Wednesday, December 5, 2012

Let's Rent-A-Car :: a-la-Enterprise

It was founded in 1957 with just seven cars; It is an internationally recognized brand with 7000 car rental locations in 5 countries; It garnered $12.1 billion in revenues in 2012 with 68,000 employees. Meet Jack Taylor's Enterprise, the largest car rental company in the United States, rated 21st on Forbes "Largest Private Companies in America". 

Today's blog explores Enterprise's internal organizational analysis w.r.t. to customer satisfaction retrospecting on last week's discussion as to the meaning and result of such analysis. I want to emphasize on Enterprise's deep focus on customer satisfaction because the company does not treat consumer or renter's satisfaction just as another fancy parameter but actually goes to great lengths make it a part of its culture, strategy and business model. Customer satisfaction is measured as well as published on a weekly and monthly basis. The company even hires external agencies to conduct surveys, measure customer satisfaction and gauge the number of repeat customers. 

So, how does the company go about providing customer satisfaction and differentiate itself from the competition? They start by having a rental location closest to the customer (they are within 15 miles for 90% of the US population). This lends it an advantage over its competition and grows its market share. In cases where the the customer is far away from a rental location Enterprise picks the customer from his home till the rental location. Enterprise was also the first to started a rental office in the airport and the need for such a service was so great that it now has close to 300 airport branches that brings in 30% of its revenues. A key differentiating factor that Enterprise has is that being a private company it can effect speedy changes. Despite being huge, it provides a small business feel and inculcates a spirit of entrepreneurship by giving local managers and employees the right to take their own decisions. This leads to autonomous, happy employees which leads to happy customers. Enterprise has notched the award for best customer service ten years in a row now.

This success however has come after a great deal of deliberation and intense internal analysis and focus on building strategies solely focused around customer satisfaction. In 1994 Enterprise was faced with dwindling quality and service levels. Wherever the CEO went the voice of the customer suggested that the company needed to provide greater quality. Enterprise responded by creating a measurement tool for customer satisfaction that involved the entire organization in the process. It included its regional managers in this process and started publishing results per area/group. As employees interest grew it started publishing results for each individual office. Instead of opting for a mail survey the company went for phone feedback to increase the timeliness of feedback. Eventually the company built such a powerful, actionable tool to measure satisfaction on a regular basis that each manager was held accountable for the quality of service delivered. The company went a step further to improve customer satisfaction. It designed its compensation and promotional packages for managers based on the level of quality and service they had delivered. Managers had to deliver quality at least above the company average to qualify for a promotion. The result was that this completely turned around the company and its attitude towards customer service. The number of 'Completely Satisfied' customers drastically increased and the gap between the highest and lowest rating also decreased. Over the years as mentioned above, Enterprise's success and customer satisfaction is now for all to see.

What I gained from this was that when a company's employees' satisfaction and welfare is tied to the customer's welfare and satisfaction the two complement each other beautifully resulting in happier employees and happier customers. Starbucks has also learned to do it this way. My question to you is what from here? Enterprise has notched up every award there is in customer satisfaction. It is the best rental company in the US. Where do you go from here? How do you improve on the best?

References:

[1] www.polarismr.com/Portals/58820/newsletters/customer_satisfaction_research/MRP_0205_Enterprise_Rent.htm
[2] http://travel.usatoday.com/news/2010-11-16-businesstravel16_ST_N.htm
[3] http://www.travelpulse.com/enterprise-rentacar.html
[4] http://www.autoblog.com/2010/11/25/study-rental-car-companies-increase-customer-satisfaction-ente/

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