Zipcar: Influencing Customer Behavior

Zipcar: Influencing Customer Behavior

Introduction

Zipcar started its business in 1999 in Boston. It provided a car sharing service to members who had to pay an annual fees plus fees based on mileage and time. There business plan was quite successful and they subsequently owned more than 400 cars by 1999 and expanded to around 21 cities. By 2005, it was the largest car-sharing business in the United States with over 30,000 registered users. The reason for this exponential growth was its partnership with universities in 2004.

After initially offering sedans and compact cars, they started to offer luxury cars such as BMW's and Civic's. This move proved to be successful as the demand for luxury cars increased due to the low cost of renting them.

Registering registered was quite simple as the process was online. Fees included $25 to check the drivers license, &100 deposit which was refundable, and annual fees which carried from $50-$250 depending on the type of plan. The reservation process was also simple as users had to just go online and make a reservation of make a call a few minutes in advance.

Decision Makers

The only person who has authority to make major decisions is the CEO if the company. Before he makes any decision he conducts meetings with managers from every department in order to ensure that the decision is based on the company's business plan.

This case is being approached as an outside consultant who has no prior experience of working or studying this company.

Problem Statement

Zipcar provides a car-sharing service to people across the United States. Their business has been very successful with the number of member increasing exponentially. However, they are facing a problem with late return of their cars. Due to the high demand for their cars, reservations are made on a tight schedule. For example if a car is supposed to be returned at 3:30, another customer is supposed to pick it up at the same time. Even the slightest delay can cause inconvenience to the customers.

Alternatives

A few alternatives are suggested in order to improve the operations of the business.

Alternative 1: Discount on Timely Return

A small discount should be given to members who return the car on time. This will ensure that the cars are returned on time as well as help to build a strong and long lasting relationship with customers.

Alternative 2: GPS Tracking

The second alternative is to track each car using ...