Description
How Tom Wood Automotive-Sixt franchisee in US did to manage the best way possible the Covid lockdowns? How to maximize profitability prioritizing the revenue per unit per month over utilization? What a pretty refreshing look of revenue optimization!
In this episode, Emmanuel Scuto, founder and CEO of WeYield, talks with Jared Kinnaird, Revenue and Operation Director at Tom Wood Automative (Sixt franchisee in USA).
They talk about
- 2008 and Covid crisis and the learnings to face them
- The higher price is, the better the client is to treat the fleet
- Utilization is not the main goal but the daily dollar average to maximize the revenue per unit.
- "Try tomorrow being better than yesterday"
During Covid (2021-2022), Tom Wood Automotive implemented a cost-saving measure by reducing the workweek from 5 days to 4 days, resulting in significant cost reduction without any layoffs. Going forward, the car rental fleet will not be reduced to the extent it was in 2008 and 2020. Jared believes that having a larger proportion of the fleet at risk presents better profit opportunities after the holding period.
However, this tactic is part of a broader strategy to reduce both the car rental fleet size and utilization, aiming for lower mileage and cleaner cars for sale. In 2019, at Minneapolis airport, rental days increased by 16%, while rental revenue grew by 120%. It's important to consider more than just direct fleet costs. At Sixt Tom Wood Automotive, Jared also focuses on the softer side of costs.
When facing an excess fleet, it's necessary to lower prices to rent out those cars. On the other hand, if the fleet is correctly sized or slightly under-sized, rental costs can be increased as fewer rentals are needed to cover the expenses. After conducting a thorough revenue management analysis, the owners realized that it's beneficial to wait longer before entering the market to capture more profitable transactions.
Jared's focus is on maximizing the revenue per unit per month rather than maximizing utilization. By reducing the volume and increasing the average daily dollar amount, the company has succeeded in improving profitability. Nota: WeYield apps have introduced the RevCar indicator (revenue per available car) to directly track this on the performance graphs.
Discover in this episode:
0:00:00 to 0:07:00 introduction of Jared Kinnaird
0:05:10 to 0:14:20 Learnings from 2008 crisis to prepare 2020-21 Covid
0:14:20 to 0:19:00 Car market perspective on the used car
0:19:00 to 0:36:15 Yield stragegy: reduce utilization to maximize profit. Learn how
0:36:15 to 0:46:00 The management shifted his mindset on making more money on revenue per unit instead of focusing on utilization
0:51:05 to 0:59:00 "level-10" organizational meeting
0:55:30 to 1:20:15 Jared's revenue and general management tips
1:20:15 to end Peer to peer market evolution
References:
- To follow Jared https://www.linkedin.com/in/jared-kinnaird/
- Nathalie Aubin what about fleet optimization (webinar) https://youtu.be/UeB6Zi4mQOA
- EOS software https://www.eosworldwide.com/
- Turo peer-to-peer https://turo.com/
- Tow Wood Automotive https://www.tomwood.com/
- Sixt Indianapolis https://www.sixt.com/car-rental/usa/indianapolis/#/
In this episode, Emmanuel Scuto, founder and CEO of WeYield, talks with Jared Kinnaird, Revenue and Operation Director at Tom Wood Automative (Sixt franchisee in USA).
They talk about
- 2008 and Covid crisis and the learnings to face them
- The higher price is, the better the client is to treat the fleet
- Utilization is not the main goal but the daily dollar average to maximize the revenue per unit.
- "Try tomorrow being better than yesterday"
During Covid (2021-2022), Tom Wood Automotive implemented a cost-saving measure by reducing the workweek from 5 days to 4 days, resulting in significant cost reduction without any layoffs. Going forward, the car rental fleet will not be reduced to the extent it was in 2008 and 2020. Jared believes that having a larger proportion of the fleet at risk presents better profit opportunities after the holding period.
However, this tactic is part of a broader strategy to reduce both the car rental fleet size and utilization, aiming for lower mileage and cleaner cars for sale. In 2019, at Minneapolis airport, rental days increased by 16%, while rental revenue grew by 120%. It's important to consider more than just direct fleet costs. At Sixt Tom Wood Automotive, Jared also focuses on the softer side of costs.
When facing an excess fleet, it's necessary to lower prices to rent out those cars. On the other hand, if the fleet is correctly sized or slightly under-sized, rental costs can be increased as fewer rentals are needed to cover the expenses. After conducting a thorough revenue management analysis, the owners realized that it's beneficial to wait longer before entering the market to capture more profitable transactions.
Jared's focus is on maximizing the revenue per unit per month rather than maximizing utilization. By reducing the volume and increasing the average daily dollar amount, the company has succeeded in improving profitability. Nota: WeYield apps have introduced the RevCar indicator (revenue per available car) to directly track this on the performance graphs.
Discover in this episode:
0:00:00 to 0:07:00 introduction of Jared Kinnaird
0:05:10 to 0:14:20 Learnings from 2008 crisis to prepare 2020-21 Covid
0:14:20 to 0:19:00 Car market perspective on the used car
0:19:00 to 0:36:15 Yield stragegy: reduce utilization to maximize profit. Learn how
0:36:15 to 0:46:00 The management shifted his mindset on making more money on revenue per unit instead of focusing on utilization
0:51:05 to 0:59:00 "level-10" organizational meeting
0:55:30 to 1:20:15 Jared's revenue and general management tips
1:20:15 to end Peer to peer market evolution
References:
- To follow Jared https://www.linkedin.com/in/jared-kinnaird/
- Nathalie Aubin what about fleet optimization (webinar) https://youtu.be/UeB6Zi4mQOA
- EOS software https://www.eosworldwide.com/
- Turo peer-to-peer https://turo.com/
- Tow Wood Automotive https://www.tomwood.com/
- Sixt Indianapolis https://www.sixt.com/car-rental/usa/indianapolis/#/
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