ZipCar:
Influencing Customer Behaviour
ZipCar-Introduction
• Car sharing service started in Boston in 1999
• Operated in 21 cities and owned more than 400 cars
• January 2005: 30000 registered members, 1500 new members joined
monthly, new partnerships with universities
• Positioned its service as a low-cost alternative to car rental and
ownership
• To use Zipcar’s services
Join Reserve Unlock Drive
• Reservations could be done through call or via online medium
• Members were provided with Zipcard that unlocked their preferred
vehicle by swiping it over the transponder in the windshield while
providing access to the keys locked inside
Product Information
Zipcar differed from Rental Cars in the following ways:-
• Insurance, Gas, Parking is included in the usage fee of Zipcars
• Zipcar provided routine maintenance for the cars and members who
washed their cars were reimbursed up to $15 and given one free hour
of use
• No Age surcharge
ZIPCAR BOSTON PLAN:
Plan Application Annual/Monthly Discount Balance
Fee ($) Fee ($) Transferrable
Occasional Driving 25 50 (Annual) - -
Extra 50 25 50 (Monthly) 10% No
Extra 75 25 75 (Monthly) 10% Yes
The Problem
Anita Karr
• Zipcar customer lives in Cambridge
• Booked a VW Jetta Jericho which she had to pick up at 4pm
• Needs to pick her sister at 4:30 pm and reach Lupo’s by 6 pm for her
sister’s performance
Sal Fishman
• He has booked VW Jetta Jericho for his personal interview
• Picked up the car at 1 pm and was expected to return it by 3:30 pm
from where Anita was to pick up the car
• Interview went longer than expected and he was not able to return
the car on time
Types of Customer Variability
TYPE CUSTOMERS
Arrival Don’t want service at the same time,
or at times convenient for the
company
Request Ask for a range of things
Capability Vary in their ability to perform tasks
needed to receive service
Effort Expend varying degrees of energy on
tasks needed to receive service
Subjective Preference Have different opinions about what it
means to be treated well
Our case comprises of Effort Variability. Here the performance of one customer
affects the performance of others. It also has impact on service quality and cost.
Trade-Off Between Cost & Quality
Evaluation of Strategies
STRATEGY RECOMMENDATIONS
Classic Accommodation Keep buffer cars of the same
segment requested by customer
Low-Cost Accommodation Keep large buffer time before arrival
and dispatch of cars
Dispatch low priced cars to waiting
customers
Classic Reduction Impose penalties on the customers
who return cars late
Uncompromised Reduction Do customer profiling on the basis of
their past purchases and behaviour,
Reflect on profile of customers while
giving cars
Recommendations
Do customer profiling based on his past purchases (whether he has returned
the car on time) and assign a rating. The penalty should be imposed for late
customers and the his ratings will get dropped. Customers with considerably
low rating will have to pay extra fee for the same car. The rating when fallen
below a threshold value, customers would be denied the car service.
An adequate buffer time should be kept before the receipt and dispatch of
cars. This will provide maintenance time as well as reduced risk of non-
availability of cars for the next customer
If the customer is late and starts consuming the buffer time, an automated
message should be sent through the system to his registered mobile no asking
what would be the expected time of delivery. If the expected time of delivery
outruns the buffer time, the system should generate alerts. In that case,
Zipcar can place an additional minimal inventory of cars to make up for the
next waiting customer.
THANK
YOU
