Fsu enterprise rental car

1.What should Walkins do? What factors help explain Olympic’s performance? What market forces may impede it in the future?

2.Assuming Olympic responds to Enterprise, how should it do so? What is the potential impact of emphasizing dollars spent versus days of rental? What is the potential impact of removing blackout dates?

3.What is the cost of matching Enterprise? How much should Olympic be willing to spend for the Medalist program?

4.What is the monetary value of a medalist to Olympic?
9-913-568 REV. DECEMBER 6, 2013 JOHN DEIGHTON JAMES T. KINDLEY Olympic Rent-A-Car U.S.: Customer Loyalty Battles Laura Walkins, vice president of marketing, and Andy Kim, manager of customer relations programs, stepped off the DFW Airport shuttle bus on a warm October afternoon and hurried inside to the Olympic rental area. They had come to Dallas to meet with Olympic’s district managers and top marketing staff to try to determine how to respond to Enterprise Rent-a-Car’s recent aggressive move with its EnterprisePlus customer loyalty rewards program. As they spotted their names on the Olympic Medalist board, indicating where to find their waiting car, Laura and Andy couldn’t help but notice the long lines at the Enterprise counter. Enterprise had changed its customer rewards program several months before. On July 5, 2012, it announced that its ‘‘regular’’ customers would receive free rental days on any car, with no blackouts. It also announced a perhaps more troubling aspect of its new program: a shift from rewarding days rented, the common practice in the industry, to dollars spent. Because frequent travelers typically spent more for daily rentals, they would earn free rentals faster------and more often. Laura slipped behind the wheel of a white Hyundai Sonata and drove toward the exit, listening as Andy talked about the main topics for the meeting. He pointed out that the Olympic Medalist Awards loyalty program was, in his view, the number-one reason for Olympic’s growth and profitability. He also stated that Enterprise was making inroads in its quest to capture more of the crucial business traveler market. ‘‘We have to do something. Enterprise is a well-run company and a formidable competitor. We can’t just let it take business from us,’’ he said. ‘‘I think our service and pricing are competitive. Our share of business-traveler bookings is holding up, but our Medalist Awards program may come to be perceived as inadequate compared to Enterprise’s.’’ Laura accelerated onto the highway toward their hotel. This is going to be an interesting meeting, she thought. Loyalty Marketing Programs Customer loyalty programs are direct efforts by companies to gain long-term business from their best customers. These programs also provide considerable information about customers that enable companies to maintain a more knowledgeable and ‘‘personal’’ relationship------ideally similar to those customers develop with many small, local businesses like dry cleaners and hair salons. ________________________________________________________________________________________________________________ HBS Professor John Deighton and College of Charleston professor James T. Kindley prepared this case solely as a basis for class discussion and not as an endorsement, a source of primary data, or an illustration of effective or ineffective management. Although based on real events and despite occasional references to actual companies, this case is fictitious and any resemblance to actual persons or entities is coincidental. Copyright © 2013 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for use only by Essa Alkhudaysh (eank1989@gmail.com). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. 913-568 | Olympic Rent-A-Car U.S.: Customer Loyalty Battles The idea of rewarding loyalty is not new.