Dollar Thrifty Automotive Group Captures Sales Opportunities, Drives Improved Forecasting with JDA

  • JDA Software Group, Inc.
  • 01.09.07
In its first year utilizing JDA’s Rental Car Revenue Management System (RCRMS), Dollar Thrifty Automotive Group improved its bottom line by more than $7 million by leveraging JDA Software Group’s technology to more accurately forecast demand and reduce turn away business.

“When we began working with JDA several years ago, revenue management for the rental car industry did not exist,” said Stewart Brown, staff vice president of revenue management for Dollar Thrifty Automotive Group, Inc.  “With RCRMS we put all our data in one place in a similar format for better analysis, then we crunched the numbers.  The new system clarified the supply-demand process and helped DTG shape a new business philosophy.  Now we also measure the business we do not get, which makes a big difference in how we sell.” 
Brown explained that DTG was very good at renting the cars it had on hand, but when a location ran out of cars, customers had to be turned away.  This created a significant amount of lost revenue.
Brown is one of the first to say it is smart to turn down business that cannot pay the appropriate price; but when a Dollar Rent A Car or Thrifty Car Rental location turned away customers because it did not have cars to sell, it was losing money. 
“Before we automated our demand forecasting with JDA we were not choosing how many cars we rented.  We took reservations until our stock was gone.  Today we look at no-shows, historical demand trends and other factors that help us sell the right car to the right person at the right time for the right price,” said Brown. 
The key is accurately forecasting demand for each store, which eliminates or reduces availability turndowns while optimizing rates. “The first year we used RCRMS, we reduced turn away business by approximately $7-9 million and the improvements are continuing today,”  Brown said. “We are winning business now that we may have turned away before.”
Dollar Thrifty Automotive Group, Inc. is an ROI-focused company.  “We look at every project for a strong payoff,” said Brown.  “Since installing our revenue management solution and analyzing the entire supply-demand process, we are doing more business.  We were also able to reassign nearly half our pricing office staff while doubling our revenue in the same period with the help of the new technology.” 
Dollar Thrifty Automotive Group’s internal pricing team has continued to refine its rate and supply optimization procedure by adding new functionality to their RCRMS.  Based on its extensive knowledge of the industry, DTG enhanced its system by factoring competitive price information into rate-setting process for even better sales performance.

JDA’s Revenue Management group just completed a second project with Brown’s team at DTG to analyze the internal supply side of its car rental business.  Brown noted that the demand side of the industry is under a microscope, but the supply side–how cars are assigned to specific store locations–has not been analyzed as thoroughly.  “We adjust over a million price points every day by applying technology.  We are more sophisticated today and looking for more capability.  If we can use technology to also accurately analyze changing market forces to put the optimum supply of cars at each store, we will have another tool to improve profitability,” Brown explained. 

JDA is also working with Brown and his team to identify a vision of best technology strategy for the next five to 10 years.

In its most recent engagement with Dollar Thrifty Automotive Group, Inc., JDA is studying the possible development of an advanced global system that would more precisely forecast customer demand in every DTG market and combine it with the ability to accurately identify the optimum supply of inventory required at every DTG location to meet that demand.  The result of the study could be a truly visionary system that predicts demand, optimizes rates and fulfills demand precisely each day. 
“Dollar Thrifty Automotive Group is collaborating with JDA to evaluate a groundbreaking unified mathematical business process for the future,” said Brown.  “JDA’s team worked hard and came up with techniques we wouldn’t have.  Many of their insights are helpful and original.”

“Market activity is the hand a company is dealt,” Brown said.  “How you handle it, using revenue management to optimize the available business, is where you make your money.”

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