My car was in the shop last week for its 95,000-mile service and something was different. I have been going to the same dealer for years and I take advantage of their loaner program to make sure I can still go about my day with a car. Additionally, I also to get the chance to drive a new and different car. The dealer always had a guy who managed the loaners. This time it was a different guy and he wore an Enterprise rent-a-car shirt. I talked with him as we went through the paperwork, etc. and it turns out that Enterprise took over the loaner program for this dealer. This is a product, Enterprise, offers to all dealers. This is a sound strategy for Enterprise as they leverage their core competency of managing a fleet of rental cars, while helping the car dealer get out of a business that’s both outside their core competency and likely an expense.
Now don’t get me wrong, Enterprise has had car dealerships as customers for a long time, they built their entire model around being the rental car company you go to when your car needs extensive service or body work. These dealer relationships and relationships with auto insurance companies fueled their growth. I even had an Enterprise rental car at this dealer years ago, but it was arranged by the guy who managed the loaners and used Enterprise “pick you up” service as overflow for when they were out of loaners.
This service (product) is a new, a more integrated relationship which enables Enterprise to expand their footprint and grow. It also enables the dealer to move a cost center into an outsourced partnership. The basics, as I understand it from the conversation, are that the dealer is required to own a minimum number of loaners by the OEM brand, which they do and Enterprise manages them. However, Enterprise uses cars from their fleet that are from the same OEM, giving a much larger footprint of on-brand loaners. They charge these rentals to the dealer, but everything else is handled directly with the person whose car is in for service.
This arrangement makes sense on so many levels for both Enterprise and the dealer, but also for the customer (me in this case). The dealer reduces the amount of capital tied up in loaner inventory and the losses they get on those cars as they depreciate. Enterprise increases their rentals from that dealer, and due to their critical mass of their fleet, it has no impact on their capital. The customer gets a loaner without hassle, and with more loaners available more options for when they can schedule their service.
I would love to learn about the process for this product strategy, where did the idea come from? How did they validate the opportunity? It seems like a no brainer, but too often we don’t see the obvious right in front of us.
It is this type of organic growth that I am passionate about. How do you talk with your customers and find new ways you can deliver value for them? Through our Market Opportunity Optimization/MO2 projects (http://www.inventisstrategies.com/mo2.html) we can help your company engage with customers to identify new products or markets for growth, or even help them optimize their growth with their existing products in their existing markets. Through our Growth Strategy Action Workshop (http://www.inventisstrategies.com/gsaw.html) we can help your company identify the growth options that have the best odds of success and develop action plans to start executing on those options immediately.
If you are interested in learning more about how we can help your company grow through new products and markets, or through stronger penetration in your existing market, or just want to talk about what Enterprise Car Rental did with this new product, don’t hesitate to e-mail me at email@example.com. I always enjoy a good conversation about growth strategy and new products.
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