THE car rental business seems pretty straightforward at first glance.

However, behind the seemingly simple process of paying a company to use a car for a few days, a carefully devised business plan is in place. This level of sophistication is critical for car rental companies to be profitable.

Given the fact that there’s an aspect of car rental service that most people don’t see, we figured it’d be a good idea to go into detail about the five factors that determine success in this highly competitive industry:

Location

Demand for car rental services varies from place to place. It comes down to practicality. For instance, Lotus Car Rental in Iceland sees a lot of business throughout the year because automobiles are a practical way for tourists to travel around the island nation. Major metropolitan areas with highly developed modes of mass transit are less likely to see this kind of demand for car rentals.

Availability

Different people prefer to drive different types of vehicles. While one customer likes compact sedans with spartan features, another will settle for nothing less than a sports utility vehicle with all the bells and whistles.

Car rental companies have to accurately gauge the vehicle preferences of their would-be customers. It might not be necessary to have every type of automobile available for rent, but a nice variety will increase the chances of drawing customers to your counter instead of watching them walk over to the competition.

Service

The value of great customer service in the car rental business cannot be overstated. There are too many competing companies vying for a steady but limited supply of customers.

While the interaction at the service counter is the signature moment where the agency serves its customers, it’s not the only time a car rental company is expected to provide customers with great care and attention.

It begins when someone visits the company website and starts the reservation process. Considering how much a typical car rental company depends on repeat business, the process never really ends.

Marketing

With so many car rental companies out there, effective marketing campaigns are essential for success.

If a potential customer has never heard of your service but recognizes the competition by name, it’s unlikely they will even consider you as an option.

Making people aware of your brand and what separates you from the rest of the pack is how you build a customer base and – slowly but surely – establish your company as a worthy alternative to more established entities in the car rental industry.

Clientele

Is your car rental service the preferred choice of business professionals, or is it more commonly associated with families going on road trips? Is it a mix and if so, what percent of which?

The type of clientele you draw will determine the level of success you see. When combined with the aforementioned factors of location and marketing, awareness of the target demographic enables car rental companies to tailor their business model more to the liking of their customers.

While the process of renting a car is simple, the management of a successful car rental service is not.

Attaining the profitability needed to thrive requires a careful balance of several factors, all of which require ongoing consideration on the part of the men and women responsible for managing a car rental service.