In today’s day and age, everything has subtly shifted to the confines of the Internet. The entire online experience has become similar across all channels for almost all the industries, especially, Travel Industry. Whether a person is booking a hotel room or planning to rent a car for that much awaited road trip, the experience is now quite similar.
For car rental businesses to attain the maximum sales, they need to ensure that the prices of their services are ideally set in accordance with the competitive environment of their industry.
This is precisely where revenue management and rate monitoring tools come in as part of the overall competitive intelligence strategies. These rate-shopping tools are essential for businesses to come up with dynamic pricing for the right fleet of cars at the right time.
Let’s understand the nuances of competitive intelligence in detail and why it’s essential to have an automated rate shopping tool like Rev-AI in the car rental industry.
The primary driving force behind most purchasing decisions lies in the price of the service. Besides the sustainability and quality of the service, the price is what makes or breaks a customer’s decision to invest.
Given how accessible the Internet is, customers can now browse through several pricing options on different website to choose the lowest one that suits their wallet.
To stay on top of this cut-throat market, car rental businesses must adopt a dynamic pricing system, keeping the competitors and the markets in view.
This is precisely why competitive analysis and intelligence are so essential.
It helps the businesses identify direct and indirect competitors and then focus on them accordingly. The direct competitors are other car rental businesses, which are the main focus area. The indirect competitors are options separate from direct competitors, like public transportation, cabs, market analysis, and the overall demand in the area.
Competitive intelligence refers to analyzing the pricing system of the competitors, the general market pricing standards and other relevant data concerning the demand. This information will help your car rental business arrive at an optimum pricing decision.
Some of the vital information that you should take into purview when analysing your competitors are:
Competitive intelligence does not limit itself to just analyzing your rivals. It also factors in the market analysis and the demand in the region.
So, asking yourself the following questions is just as important:
Knowing how you will outperform the competitors by asking these questions will allow you to formulate a marketing plan better and ultimately come up with the best pricing model.
Knowing the pricing strategies of your rivals will significantly shape your pricing system. Imagine you come up with a discount model that offers 15% off, but you had no idea that your rival company is planning a last-minute discount of 50%.
No wonder your target market will be inclined to your competitor’s business, for the upcoming period.
Thus, having access to real-time information is not only significant but immensely crucial for the overall functioning of your business.
Let’s take a look at why competitive intelligence and analysis are beneficial for your car rental business:
1. Helps beat your competition
Shooting an arrow in the dark with your dynamic pricing system based on no concrete factors like competitor’s data or market demand will not help. It’s essential not only to predict but also to monitor the changes in your competitor’s pricing. This will help you gain the upper hand in formulating pricing strategies. A rate-shopping tool does this exactly, it helps to analyse competitor rates through the day and for a forward-looking period of up to 365 days. So that you are covered for not just the present but also for the future.
2. Accurately regulate your inventory
If you can precisely track the changes in demand in the market and gain an understanding of real-time fluctuations, it will help you manage your inventory well.
If you are planning to offer a lustrous discount on a specific range of cars, you must ensure that it is not out of stock. Otherwise, attracting the customers to your business will be for naught.
Appropriately regulating your inventory of car fleets is just as essential as selling out your service and rate-shopping tool can help you distribute the right car inventory to the right place by showing you the prices at which your competition is selling the inventory, giving you the edge over the competition.
3. Predict market demand
Competitors’ pricing strategies and behavior are both responsible when it comes to strategizing your pricing.
Predicting the market demand and adjusting your service’s pricing is one thing. It’s an altogether different task to monitor the competitor’s behavior and understand their sales graph.
For example, it is always good to match the prices of your competitor in order to stay in the game. Now imagine if your competitor is losing a considerable chunk of its customer base due to some misconduct allegations. This will allow you to capture their target market without changing your prices.
Therefore, predicting the market demand and understanding the changes in your competitor’s business is critical.
4. Crafting better campaigns
Pricing can only attract so many customers. Eventually, it also depends on the advertising strategies employed by your competitor. If your competitor plans to offer a 30% discount on prepaid booking, you can come out with a 40% off for first-timers.
Competitive intelligence allows you to leverage your competitor’s offers and one up them to ensure the growth of your business.
It can be difficult to manually track and analyze your rivals’ activities as well as the general market environment. You can only physically keep track of so much.
Exactly for this reason, you require the magic of an automated tool that can provide you a well-designed examination of your competitors’ businesses and assist you in gathering competitive intelligence.
This is where Rev-AI comes in!
It provides an intelligent rate-shopping tool that is used by some of the top brands in the world, which helps to maximize the revenue based on the inventory, location, car type, demand forecast and several other indicators.
That is not all! Let us look at all the other issues the tools help to solve in regards to competitive intelligence:
1. Identification of the competitors
Understanding the overall landscape of a particular business industry is not just challenging but also not feasible. It’s crucial to understand the primary competition that your car rental business is competing against.
Knowing which specific companies are your rivals and the threat they pose to your business is essential.
Rev-AI rate shopping tool helps keep an eye on your competitors, the market share they own, their pricing system and influencing power. It will help you gain a better hold on the reins of your business.
2. Data analysis
After configuring the primary competitors in the business, the next important thing is to get essential competitor information, monitor, and analyze such data.
Rev-AI offers information based on specific locations to help identify both hyper-local and macro-level demand. This will help you understand the oscillation in prices and how often and why these changes occur.
Moreover, a price drop will allow you to gain insight into data relevant to upcoming events and holidays. You can then use this data to fix your pricing accordingly to stay at the top of your game.
3. Proper reporting and evaluation
Rev-AI offers all of the market demand and competitor analysis data in a well-organized format on a dashboard. This dashboard is easily accessible and allows you to understand the information better, thus ensuring you make well-informed decisions.
It eliminates any chance of playing a guessing game by making the information easy to scout and understand.
This comes especially handy when you have a long line of car fleets to manage and use. The accurate data evaluation helps to plan your inventory adequately based on the pricing and market demand based on the factors like competitive pricing, events, location and weather.
Competitive intelligence is an essential process and not just an after-thought. If you plan to stay as a frontrunner, gaining legitimate and accurate information about your competitors is vital. It will also help you navigate the changing market demand and capture a large part of the market share.
A competitive intelligence and rate-shopping tool by Rev-AI can help you in this process. It’s an investment that will help you significantly improve your pricing strategies, safeguard your profit share and allow you to enjoy high ROI.
Become a wizard in the car rental business that knows how to best price their services and enjoy profitable gains!