Car Rental Cos. Shift Gears To Rev Up Loyalty Offers
<B>Car Rental Cos. Shift Gears To Rev Up Loyalty Offers</B>
By Lynn Woods
When it was launched two years ago, Hertz's customer loyalty program, #1 Awards, enabled members to redeem the points they earned from their rentals for sports merchandise, airline miles, or car rental upgrades or free days. But as of June, Hertz is phasing out the merchandise and boosting the number of multiple-day car rental redemption awards.
"We've found there's an ever-growing number of redemptions in car rentals," said Frank Camacho, Hertz's vice president of marketing. One possible reason for the surge in demand is that "most airline programs have phased out car rental awards or discounts," he said.
Time and time again, members of frequent traveler programs have shown they prefer miles to merchandise, so it's not surprising that Hertz is getting rid of its redemptions for golf clubs and tennis racquets. "People still want the miles," Camacho said, noting that Hertz participates in 60 airline loyalty programs.
Though each of the three categories in #1 Awards attracts about equal numbers of redemptions, Hertz is discontinuing the sports rewards category because it's more cost and labor intensive. "We have to fill the orders, whereas the other redemptions are simply electronic transactions," said Camacho.
Budget Rent a Car's Perfect Drive, the only other car rental loyalty program, launched about the same time as Hertz's, has diversified its rewards to include motor home and motorcycle rentals through its Cruise America partner, spa certificates and vacation packages. The initial selling point of the program was Calloway golf clubs, which it still offers, along with Boller eyewear. Of course, car rentals and airline miles always have been part of the program.
Budget has been attempting to build loyalty by offering special promotions through the program, of which the latest is double points to members who book and rent their car rentals by June 30. They also receive a 20 percent rebate on all points they redeem, with the extra points banked to their account.
None of the other major car rental firms have loyalty programs per se. However, Dollar Rent A Car's Corporate Dividends program works much like a loyalty program: Participating companies are awarded certificates for free rental days; a free one-class upgrade for the first rental; free enrollment in Fastlane, Dollar's express return service; and miles in eight airline loyalty programs. Participants also are exempt from the additional charge for extra drivers and, of course, qualify for corporate rates.
Express rental services, which usually are offered free to corporate accounts, also continue to be powerful tools in building loyalty. Enrollments in Avis Rent a Car's Preferred Service have surged in the past year, said Avis senior vice president of sales Tom Byrnes, although he declined to give figures. A number of corporate accounts now have their travelers sign up for the service online through Avis's Web site. Avis then processes the application and has the traveler sign the prepared form at the counter at time of the first rental. Byrnes added that Avis' small-business accounts program has grown at a rate of 35 percent over the past three years, greatly outpacing the growth in corporate business.
Hertz, which also has seen the number of small-business accounts increase dramatically in recent years, three months ago debuted online enrollment.
In addition to letting customers sign up for services without leaving the office, the Web is enabling car rental firms to more easily track and develop affinity programs, said Neil Abrams, president of Abrams Consulting International in Purchase, N.Y. "Through their network of partners, they are offering specials on the Web to distinguish themselves from the competition," Abrams said.