Enterprise Rent-A-Car: Measuring Service Quality

Synopsis

Kevin Kirkman receives a Service Quality Survey in the mail from Enterprise Rent-A-
Car. Kevin had been involved in a wreck earlier in the month and had rented a
replacement car from Enterprise while his car was being repaired. Enterprise routinely
surveys one of each 20 customers about seven days following completion of a rental. A
case exhibit presents a copy of the Enterprise survey form. Enterprise used the survey to
determine the percentage of customers who were completely satisfied, which produced
the Enterprise Service Quality Index (ESQi) for both the company and for each
individual branch.

Enterprise has become the largest rent-a-car company in the United States by targeting
the local replacement market and maintaining a laser-like focus on customer service and
satisfaction.

However, top management wanted to take its customer satisfaction program further by
using the ESQi into account in promotion decisions. To do so, however, managers
believed they needed to improve the response rate and timeliness of the information.

Discussion Questions

1. Analyze Enterprise’s Service Quality Survey (Exhibit 1). What information is it

trying to gather? What are its research objectives?

The questionnaire begins with a summary question that asks about the customer’s
overall satisfaction and then asks an open-ended question as to how it could have
improved. Then, the questionnaire takes the respondent through the rental
process on a step-by-step basis. It is important to point out to students that
service quality is determined at each step in the process and Enterprise is
measuring quality at each step in order to determine where any problems may
have developed in that process. Note, for example, that question 8 asks how the
customer rates the Enterprise employee who handled the paperwork at the
beginning and end of the rental process, realizing that in all probability a
different employee would have been involved at each time. Notice also that only
two questions at the end of question 8 (mechanical condition and cleanliness) and
question 9 (did you get the type of car you wanted) deal with the car itself. The
rest of the questions deal with the service aspects of the rental and with overall
satisfaction.

Question 10 asks why the customer rented the car, helping Enterprise track which
market segments it is serving.

Question 11 is arguably the most important question. Question 1 addressed

overall satisfaction, but the real question is how likely the customer will be to
 rent from you the next time. A person could be satisfied with the past rental but
not willing to rent from your firm, perhaps assuming that he or she might be more
satisfied with a competitor next time. Or, perhaps the customer was just trying
your firm and has other experiences with which to compare the experience with
your firm.

The final two questions try to determine how much experience the customer has
with Enterprise and with rent-a-car companies in general. So, Enterprise’s
research objective is descriptive. It is trying to describe/determine customer
characteristics and attitudes toward the overall service experience and specific
steps in that process. Students will note question 3a that deals with whether or
not the customer experienced problems with the rental process and what
happened. Market research shows that many customers do not complain when
they have a problem. They simply find somewhere else to do business next time.
Enterprise’s Service Quality Survey is an attempt to be proactive in soliciting
complaints/problems/suggestions, realizing that unless a company does
something like this survey, it may not find out about serious service problems.
2. What decisions has Enterprise made with regard to primary data collection—
research approach, contact methods, sampling plan, and research instruments?

Research approach: Enterprise has decided to use the survey approach that the
text says is the best way to gather descriptive information. The text indicates that
survey research can be flexible, quick, and can be at a lower cost than
observational or experimental research.

Contact method: Enterprise is using the mail method to contact customers as

opposed to the telephone and personal methods. The text indicates that this
method provides poor flexibility, speed, and response rate but excellent control of
interviewer effects, good cost, quantity of information, and fair control of the
sample. The instructor can use this part of the case discussion to point out the
tradeoffs that companies make when they select one contact method over the
others.

Sampling plan: Enterprise has decided to use a simple random probability

sample with each customer having a 1-in-20 chance of selection. The customer is
the sampling unit. We don’t know how many customers Enterprise has, so we
cannot know the sample size, but we can assume that the company has selected
the 1-in-20 rule because it provides a large enough sample given predicted
response rates so that it has a statistically valid and reliable sample.

Research instrument: Enterprise has selected the questionnaire with primarily

closed-ended questions.

3. In addition to or instead of the mail survey, what other means could Enterprise
use to gather customer satisfaction and other information about its customers and
competitors?
Enterprise has decided to mail a questionnaire to selected customers about a
week after the end of the rental, assuming the experience will still be fresh on the
customer’s mind and the customer will have time to complete the instrument.

