IEM 4163
ERAC case study ch4
How has Enterprise Rent-a-Car (ERAC) defined its service differently than that of the typical national
car company?
To set itself apart from competitors ERAC offers a “perfect rental package,” which focuses on several
customer benefits:
Convenience
 Locations are strategically placed to be closer to potential customers as an indicator of ERAC’s
“hometown rental” strategy. Most other rental services are close to airports and hotels.
 ERAC will pick you up (a familiar phrase from their ads) from wherever you are to transport you
to the rental lot and will take you where you need to go after you turn in your rental, all for free.
 Locations are sometimes part of airport parking services and partnered with auto dealers and
repair shops, ready to provide cars for those who need them.
 Phone systems allow customers and large clients to easily navigate to information and speed up
processes.
Great Rates
 ERAC offers rates that beat other competing rental companies, often by around 30%.
Large Selection
 The fleet at each location offers around 60 different vehicles to choose from, tempting many
customers to rent more luxurious cars since they are available.
Company Culture
 Virtually every employee is a college graduate.
 ERAC looks for people who are socially inclined, because these people make good salespeople.
 Every employee starts at a low level, and promotion is strictly from within, promoting a sense of
belonging and pride in employees and motivating them to perform well to move up in rank.
 ERAC creates a friendly competitiveness between branches, which promotes teamwork and
improved performance.
What features of its business concept allow ERAC to compete effectively with the existing national
rental car companies?
As stated above, locations are strategically placed to be closer to potential customers as an indicator of
ERAC’s “hometown rental” strategy. Most other rental services are close to airports and hotels. Also,
ERAC “will pick you up” from wherever you are to transport you to the rental lot and will take you where
you need to go after you turn in your rental, all for free. Locations are also sometimes part of airport
parking services and partnered with auto dealers and repair shops, ready to provide cars for those who
need them immediately. Specialized phone systems allow customers and large clients to easily navigate
to information and speed up processes, and the culture emphasizes treating customers and staff like
family, to ensure future business and dedicated employees. Employees are also hired based on their
“people skills,” in order to help sell rentals and make customers feel welcome.
Use the service profit chain to explain the success of ERAC.
ERAC recruits college graduates with good social skills to be able to make customers feel valued and to
sell rentals effectively.
ERAC supports friendly competition and bases raises on performance of the branch, which motivates
employees to work together to provide great service, in turn raising the profit of the branch.
These employees offer great experiences and service, in the form of free pick up/drop off, treating
customers like family, offering great rates and selection, and making connections in the community.
The customers experience this great combination of services, and are satisfied with ERAC and will return
to spend money and/or spread positive opinions of ERAC. This drives up profit for ERAC and ensures
returning/new customers, growing the company.