Hertz And The Path To Greater Profitability

Dave Byrne / January 2016

Hertz developed a new marketing KPI, which allowed them to gain increased insight into the success of their business and where they should focus their marketing efforts.

As part of its digital transformation plan, Hertz needed to identify a set of KPIs to maximise vehicle utilisation where and when needed, and ultimately boost the profitability of search. Hertz worked with Google to create a detailed attribution model for its marketing channels, and data drawn from this model led the marketing team to focus on revenue per unit (i.e. revenue per car rental in Hertz’s case) as an appropriate metric. Previously, Hertz had taken an ROI based approach to its marketing effectiveness. However, adopting revenue per unit as a KPI aligned the marketing team’s objectives much more closely with those of other key departments within the business.. The KPI adjustment provided increased visibility, allowing Hertz to confidently optimise its marketing budget.

Guided by the goal of increasing revenue per unit, the marketing team could make smarter decisions on where to allocate budget and adjust bids for channels including email, video, affiliate marketing, paid search and programmatic display ad impressions. For instance, the team focused on the needs of specific locations that were experiencing below average utilisation rates over a specific time period. . Using search to drive incremental demand for these sites, Hertz was able to get more cars on the road and increase revenue per unit. By framing the challenge this way, Hertz took a positive step towards performance measurement beyond ROI.

To test out the new approach, Hertz identified 10 pick-up locations and implemented a contextually based search strategy, taking into account location and a tightly targeted audience. It increased its bids on relevant search terms, supported with increased budget, and saw an increase in both traffic and rentals. If the team had simply emphasized ROI for each pound of marketing spend, Hertz would not have spotted the low performing sites and opportunity areas. The trial results were impressive. Utilisation figures for the vehicles in the test increased when compared to both pre-test and year-on-year figures.

The tests also showed that an upweight in search helped drive business at periods of lower demand, such as weekends, at the low performing car rental sites. Trial locations enjoyed a lift in bookings on Sundays thanks to relevant messages being served at the moments that mattered to potential customers. The trial also provided other useful insights to steer decision making, such as the key source & destination search corridors that drive traffic into the UK.

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