The Company: Enterprise Rent-A-Car
Revenue: US$5.6 billion
Headquarters: St. Louis
Employees: 45,000 worldwide
Mission: To fulfil the automobile rental, leasing and car sale needs of our customers and in doing so exceed their expectations for service, quality and value.
Customers: Individuals whose vehicles have been in an accident, stolen or are being repaired; individuals who are travelling or need a different car for a special occasion; insurance companies that refer policyholders.
During rush hour along the bustling traffic corridors around most major cities, fender benders are an all-too-common sight. As police officers reroute traffic around the smashed cars, you can often spot the two vexed drivers with cell phones jammed against their ears, reviewing their benefits and coverage with auto insurance companies.
Many of these accident victims who suddenly find themselves without transportation merely receive a list of rental car companies from their insurance carrier--and if they're lucky, the companies' phone numbers. But customers of Geico Direct Insurance can reserve a rental while they're on the phone reporting the accident.
Geico is one of several insurance companies that links its claims systems to Enterprise Rent-A-Car's automated rental car system. By giving insurance companies like Geico access to real-time reservation information, Enterprise not only gets more business, it also makes its business clients look good by allowing them to offer their customers a valuable service. This is just one way Enterprise uses IT to support the company's founding principle: Satisfied customers drive business growth.
Enterprise's "We'll Pick You Up" service, which spares customers the hassle of getting a cab to the rental office, is likely its most visible customer service effort. But behind the scenes, the focus on customers is just as apparent: The company has built its IT architecture to avoid downtime in branches, designed rental applications to ensure any type of car can be offered to a customer and made high customer-satisfaction ratings a prerequisite for employee promotions.
From Enterprise's growth during the past several years, it appears that its efforts in the customer service arena have paid off. In 1985, the company posted $250 million in revenue with its fleet of 27,000 cars. By 1994 (when the company first began tracking customer satisfaction) Enterprise's revenue topped $1.5 billion with 250,000 cars. And in fiscal year 2000, the company reported $5.6 billion in revenue generated by its fleet of 493,000 cars. And although Enterprise is a relative newcomer to the airport market, this spring, J.D. Power & Associates ranked it first among all airport rental car companies for customer service.
A Commitment to Customers
Like many companies, Enterprise had focused on internal processes, such as accounts receivable and cash receipts, when it first began automating about 20 years ago, says Senior Vice President and CIO Bill Snyder. Ten years later, managers committed to moulding the company's systems to support customer satisfaction. At the time, executives were grappling with whether or not to give individual branch offices access to internal systems. A manager's observation--not a return on investment study or other financial considerations--suddenly put everything in perspective. The manager noted that the employees who were most administratively adept were being promoted.
"That was a bad thing," Snyder says. "People had their noses down fiddling around with the computer instead of focusing on the customer." Executives agreed that the company should be promoting the most customer service-oriented employees instead. So the company set out to design a system that would enhance employees' interactions with customers. "All of your systems have to be customer focused and probably more important, your people need to be customer focused," he explains.
In 1992, Enterprise switched from a terrestrial-based network to a satellite network. That move lets Enterprise manage its network from end to end, so that it's not at the mercy of telecommunications companies and Internet service providers. Since the switch to the satellite network, Enterprise has had only one outage, which lasted about two hours. Because of backhoe cuts and other problems causing downtime, terrestrial networks are less reliable, Snyder says. "You can serve your customers because the system isn't down," he says. "The customers don't have to hear, 'I'm sorry, we have computer problems.'" In addition, the satellite system allows the company to open a new branch in as little as 24 hours. Because Enterprise opens or moves at least one location every day, the ability to deploy quickly helps ensure seamless operations. The company, which now has 4,000 U.S. branches, has locations within 15 miles of 90 percent of the U.S. population.
The most important system running on the satellite network is the custom-developed Enterprise Computer Assisted Rental System (Ecars), which rolled out in 1992 and provides branch employees with information they need to support the 1.4 million transactions that the company now logs every hour. For example, if a customer visits a branch and requests a certain kind of car, the system can query other branches in the city to locate one, Snyder says. In addition, the system stores repeat customers' preferences and can provide details about a rental car's availability if a customer is interested in buying it.
