CRAC maintains a unique selling proposition in the rental automobile industry, describing its greatest idea [as] personal

service. This proposition

is built into every facet of ERACs operations, from point-to-point car delivery to a 427,000 rental-vehicle fleet. This is clearly seen in President Andy Taylors welcoming message on the companys Website(www.enterprise.com) They say the greatest ideas are the simplest ones. Theyre right, and our greatest idea was personal service. It was so easy because it simply required people to act like people. To treat people in a business environment the way youd treat them if they were your neighbors. You see, our business has been shaped by this very concept. Treating our customers like good friends and neighbors has enabled us to grow to a point where our automotive operations gave annual revenues in the billions, a fleet of cars and truck numbering hundreds of thousands, and thousands of employees-each dedicated to providing personal service.

Enterprises rent-a-car began life in 1957 as a leasing company in ST. louis, Missouri,with a fleet of 17 cars. Founder Jack Taylor soon found that his customers needed short term rentals to cover times when their leased vehicles were in for maintenance or repairs. Although it was a relatively successful operation, it wasnt until the 1970s that the business took off. That was when a court rung casalty insurers liable for an insured motorists loss form being without a car. ERAC became a major player almost overnight, and rapidly grew to a 10,000 venhicle fleet by 1977. By 1993, ERAC began serving Canada and competing internationally.At this time ERAC had more than 200,000 units covering 1,500 locations.Overseas expansion continued in the united kingdom a year later, bringing 2,500 locations. Today, ERAC operates more than 4,000 offices in the United States and 300 offoces in canada and the United Kingdom. The company has a worldwide rental fleet of more than 500,000 vehicles and annual revenues of $4.73 billion.

Now that ERAC has become the industry leader in terms of fleet size and market presence, management faces the challenge of maintaining its performance level as the compants domestic markets approach saturation.

Service concept

Andrew Taylor, the current CEO and son of the founder often says,my father instilled his business philosophy in me, and its very simple. When my father started the business, he said that you put customers first because if they are satisfied, theyll come back. Then come the employees. By making sure they are happy, well informed, and part of a team atmosphere, they will provid the best service. If you put the customers and the employees first the bottom line will happen. Enterprise claims to offer the perfect rental package,as symbolized by its now-famous wrapped car. The focus is on three key benefits for the customer: 1. Extraordinary convenience in the from of nearby locations and picking up and dropping off customers at their homes, offices, or repair shops free of charge . 2. Excellent rates made possible by the operating strategy. 3. Exceptional selection of vehicles with something for every occasion. From the first days of the rental business, ERACs market focus has been on the local rental segment rather than following the suits&shorts empnasis on the business and oliday segment of the established players. This hometown rental market now includes the replacement segment (i.e.,customers who need a car because of an accident, routine maintenance, or theft) and the discretionary segment(i.e.,short business and leisure trips and other special occasions). ERAC relied on the pickup and drop-off components of its service to help set the company apart from the competition. This focus on convenience is now facilitated by a network of offices located within 15 minutes of 90 percent of the u.s. population.

Although ERAC has recently begun to take on the commercial maiket, the company maintains no on-site airport locations. Consisent with its original market focus, customers are picked up and taken back to the office to settle the paperwork and take possession of the car. Still, according to Taylor, the focus is on the customer:After all, other companies rent, lease and sell pretty much the same cars as Enterprise. The difference is , their business is cars and ours is people, which explains why so much of our energy goes into recruiting,hiring,and training.
Culture A combination of unusual hiring practices and relatively strict promotionfrom-within drives the companys culture. Virtually every employee is a college and, according to the Cable News Network, in 1996 ERAC was one of the top four recruiters of college graduates in the United States. This factor is out of sync with the labor-intensive car-rental industry that seeks to keep employee wages of a unionized workforce low.

The recruiting itself is rather nontraditional, also. Brainy introverts need not apply, says Donald L Ross, ERACs chief operating officer. We hire from the half of the college class that makes the upper half possible, he adds wryly. we want athletes, fraternity types especially fraternity presidents and social directors. People people. The company finds that social directors make good salespeople because they are more readily able to chat up service managers and to calm someone who has just been in a car wreck.

The focus on athletes also has a noticeable impact on the companys because it fosters a competitive atmosphere to go along with the emphasis on teamwork. Starting pay varies around the country, and ERACs reward system feeds this competitive drive as employees dont receive regular pay raises. They are compensated in part according to the profit earned at their particular location. Financial results by location and region are made available for everyone to see, which further fuels the competition.

The bottom half of the class also tends to bring a work ethic akin to zeal of a reformed smoker, because its alumni have been sobered by a scarcity of career opportunities. Jeffrey M. brummett, vice president for daily rental operations and a onetime semipro baseball plays, comments, nobody ever went to college planning to go into the car rental business [an often repeated comment among Enterprise employees.] then a time comes when thats the opportunity that presents itself, and you grab it.

New management trainees are welcomed by long grueling hours, during which they spend most of their time cleaning cars and shuttling vehicles to customers. Still, almost every employee, including top executives, start this way. Conscious of the bond this creates, senior officers routinely get involved in the dirty work, and even CEO Andy Taylor uses a vacuum. we were visiting an office in Berkeley and it was mobbed, so I started cleaning cars, he says. As it was happening, I wondered if it was a good use of my time, but the effect on morale was tremendous. Still, many quit after just a few weeks. At the corporate level, Taylor leaves many of the decisions to Donald L. Ross, senior executive VP and COO, and to William F. Holekamp, executive VP. Ross and Holekamp serve as role models for new recruits, as both men started by washing cars and serving customers. In time, each decided to take the risk and open an ERAC office in a new location, and their success with these operations proved that they could help guide the company, according to Taylor philosophy.

Growth ERACs focus on the local market continues to pay off as it takes an i ncreasingly larger share.While the airport market has grown annuall y at about 3 to 5 percent, the local market has grows at 10 to 15 per cent.According to Jon LeSage,managing editor of Auto Rental News, the local car rental market is a lot more significant than the public w ould assume.The real growth in this business is going to be in the lo cal market. ERAC will likely continue to benefit from this growth,becausethe co mpany has so many rental locations spread around the country.CEO Taylor sees no sign of a slowdown.Moreover,the company has grown at an annual rate of more than 20 percent for the past several years . Two income families also are helping to drive the market:when both partners of a couple work, each depends on his or her car,and when one of the cars falls out,ERACs lower price makes it a natural choice .Moreover people are renting from ERAC even when the falily car re nts just fine. We call it the Virtual Car.Small business people who h ave to pick up clients call us when they want something better than their own car.So do people who have to take a long trip and do not t rust, or just do not want to use, the family carsays Taylor.

A new office is opened usually as soon as adiacent offices have reac hed a 100 vehicle inventory.After a new office does open,employees ove into the surrounding community to develop relationships with th e service managers of every good size repair facility in the area ERA C knows that the recommendations of service managers carry a gre at deal of weightwith repair customers who are busy dealing with co nfusion of the moment. It has become a national Wednesday r-itual f or ERAC employees to bring pizza and doughunts to workers at near by garages. Indeed, a large portion of recent growth has come from auto dealers who offer customers a free or cheap replacement while their cars ar e in the shop.ERAC has agreements with many dealers to provide th ese replacement vehicles,but at major accounts,ERAC staffs an offic e on the premises for several hours a day and keeps cars parked out side.According to one Porsche,Audi,and Rover dealer in Long Branch ,New Jersey:The Enterprise people are practically part of my staff.