Avis Budget Group & 3 Types of Research

By Kathryn Korostoff, Research Rockstar LLC, twitter @ResearchRocks

Speakers: Jeff McKenna from CMB and Becky Alseth, Avis Budget Group

Session title, ‘Systematically building strategic insights into the decision-making process.’

The speakers opened with some context about Avis and the car rental market:

  • ??Avis has 80%+ unaided brand awareness
  • ??There are 7 main brands
  • ??The category is very much like buying a consumer good. Every airport has a row of brands from which to choose’similar to looking at a grocery store shelf.
  • ??In the car rental business, having a reservation does not mean you have a sale. A lot of people will make 3 reservations for a single occasion! So 30% of reservations are not completed.
  • ??Car rental customers are promiscuous (this point was accompanied by an amusing picture of the Jersey Shore cast).
  • ??Brands can’t differentiate by car model. The rental companies usually have the same or similar car models.

But as the Avis speaker points out, there is always opportunities to change a category, to find a new opportunity’if you just think about your consumer. Zipcar’s phenomenal entrance shows us that!

Also, Avis had acquired Budget’so they need a two-brand strategy that worked.

So what makes research successful at Avis? Three key points:

  1. 1. Align insights with business objectives.
  2. 2. Find the right customers.
  3. 3. Ask the right questions. Quoting the infamous Henry Ford quote :If I asked people what they needed, they would have said faster horses.’ That’s the wrong question.

Research Process

Avis and CMB have had three key areas of research, building over 7 years:

  1. 1. Segmentation
  2. 2. Lost Rentals
  3. 3. Voice of the Customer

While this sounds like a lot, Becky says that Avis is actually doing fewer, better studies’and then repeating them.

(As an aside, they refer to researching lost accounts. But weaving this with Dan Heath’s keynote, I wonder if they also look to study the ‘bright spots’ that Dan referred to).

Segmentation Results

Defining the scope of the research required careful thinking: are we focused on occasions or people?

The segmentation revealed 7 groups, varying on price, services and products. For example, ‘Car Enthusiasts’ ranked higher on the Products axis. Car enthusiasts are also willing to spend much more, so Avis now gives them access to a ‘Cool Car’ program.

Lost Rentals Results

This research measures the number of times customers have rented with Avis, and in total (so including competitors), which allowed them to group types of renters:

  1. 1. Those with no primary preference for Avis
  2. 2. Those that prefer Avis’but for business only.
  3. 3. Those that prefer Avis’but for personal only.
  4. 4. Those that prefer Avis’but for both only.

For example, turns out there is a big group of people who are loyal to Avis for business, but not for personal. But even from this group, there are 2.3 million lost rentals (although this was unclear if this was for a year or other time frame of measurement).

The analysis also show how these groups vary by brand switching’and to which brands.

Not surprisingly, the reason for switching is most often price.

VOTC Research Results

In the past year, over 800,000 people have participated in the VOTC research. Many are repeats, so they can track changes over time.

While traditional VOTC research displays a lot of data, they decided to symbolize the data with green happy faces, red sad faces, yellow moderate faces. Using pivot tables in Excel, CMB built a tool that allows Avis to see the happy face results by location, day, or even filter by keyword. Visually, it looked a bit busy to me, but it does allow a user to quickly glance and see’one a given day’did we have a lot of red? And then click on each sad, red face to see the individual scores. The key is actionability: The quick visual/color patterns makes it easy for them to spot a bad day at a specific location’and find out why.

BTW’Avis ties peoples’ compensation (even counter people) to the scores. When a low score is entered, a dialog box opens up for the customer to add comments. And even counter employees are held accountable. Site managers have 24 hours to respond to complaints, and if they don’t, their boss knows.

Session Summary

  • ??Market research must tie back to business objectives.
  • ??The results need to be able to sell a wide array of internal clients.
  • ??Asking questions and presenting results in a way that everyone can understand is critical.

In her conclusion, Becky enthused about the importance of socializing research, ‘Before I came to Avis, the researchers kept research in their file drawers. Now, they are all on shelves, indexed, and accessible.’