Times are changing in the rental vehicle business. Frank Thurman, corporate vice president of marketing at Enterprise Holdings, fields some questions from Marketing Daily on the subject.
What marketing challenges are you facing in light of increased competition from peer-to-peer providers—and how are you responding?
The car rental industry is, and always has been, highly competitive. We have responded to industry changes before, and we will continue to do so as this dynamic business evolves. Our digital platforms, increasingly connected fleet, more and more autonomous features, and rapidly changing in-vehicle technology expose our consumers to the newest and most innovative technologies.
How has marketing rental cars changed over the years?
When Enterprise was founded, we grew by word of mouth. That’s when we learned there’s no better marketing than a completely satisfied customer.
Later, we got into print, radio and, of course, running commercials on TV. Our TV commercials are still a pillar in our marketing strategy, used to drive top-of-the-funnel awareness of our brands.
The digital world has increasingly become the place where we reinforce our brand messaging and drive customers to our websites and apps. Everything from search to social media to interactive display ads—our digital footprints—helps us reach our customers and really complements our traditional television advertising.
And, now with Smart TVs, we can even target interested customers directly so that our message is more relevant. Targeted TV is only in its infancy, but we are already experimenting with the medium.
Peer-to-peer providers say they aren’t rental businesses but merely technology platforms, so why push for regulations that could stifle innovation?
Nearly all car rental companies—self-described or not—use digital platforms to interact with consumers and facilitate online transactions. So that’s really a distinction without a difference. In fact, the New York Supreme Court (Queens County) has already issued a ruling, stating: “This bargain—use of a car in exchange for a fee—appears little different from ‘traditional rental car’ companies, notwithstanding … statements that contrast it with those companies. The Court finds that [the defendant] is in ‘the trade or business of renting or leasing motor vehicles’ as those words are traditionally and plainly understood.”
P2P operators may present themselves as entrepreneurial start-ups, but most are backed by a large contingent of deep-pocket venture capitalists, private equity funding and automotive manufacturers. So why are so many P2P companies going around and demanding tax breaks and special exemptions from local lawmakers?
Why are peer-to-peer rental companies like Turo sometimes able to offer vehicles at lower rates than other rental companies?
That may be a false premise because most P2P providers don’t provide transparent disclosures about last-minute, end-of-transaction adds or even assurances about safety recalls, so the true cost to consumers can actually be higher.
But, to the extent that they advertise seemingly lower prices, consider that since state laws and regulations are still catching up to this new version of car rental, most P2P providers today do not collect or pay the same state and local taxes, or airport concession fees, as other rental car companies. By skipping out on all these normal costs of doing business, it’s little wonder they can often advertise lower rates.
Many P2P providers have historically and consistently described themselves in their marketing materials and customer-facing public relations strategies as car rental.
And that’s precisely why the City of San Francisco was finally forced to sue a leading P2P company earlier this year. A newspaper quoted the City as follows: “They advertise SFO service and then turn around and say they don’t operate at the airport. Turo’s goal in these tactics is simply to avoid their share of the fees their competitors pay.” I couldn’t have said it any better myself.