Regardless of industry, keeping loyalty program members consistently engaged and securing long-term loyalty in a crowded and competitive landscape can be difficult. Consumers may belong to several loyalty programs and only consider interacting with a given program when they’re already transacting with the brand.
A loyalty program’s rewards portfolio might be mostly geared toward a certain redemption type – like hotel stays or fuel credits – and only prompt members to think about it when they’re considering those purchases. Essentially, when a loyalty program’s rewards don’t align with members’ everyday needs, engagement is going to be a challenge.
This is where including car rentals as a reward option can make a real difference. Often an afterthought compared to other travel rewards like airfare or lodging, car rentals align with both the inspirational nature of travel (renting a car is usually an essential component of leisure trips) and the everyday value consumers expect from the loyalty programs they belong to.
Our recent report, Driving Loyalty: Market Insights on Car Rentals & Reward Programs, supports the idea that car rentals can be a valuable reward option that loyalty programs can leverage to create a consistent revenue stream. Based on a survey of over 3,500 participants across all 50 U.S. states and Washington, D.C.—including 2,000 respondents who had rented a car in the past 12 months—the report identifies a population of consumers that are motivated by the value of car rentals as a discount or points redemption option.
These customers are ready and willing to rent cars through their loyalty programs, and they are likely to use that benefit not just for vacation or business travel, but throughout the year. This data suggests that car rentals can indeed be loyalty programs’ secret weapon for driving engagement – if included as part of a comprehensive rewards portfolio.
What Motivates Loyalty Program Members
Our report reveals that trust is a powerful driver of loyalty program membership and sustained long-term engagement. As a motivation for membership in a given program, 43% of respondents place it within their top three reasons for joining. In fact, trust is the leading factor across most loyalty program categories, including retail (46%), financial services (37%) and professional and lifestyle associations (49%).
But if trust is the foundation of loyalty program membership, value, convenience and flexibility are what keep members regularly active and engaged.
Our report data shows that when it comes to car rentals, consumers prioritize member-only discounts, ease of booking, and competitive pricing in their loyalty interactions. They also increasingly prefer flexible payment options that provide more beneficial and convenient ways to redeem points. With 89% of respondents earning loyalty points from at least one program and 63% regularly using a combination of points and cash for redemptions, loyalty programs have a clear opportunity to optimize their offerings for greater member satisfaction. Loyalty programs offering these benefits – and have earned the trust of their members – outperform more generic programs by delivering a more transparent and rewarding experience and providing members with practical rewards that fit with their everyday activities.
Car Rentals: A Valued Benefit and a Massive Opportunity
Car rentals are one of those practical rewards, and they present a significant untapped opportunity for loyalty programs. In our report, 45% of respondents showed an interest in renting a car through their loyalty programs, representing an estimated 27 million potential customers.
Despite this, only 12% of those who have rented a car in the last 12 months used their loyalty program for the booking, potentially due to:
- the absence of a car rental offering within their loyalty program
- complexity in the redemption process
- a lack of personalized options that cater to their specific needs
However, these renters are highly satisfied, with 88% willing to rent again. Notably, 56% of 25-39-year-olds—a typically hard-to-reach demographic—show the greatest interest in renting cars through loyalty programs.
Given that the US car rental market is expected to surge to $44.7 billion over the next five years, capturing consumers who have shown a willingness or intent to rent a car through a loyalty program represents a $20 billion opportunity.
Combined with the fact that car rentals ranked among the top preferences for loyalty program members (surpassing health and wellness products, clothing, and homeware), simply making this option more widespread across programs will go a long way toward realizing that revenue opportunity.
Everyday Value for the Everyday Renter
Perhaps the most persistent preconception about car rentals is that they only occur within the context of travel. In fact, 24% of car rentals are for everyday purposes, such as moving, visiting family, or weekend trips.
This is why 63% of everyday car rentals are picked up at local branches rather than airports or major travel hubs:
- These renters tend to be more value-conscious than their counterparts renting a car for travel purchases, and less likely to use an online travel agency (OTA) for their car rental booking, making them ideal targets for loyalty programs that can offer both value and a non-OTA booking option.
The size and makeup of the everyday rental segment suggests that loyalty programs that aren’t explicitly tied to a travel brand or feature travel rewards as their chief incentive can benefit from offering car rentals. There is real, consistent demand for convenient rental options, and if a loyalty program for a retail brand, for instance, offers this benefit to its members, they are likely to engage with that program even when they’re not currently shopping with the brand.
Car rentals are the unsung heroes of the loyalty program reward portfolio. When offered to members in the right way, using trusted suppliers and transparent pricing, they can effectively tap into members’ motivations. They create an opportunity for members to extract more value from their programs, not only when traveling but for everyday purposes.
Taken together, these factors make loyalty programs uniquely well-positioned to capture a larger share of the car rental market by incorporating car rentals as both earn-and-redeem and discounted options within their rewards frameworks – and to capitalize on a massive engagement and revenue growth opportunity by doing so.
Download your free copy of the CarTrawler report, Driving Loyalty: Market Insights on Car Rentals & Reward Programs here.
About the Author
Aleksander Kaczmarek, VP of Loyalty Partnerships, CarTrawler
Aleksander Kaczmarek has over 13 years of experience in loyalty, specializing in identifying, launching, and growing strategic partnerships across the travel, financial services, and retail sectors. He has previously held roles at IAG Loyalty (Avios) and Affinion International (CX Loyalty). Currently, Aleks serves as the VP of Loyalty at CarTrawler, the world’s leading B2B technology provider of car rental and mobility solutions to the global travel industry. Link to authors LinkedIn: https://www.linkedin.com/in/aleks-kaczmarek-73b76211/