Today, customers can also reserve cars at U.S. and Canadian locations on Enterprise's website. Because the company has a single distribution channel, integration to Enterprise's back-end has not been an issue, Snyder says. All of the various reservation options filter back to one central reservation system.
A Customer-Fucused Culture
But Enterprise didn't simply revamp its systems to focus on customers; it gave employees a good reason to be customer focused as well. Unlike airport-based rental car companies that depend on transient customers, Enterprise primarily draws its revenue from suburban branches and local repeat customers. And unlike airport-based agents who may be lulled into thinking they'll never see a customer again, Enterprise agents are keenly aware that keeping local customers happy is vital to the company's bottom line. Since 1995, promotions and salary increases for branch employees have been tied to their location's customer satisfaction ratings. No one at a branch can be promoted if customer satisfaction lags behind the corporate average--even if the branch has revenue and fleet growth, Snyder says. Once employees become assistant managers, they receive a percentage of the profit from their branch in addition to a salary. And as they move higher up the chain of command, a greater percentage of their paycheck is based on their branch's profits.
With their incomes and career paths linked so closely to customer satisfaction ratings, employees pay close attention to the corporate financial details and branch customer satisfaction rankings that their branch managers share with them each month. Through telephone surveys of every 10th customer, the company collects customer satisfaction data that it compiles into the Enterprise Service Quality Index (ESQI), says Dan Gass, assistant vice president of customer service. This index compares each branch's performance to the average for its group and groups' performances to the average for the company overall. ESQI reports highlight branches that exceed the corporate average and provide statistics to encourage branches that are below average but making progress. Since the company began sharing ESQI data with employees in 1994, the customer satisfaction ratings that drive the index have gone up every year, Gass says.
Because the stakes are so high in every branch's quest for a favourable ESQI rating, employees often consult with counterparts at other branch locations to share best practices, Snyder says. While they have access to e-mail, many employees use the company's 20-year-old AS/400 messaging system. "Over time our messaging system has become the highest used application that we have," Snyder says. "It preceded e-mail by 18 years, and it gave all of our employees the ability to instantly compare and talk to each other about, 'How can I get my customer service and fleet as high as yours?'" B2B Customer ServiceWhile Enterprise's Ecars satellite system and messaging system help front-line branch employees serve individual customers well, handling B2B customers with care is also a top priority. Enterprise derives a significant portion of its revenue from insurance company referrals, and 50 percent of that business now comes to Enterprise through its Automated Rental Management System (ARMS), the custom system that lets insurance companies access Enterprise rental information. When a person in an accident calls an insurance company, the insurance adjuster can start a claims file and book a reservation via ARMS. The system also enables electronic funds transfer and provides electronic reporting to the insurance company to support its claims processing.
To cater to its insurance company customers, Enterprise allows them to choose the method of connecting to ARMS. "We'll connect to them however they want," Snyder says. "If they want to connect via a satellite, we'll do that. We will connect via a terrestrial network. If they want to do it over the Internet, we'll do that."
Enterprise can afford to be this flexible because the system is composed of modules that can easily be customised, says Craig Kennedy, vice president of computing services, who reports to Snyder. "If the customer is standardised on a certain EDI format, we customise our data stream so that they need to change very little on their end," Kennedy says. "It amounts to a very quick path to coming up on ARMS without any heavy investment on their side for IT." And the system's flexibility lets insurance companies work with their customers according to their own business processes.
In the past, insurance companies had to make multiple phone calls to repair shops to monitor the progress of each car. Now, ARMS handles this for claims adjusters by sending repair shops "packaged" electronic communications that query for updates on one or multiple cars. As a result, claims adjusters spend less time monitoring repairs and send Enterprise more business, says Snyder.
Geico began integrating its systems with ARMS more than three years ago, says George Rogers, regional vice president for Geico in Dallas. Now, all the Geico data that Enterprise captures is transferred back to Geico's data warehouse.