Students may suggest a number of other possibilities. Some will suggest that
Enterprise could put a survey form in each vehicle so that people experiencing a
problem could record/report it while it was fresh on their minds. They could mail
these in or turn them in when they return the car. Perhaps, people might be
reluctant to hand the forms to someone about whom they might be complaining.

Other students will suggest that Enterprise employees could hand the customer
the questionnaire upon return of the car and ask the person to complete it then or
to complete it later and mail it in. Enterprise apparently thinks that customers
may be too busy or rushed at this time to ask them to take the time to complete the
questionnaire. This is an assumption, however, and something the company could
test.
Enterprise could also have employees or an outside firm telephone customers
following a rental to ask the same or similar questions. As the text suggests, there
are some positive aspects to the telephone method, but it can be relatively
expensive and carry interviewer effects. Furthermore, people may be reluctant to
answer many questions over the phone and may not be comfortable reporting
problems and complaining to another person.

Creative students can suggest that Enterprise could also use observational
research. For example, it could have researchers sitting in its rental offices who
watch and evaluate the rental process. If employees are aware of this, as they
would have to be, however, one is not assured that one is observing “normal”
behavior. To solve this problem, Enterprise could have an independent firm’s
employees go through the rental process and then report their findings. Such
“secret shopper” programs are common in retailing. These efforts are good for
evaluating the rental process, but do not get at customer satisfaction.

Students can also suggest that Enterprise consider focus groups. It could recruit
focus group participants from recent customers and have a facilitator conduct
focus group interviews on the rental process and customer satisfaction. The value
of such groups is that they allow the facilitator to pursue topics or points that
might come up during the discussion that cannot normally be pursued in a survey.
The participants may raise a topic that Enterprise had not considered and thus
would not include on a survey. Yet this topic might turn out to be important to
customers.

Enterprise could also have a toll-free telephone number displayed in its offices
and in its cars that encourages customers to call with complaints/suggestions at
any time.
4. What specific recommendations would you make to Enterprise to improve the
response rate and the timeliness of feedback from the process?

Given the discussions above, students will have a number of suggestions. As to

the current survey, they may suggest that it is visually complex and looks like it
would take a long time to complete. This may discourage customers from
responding. Students may suggest that Enterprise develop shorter survey forms.
One form might focus on overall satisfaction measures along with the open-ended
question. Another form might focus on the rental process. Enterprise could
alternate between the two forms or it could increase its sample size, developing a
sample for each form.

As to speeding up the process, students should have noticed in the text that
telephone surveys and online surveys are rated as excellent in terms of speed.
One possibility would be to have the outside firm telephone the selected
customers rather than relying on the mail. Telephone surveys produce potential
interviewer effects, of course, as noted in the discussion of question 3, but they
also provide an opportunity for a skilled interviewer to pursue other lines of
questioning if they develop. One problem with the telephone survey is simply that
there are more and more telemarketing calls. Many consumers are reluctant to
talk to anyone who may be perceived as a telemarketer.

A second method of speeding up the process would be to develop a customer

feedback area on the company’s Web site. Customers could be given a feedback
request card when they completed the rental and encouraged to go online to
provide the feedback. Although being online could provide rapid feedback, this
method, like the mail survey, requires that customers take the initiative to visit the
site and complete the survey. It is not clear that this would help the response rate.
Furthermore, students may note that the company would have no way of
identifying who is really providing the feedback.

Students may also recommend that Enterprise implement some of the other ideas
developed in the discussion of question number 3. In this discussion, it will be
important for them to see the pros and cons of each alternative and the tradeoffs
the company makes as it selects one method over another. Students must also be
aware that none of these programs will be cheap. The company will have to
measure the value of the information obtained against its cost.

Enterprise can test any of these proposals by applying them in a limited

geographic area to see how they affect response rate and timeliness before
rolling them out systemwide.

The instructor can also use the discussion to emphasize the point that a company
wants to maximize the customer’s opportunity to complain. Marketing research
shows that dissatisfied customers tell somewhere between 10 and 15 other people.
The company wants to encourage customers to complain so that it can try to fix
the problem and short-circuit the complaints. This argues for Enterprise focusing
on making it easy for customers to complain on the spot, at the time of a problem,
while the customer may be more willing to complain.