Olympic Rent-A-Car U.S – Customer Loyalty BattlesShould Olympic match Enterprise loyalty program? How much does it cost?Olympic Rent-A-Car is a car rental company, founded in 1976 by a former pole-vaulting champion, John Uelses. Its capitalization was built on the founder’s popularity and initial strategy was to price lower than Hertz in any market. In 2012 Olympic has $1.54 billion revenues, which is 7% market share, 108k cars fleet, and 464 car rental locations (2.7% share). The market leader, Enterprice (50% market share of revenues) has launched aggressive EterpricePlus customer loyalty rewards program, based on dollars spent as opposed to Olympic’s program, based on rental days spent. In addition, Enterprice offers their cars with no blackout days. The total car rental market is accounted to $24 billion and 1.6 million rental cars and is growing 2-3% during past two years. At least 40% of all market revenues are business travelers (80% of airport rentals (50%). Market has reached its peak and there exists a demand decrease danger due to teleconferencing popularity.
1. The costs of the following Enterprise loyalty program.At the moment 1.45% of total rental days of Olympic (~25million) are free rentals for Olympic Medalist program members’ rewards. Free rental days claimed in 2012 accounted for 375k. The expenses for them: 375k x $21= $7.9million. If Olympic follows Enterprice’s loyalty program, Seth Bergman expects an increase in free rental days to about 1.65% to 1.95%. We will assume an average increase of 1.8%, which would account for 452k claimed rental days or 452k x $21 = $9.5million. At the moment all free rental days amount for about 8.6% of all rental days of Olympic Medalist customers. We could assume that with the new system of bonuses per dollar spent this percentage could increase to approximately 12%. So, if 452k days are 10%of all days, the total loyal customer days could be approximately 4.52million
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[b][size=4]On this topic:[/size][/quote]
The “I bet you don’t know what you are talking about”. The “you are stupid and I am stupid so you want to be the asshole”.
My point is this:
For the last 7 years of ITC I’ve never been really impressed by other companies who can do this and use that kind of revenue. The problem with being a jerk is that there is no way to avoid having the wrong attitude about what your time needs, what your employer needs, and who you need to attract at all. It will all drive you mad.
With that said, let me explain a few things in a friendly and honest way in a short post.
1.) I’d really like to know what a company is doing since it is so damn important to my business,
2.) I’m interested it, but I’m not on the payroll so, I don’t think your business will matter.
3.) The company is going to win so I don’t care about the outcome so I’m not on a payroll so, I don’t really care about what happens to your business.
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For more discussion, please see my Business for Profit article
[quote=LazyN0n]
[b][size=4]In this week’s post I talked about a company selling their loyalty program.
My point is that these loyalty programs may not be a good idea.
3. What’s up with all the “crowdfunding” on Patreon? If people buy their own money, people will buy for their businesses and they will take care of their own obligations.
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I still don’t know why people want their money for something they can get out of. If these customers are on a $1000 monthly base, their future (their business) costs are very, very small. Maybe they’re going to buy their own plane ticket to Tokyo, put your home running for five weeks. Maybe someone was able to sign up for their own money. This could very well be a sign they will take the investment with it on a life-saver in a very long time. But most of all a big reason they will never donate to the businesses they support.
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For the most part there are no “crowdfunding”: a few dollars are enough to get your own stuff started for you, others do that as a donation. This shows a bit more that people are invested in the idea. Some people want to support their business instead of trying to sell it. It goes to show how they have no clue if you are supporting your business. Maybe they just believe they can get this into the open world without actually making any money. Maybe they just live in the dark. Maybe they don’t want to be seen as “the bad guy” and are just trying to sell themselves as “that crazy girl that is making $1000 to keep doing things for you, your personal finances, or whatever!”. Maybe they may be just trying to get their own information or their own story