Budget’s Big Blast

Posted on by Chief Marketer Staff

Perhaps the name Budget reacts with the well-burnished executive ego like some image-tarnishing oxidizing agent. No matter. Marketers at Budget Rent a Car had to do something to start scoring more business travelers – the bread-and-butter of the industry – and changing its name was not on the board.

“Our share of frequent renters isn’t as high as we’d want it,” admits Budget vp marketing Mike Gavelek. “But there’s a lot of frequent renters out there to steal.”

Like any good customer-rustlers, Gavelek & Co. started out by casing the joint. They hired Norwalk, CT-based consumer attitude specialists Yankelovich Partners to do one-hour interviews with 1,200 business travelers, probing what they looked for from their rental car companies. The Lisle, IL-based Budget augmented that effort by mailing questionnaires to 10,000 customers, asking them what they expected in a loyalty program.

“At the highest levels of renters,” says Gavelek, “three requests were constantly repeated: One, speed of service; two, rewards that mattered; and three, personalized service.”

Budget dealt with items one and three last summer with the institution of Fastbreak, which attempts to cut the average renter transaction time in half – to 15 seconds. Customers who sign a Master Rental Agreement kept on file by computer never again have to stop at the rental counter to sign any papers. At select airports, members of the program are delivered by Budget vans to canopied areas in parking lots, where cars are grouped by class – full-sized, intermediate, and so on. They go to the class area of the cartype they’ve reserved, pick a car (The keys are in the ignition. That’s why this is at “select” airports only.), motor to a booth where they present their drivers’ licenses, and boogie on.

PERFECT DRIVE But Fastbreak is an addendum to Perfect Drive, the groundbreaking – for the rental car industry – loyalty program Budget instituted in April to deal with that pesky Item No. 2: rewards that matter.

Budget marketers knew from their research, and their guts, that meaningful rewards did not include frequent-flyer tag-along programs. “Ninety percent of people who join them join other ones, too,” says Gavelek. “And anyway, what good is 500 miles for a rental when you need 30,000 miles to get a free airline ticket?”

The answer to the reward question also lay in the research. Heavy business renters, those who rent at least four times a year, Budget found, are three times more likely to play golf than the average renter. They, too, are also five times more likely to purchase golf clubs and accessories. So Budget hired agency Carlson Marketing to look into a golf-related premium program. Then came an exclusive arrangement with Callaway Golf to put its top-selling equipment in Budget renters’ golf bags, instead of nameless miles in their frequent-flyer accounts. Perfect Drive was born.

The Perfect Drive frequent-renter program awards members with one point for every dollar they spend at Budget, including fuel purchases, optional insurance, and taxes. Members can spend the points on free car rentals, or even frequent flyer miles. But they can also decide to redeem them for the famed Big Bertha titanium drivers or any other golf clubs, equipment, apparel, or merchandise presented in a catalog mailed to them monthly by Callaway (in itself, not a shabby coffee-table premium for the image-conscious duffer).

All renters who sign up for Perfect Drive are eligible for a special introductory offer of a Bobby Jones BJ-2 putter after their first five rentals, which must add up to at least $300 in revenue for Budget.

“Five rentals and you get a putter worth $110 retail,” says Gavelek. “Now, we haven’t gotten out of airline programs, but if you look at 500 miles a rental and 30,000 miles for a ticket, that’s 60 rentals before you get a reward.”

THAT HERTZ Hertz did the math – right quick. Less than a month after Budget unveiled Perfect Drive, the top player in rental cars debuted its own sports equipment premium program, called #1 Awards, and tacked it onto its Hertz #1 Club program. By the speed of its reaction, one could assume Hertz had gotten wind of some other numbers, such as the hordes of business travelers signing up for Budget cards.

By July, 250,000 people had become members of Perfect drive. “Acing over a quarter of a million applicants for a new frequent-renter program in just three months has exceeded our own expectations,” commented Budget ceo Sandy Miller when the milestone was reached.

Another 100,000-plus golf nuts had pulled their carts up to the Budget counter by September. “And about 50 percent of the business, we think, is incremental,” says Gavelek.

To their credit, Hertz marketers made no bones about the fact that Budget was the pioneer in preferred-renter premium programs. They recognized a good thing when they saw one, and they wasted no time getting in on the action.

“Hertz has a policy to evaluate any competitive offer,” says division vp-marketing Frank Camacho. “We are constantly looking for ways to reward loyalty.”

While Hertz can be applauded for its quick marketplace reaction, its haste in teeing up a program on a par with Perfect Drive left it a little short of the green.

Budget had already nailed down a detailed and exclusive agreement with Callaway, the hottest name in golf, so that road was closed. And there was no time for putting a catalog together. Initial #1 Awards offers, then, consisted of only four items: an Arnold Palmer Original putter, an Adams Tight Lies 16 degrees Fairway Wood, and Wilson Hammer 7.4 and Prince Thunder Bolt tennis racquets. No sense working out all new rules either: The Palmer putter, like Budget’s Bobby Jones intro offer, is obtainable for five rentals worth $300.

“The Hertz program matches our program rule for rule,” notes Budget’s Gavelek. “But they’ve only got a couple of clubs and a couple of tennis racquets. Our members can get a full set of clubs, the bag, and the apparel.”

Budget aims to hold its spot as the pace car in the rental premium game. The company has just inked new exclusives with K2 skis and Bolle eyewear for Perfect Drive’s winter push.

Skiing, anyone? Hurry, Hertz, get those bindings fitted.

It’s not just rental car companies using high-end premiums to add some lift to tired old frequent-flyer-mile programs. The airlines are gettting into the act.

To promote the debut of its Premier business class, Aer Lingus is offering pieces of Waterford Crystal to passengers who book roundtrip seats in the section. In the Raise a Glass to Premier promo, members of the airline’s Travel Award Bonus program who book a fare between the U.S. and Ireland can choose two Waterford stems or an eight-inch bowl. Two rounders gets a 10- or 12-inch vase, a 10-inch bowl, or a carafe. Three or more roundtrips merit selection of a 14-inch vase, a 13-inch platter, or a 13-inch centerpiece.

Say, didn’t supermarkets do this with china sets 40 years ago? It was a good loyalty device then, and it’s still good now. But somehow we can’t picture little, old ladies booking needless trips to Killarney to complete the set with that centerpiece.

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