How Avis Budget Group Uses Data to Drive Its Marketing
March 26, 2014
Avis Budget Group CAR +1.08% has transformed its marketing using data to better understand who its customers are, says Jeannine Haas, its CMO. “Standing apart is difficult in this industry. Rental companies offer similar cars in similar locations at similar rates – and that makes it a very competitive environment. Differentiation and loyalty today is based on customer service and customer experience”.
“We focus on a 360-degree view of the customer by applying a segmentation strategy called ‘customer lifetime value.’ This allows us to look at the relationship not just as a transaction but from a longer-term view as well. And we look for ways to infuse the customer experience with data”, adds Jeannine Haas.
The company had a rich assortment of information sources to integrate. It has records from 40 million customers, collecting data from its rental transaction system, website transactions, and reports that detail what cars customers choose. The data was collected as closed source but the company now considers expanding its data reservoir to open source, Big Data type solutions.
Finding data to analyze wasn’t an issue. How to do this in a structured way was the challenge. At first Avis Budget lacked an organized process and analytics infrastructure to leverage its data assets, to improve marketing ROI and the customer experience and to drive long-term customer value. It created a compartmentalized marketing science organization consisting of specialists focused on customer data integration, another group focused on customer-level performance management and reporting, and an analytics group.
Haas says that using a customer lifetime value model helped Avis Budget begin to wring more value from its data. “These models typically yield three-to-five-year projections. In this case, we were able to project out one year on a rolling basis. We projected how many rentals a customer would undertake in a year and what the profit from that person was going to be. We found it to be a very efficient model.”
The payoff is clear. Understanding the relative value of customers helps to determine the communication strategy and it helps to differentiate customer service solutions.
“Deconstructing the customer lifetime value model, its history and preferences, gives Avis Budget a prediction of rental frequency at a customer level and customer profitability”, adds Haas. “It helps us organize our contact strategy and provides the right context, which in turn increases the effectiveness of our contact strategy.”
The most critical achievement of the project may be the “single view” of the customers it is able to generate. Rather than push streams of data to other applications, information is consolidated into a web-based dashboard that the front-line customer-facing employees can access.
Data influences every decision that Avis Budget makes, from product, to distribution to communications, and it allows the company to customize those decisions. It is amazing when you look at all the warehoused information they have, their ability to combine that data, segment it, analyze, decide which marketing channels to use, and the put it in the hands of front-line employees.
Avis Budget’s new customer-centric infrastructure will continue to evolve as the company anticipates what’s next for the industry. Its acquisition of the car-sharing leader Zipcar offers an entree into this fast-growing segment and serves as a learning opportunity in how to actively engage a different customer.
"How Avis Budget Group Uses Data to Drive Its Marketing. Avidan Strategies, 2014.
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