Key Lessons in “Driving” Customer Loyalty


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You might not know “Jack”

Literally and figuratively. So let me introduce you to him. Part of our greatest generation, Jack turned a small business in the basement of a Cadillac dealer into the world’s largest car rental company. Jack Taylor built that business on the back of a simple philosophy for long-term growth:

“Take care of your customers and employees and the profits will follow”

Jack Taylor served as a naval aviator in World War II, flying F68 Hellcats in the South Pacific. The name of his company? The same name as one of the aircraft carriers he flew combat missions from. That ship was called the USS Enterprise, nicknamed “The Lucky E“. The Enterprise was the most revered and decorated ship in World War II.

Enterprise Jack Taylor

A fledgling St. Louis startup with 7 cars and Jack’s $10,000 investment, Enterprise Holdings now consists of Enterprise Rent-A-Car, National Car Rental and Alamo Rent A Car. The combined company boasts a fleet of 1.3 million vehicles and is worth billions with a capital B.

The Apple Doesn’t Fall Far from the Tree

andy taylor enterpriseJack founded the company in 1957. His son Andy joined the company in 1973. If Jack gave birth to the company and oversaw its early growth, Andy stepped in during its teen years and steered it through major growth into maturity. Jack made service the mantra of Enterprise, but Andy found a way to differentiate it and quantify it. Let’s examine both:

We’ll Pick You Up

One of the things that sets Enterprise apart from competitors is its number of in-town branches. Convenience given their scale is a major differentiator. Call it the “Wahlgreens Effect” (75% of the US population lives within 3 miles of a Wahlgreens.) Enterprise takes that level of convenience one step further by picking up customers. It’s become the calling card for the brand. It also is an interesting case study for both innovation and taking care of your best customers.

In the 1970?s Enterprise began to create partnerships with local body shops. These shops were a major referral source. People needed rental cars when their cars were in the shop. These body shops were a golden goldfish, representing a small percentage of customers and a major source of profitability for the company. The challenge was that in many cases the ultimate customer didn’t have a way to get over to Enterprise once they dropped off their car.

Body shop managers would often call Enterprise asking for pick-ups. One of the branch managers decided to oblige, even though it was technically against corporate policy. This innovation came from the field and not from HQ. But give Enterprise credit as they quickly adopted the practice system-wide:

Driving LoyaltyIn the words of Kirk Kanzanjian is his book Driving Loyalty, “The company quickly realized that this personalized shuttle service had two big advantages. It allowed the company to stagger customer arrival times at the branches, since the pickups had to be scheduled in advance. It was also a perfect way to build rapport and demonstrate service above and beyond what customers could get anywhere else, even before the rental transaction commenced.”

Enter ESQi

For the first three plus decades of Enterprise, the company never tracked performance against its mantra of “taking care of customers.” It wasn’t till 1989 when Enterprise launched its first national TV ad. Wanting to gauge the effectiveness of the ad with its customers, the company commissioned surveys. The results were disconcerting. Complaints of dirty cars, late pick-ups and shoddy service surfaced. Enterprise wasn’t living up to its own expectations. Andy and the team took the bad medicine seriously. Soon a team was established to formalize a measurement process.

They say pioneers get all the arrows. The team muddled through a number of variations with little success. Response rates hovered around 25% and employees were skeptical about the numbers. The team pushed forward until they found the secret sauce. Enterprise calls their measurement system ESQi. It stands for the Enterprise Service Quality Index. Here are the ingredients:

Don’t do it yourself – Enterprise uses a third-party

Make the scale simple – using a basic 5 point scale (5= Completely Satisfied, 4= Somewhat Satisfied, 3= Neither Satisfied or Dissatisfied, 2= Somewhat Dissatisfied, 1=Completely Dissatisfied)

Reach out and touch someone – switching from e-mail to phone brought response rates up to 98%.

Do it quickly – call are made between 24-48 hours after the rental.

Make it easy – questions were reduced from 18 to 2. An average survey call takes less than one minute for customers.

Do it continuously – this isn’t a once or twice a year thing. Enterprise surveys about 5% of its customers on a rolling basis.

Close the loop – Dissatisfied customers are asked if they are open to follow-up by a branch manager. 95% agree to a call.

Make it transparent – Numbers are published for every branch and are open for everyone to see.

Don’t let it be gamed – Any effort to game the system is grounds for immediate termination at Enterprise.

Put your money where your mouth is – Only branches who finish in the Top 50% are eligible for promotion.

Managers at Enterprise live, eat and breathe service because of ESQi. The branches receive their rankings monthly. But how do they motivate their teams? In the words of Fred Reichheld, “Getting the right people on board—and then all enthusiastically pulling in the right direction—has bedeviled organizations since the time of wooden ships, when the most popular form of motivation left lash marks.” Enterprise keeps it top of mind with employees through branch meetings called The Vote. At these weekly meetings, employees share customer feedback.  According to Reichheld and Paul Rogers in HBR, “Team members hold an open discussion and rank one another on how well each has helped to create outstanding customer service. This personal accountability for team success has led to higher ESQi scores.”

Spawning a Movement

Enterprise puts loyalty at the center of its culture. In the words of CEO Andy Taylor, “The only way to grow a business is to get customers to come back for more and tell their friends.” Enterprise found that the key to future growth were the number of respondents that were “completely satisfied” because they are the ones most likely to recommend.

The ESQi model became the foundation for Bain & Company and Fred Reichheld’s Net Promoter System (NPS). Thousands of organizations like Safelite, Rackspace, and Zappos have adopted NPS as a key loyalty metric.

Today’s Lagniappe (a little something extra thrown in for good measure) – I’m an Enterprise guy and true fan of the brand. They were one of my first Purple Goldfish. A month ago I rented a car from Enterprise in Cary. I was heading to Atlanta for a workshop in Buckhead at the ATV. As I was doing the paperwork, I struck up a conversation with Rob. Rob asked what I did for a living. When I mentioned that I write and speak about customer experience and employee engagement, he mentioned the book Driving Loyalty. He then took the extra step to share that he had an extra copy and offered it to me. I gladly accepted and it provided much of the background for this post. Bestselling author Kirk Kanzanjian’s book is a fantastic read and there are a ton of actionable nuggets inside. I highly recommend it for any business owner or manager. Want more background? Here’s Kirk sharing an overview:

Republished with author's permission from original post.

Stan Phelps
Stan Phelps is the Chief Measurement Officer at 9 INCH marketing. 9 INCH helps organizations develop custom solutions around both customer and employee experience. Stan believes the 'longest and hardest nine inches' in marketing is the distance between the brain and the heart of your customer. He is the author of Purple Goldfish, Green Goldfish and Golden Goldfish.


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