Rogers says Enterprise "made dozens of changes to its system" to accommodate Geico's management reporting model. And since it began using electronic funds transfer with Enterprise last year, Geico has completely eliminated the need to print paper checks for Enterprise.
"The thing that is really unique about [Enterprise] is the technical support they provide in helping us utilise their system," Rogers says. "They spend a lot of time and put a lot of people on the job." Indeed, Enterprise dispatches its employees--armed with laptops--to insurance company claims centres to help them train on ARMS and manage the car-rental component of claims.
Powering The Future
Enterprise constantly evaluates its technology to ensure that employees are well equipped to serve customers. Snyder's group is now redesigning Ecars with a more Windows-like graphical user interface and is changing the process of opening a rental car "ticket." While the old process leads an employee through predetermined steps, the new process will allow customers to determine the course of their transactions, Kennedy says. In addition, employees will be able to see everything they need to know on a single screen, so that they can better meet customers' requests for delivery time and mode of delivery. The leasing system is also being revamped so that all queries are centered around the customer--and her associated preferences and financing requirements--instead of around a particular car, Kennedy says.
Despite Enterprise's extensive investment in IT, the company generally does not perform formal ROI studies. "We'll make a lot of expensive, big-time decisions without going through ROIs," Snyder says. "While we forecast our expenses, we don't run rigid budgets. We do what's right."
In addition, the company ties the salaries of 20 corporate IS managers to overall corporate profits. As a result, Snyder says developers design applications that support customer service; the company has rolled out only two applications in its history that were not embraced by branch users. "We don't have an alignment issue," he says, "because we're aligned at the wallet."
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Heather Harreld is a freelance writer based in Cary, N.C. She can be reached at (firstname.lastname@example.org).
CRM AT ENTERPRISE RENT-A-CAR
Objective: Develop IT systems that support customer service, not administrative processing.
Process changes: Insurance companies now have direct access to Enterprise's reservations system. Agents can pull up repeat customers' preferences and electronically track down a requested car from another branch.
Enabling technology: IBM AS/400 satellite system and home-grown rental, leasing and messaging systems, which have been revamped to focus on customers.
Payoff: Growth in customer satisfaction ratings every year since 1994; by end of fiscal year 2000, revenues had almost quadrupled.
By Robert Mirani
The Hard Work Behind The Technology
Enterprise Rent-A-Car is a strong example of a company that not only has an expansive view of its customers but is also focused on meeting their needs and retaining them. Enterprise counts among its customers both people who rent vehicles and insurance companies that provide referrals. And the company has created impressive systems to ensure that it is meeting the needs of these distinct groups as closely as possible.
It's important to note that the company didn't just mobilise around its customers from a technology standpoint. It also provided tangible incentives to employees to become customer focused, and made it as simple as possible for employees and insurance companies to access and work with Enterprise's systems.
Enterprise understands that technology on its own does little to ensure the success of any customer initiative. IT can make a significant contribution, but it can only do so with the right company culture and the appropriate processes in place to make that technology work for the benefit of the customer. Enterprise did what it felt was best for its customers and its business, and effectively boosted the bottom line as a result.
Some of the lessons to be learned from Enterprise should be applied with caution, however. Customer satisfaction as a metric for success works well in this case, given the nature of Enterprise's rental car business. But in other industries customer satisfaction does not necessarily equal loyalty (particularly in markets characterised by significant pricing changes or product/technology enhancements). Likewise, a paradox of CRM in an age of packaged software is the fact that some of the most effective current CRM models to date have been largely internal, IT-driven efforts. Internet poster children like Dell and Amazon.com have shunned off-the-shelf CRM packages or customised them heavily, viewing their internal development capabilities as a competitive advantage. Enterprise has done the same.
Companies not blessed with such formidable internal resources can work with outside providers. But they should pay close attention to the process and culture issues that make these companies successful, and not fixate on the shiny technology wrapping on the package.
Robert Mirani is director of CRM strategies at The Yankee Group in Boston.