industry standards which ACG has built and maintains. Each “matrix” analysis is performed client-specific as it is a function of the unique operational parameters and the market profile with which the client conducts business.
20. FRANCHISE SYSTEM DEVELOPMENT
Throughout its history since forming in 1982, ACG has developed an expansive expertise in working within franchise systems and with franchisees of these systems. ACG has used its resources on behalf of its clients to:
- evaluate if franchising is an appropriate direction for the company to go,
- help clients understand the positives and negatives of franchising, and the legal parameters within which it must operate,
- secure legal counsel to assure statutory compliance,
- construct a “Uniform Franchise Offering Circular” (“UFOC”) as required,
- develop franchise systems standards, codes, and objectives by which both franchiser and franchisee will be held accountable,
- recruit prospective franchise candidates based on pre-established profile criteria,
- generally assist the client to manage the orderly and controlled growth, and profitability of the system.