Hertz - Service Quality model - oral presentation 23-08-13

Hertz car rental &

Service Quality

•Audrey Jaspart

PLAN

1. Hertz Corporation Presentation of the car rental company Hertz car rental blueprint framework

2. Investigation context Interviewers Significant trends in the car rental industry in Ireland

3. Hertz - Service Quality Gapsa. GAP 1: Knowledge Gapb. GAP 4: Communication Gapc. GAP 5: Perceptions Gapd. GAP 7: Service Gap

4. Conclusion

Hertz CorporationPresentation

Hertz presentation

The Hertz Corporation (also called Hertz) is a subsidiary of Hertz Global Holdings Inc

150 countries

8,860 corporate and licensee locations

The largest company in the sectorSince 1918

Turnover: $7,633.0 million (car rental)

Hertz Report 2012

Hertz presentation

The company is engaged in car rental and equipment rental business

There are two main types of customers: - Customers who rent for leisure (45%)- Customers who rent for business (55%)

The rental location is also a key point of Hertz: airport and off-airport

Hertz agencies localization in Ireland

Hertz and the use of new technologies

• Major player in the use of new technologies

• The company has set up terminals reservation, e-receipts, Smartphone applications...

Hertz car rental blueprint framework

Investigation context

Interviewers

Mrs. Hayley Murphy, HR Consultant, Hertz Europe Service Centre

Mr. Joffrey Kropfinger, Hertz Sale Representative, Ireland

Two Hertz agencies in Dublin (Ireland):• Hertz - Dublin Airport• Hertz - 151-157 South Circular Road, Dublin

Significant trends in the car rental industry in Ireland

• Car rental market remains extremely fragmented in Ireland having 64% value share in 2012

• Hertz Ireland and AVIS Ireland both have the largest value shares at 10%.

• BUDGET (company) car rental Ireland also had a good market share of 8%.

Hertz Service Quality Gaps

Customer experience relative to expectations

1. Knowledge Gap

2. Standards Gap

3. Delivery Gap

5. Perceptions Gap

7. Service Gap

Customer needs and expectations

6. Interpretation Gap

4. Communication Gap

MANAGEMENT

CUSTOMER

4.

Customer perceptions of service execution

Management definition of these needs

Translation into design/delivery specs

Execution of design/delivery specs

Advertising and sales promises

Customer interpretation of communications

Service Quality Gaps

Knowledge Gap

Key factors and main goals

We can identify 4 key factors responsible for provider gap 1 :

=> Inadequate marketing research orientation

=> Lack of upward communication

=> Insufficient relationship focus

=> Inadequate service recovery

The main goals of the Gap 1 are :

=> Understand customer expectations

=> Improve communication between frontline staff and management

=> Turn information and insights into action

First issue for the knowledge gap

Issue: Lack of upward communication

• Managers and employees don’t communicate about customer expectations

• Too many layers between contact personnel and top management

• Lack of interaction between management and customers

Recommendations for the lack of upward communication

Executive and management listening to customers

Executive listening approaches to employees

Employee suggestions

Second issue for the knowledge gap

Issue: Inadequate service recovery

• Recurrent customers complaints : often the same complaints

• Failure to make amends when things go wrong

• No appropriate recovery mechanism in place for service failures

Recommendations to have an adequate service recovery

Act quickly

Cultivate relationships with customers

Learn from lost customers

Third issue for the knowledge gap

Issue: Inadequate Marketing Research Orientation

• The company is too focused on service quality and customers expectation

• Hertz is not enough focused on what customers think about the company

Recommendations to have an adequate Marketing research orientation

Critical Incidents Studies (CIT)

Lost customer research

Futures expectations research

Communication Gap

The Services Marketing Triangle

Grönroos (1990) - the Services Marketing Triangle

Hertz

Hertz Marketing – Communications Strategy

Hertz has embraced the concept of Integrated Marketing Communications- To have a long term communication with the customer

ISMC : Integrated Service Marketing Communications

Television commercialsE-mail, travel magazines…

Social Media,Website…

Notify phone

Social Media Strategy

That Hertz does well to support the Service Quality

Use of tangibles evidences in advertising

Building a quality relationships service by encouraging employees to be efficient

Meet customer expectations thanks to the service provided by employees, the service process and the decor in agencies

A services branding Model. Source: Berry, L.L. (2000)

First issue in Hertz communication

Issue: Inadequate horizontal communications

- Insufficient communication between sales, operations and advertising - Marketing department that makes promises and sales- reservation departments and agencies which deliver the service are completely independent

Hertz should improve the communication inside the company between the different departments

Second issue in Hertz communication

Issue: Overpromises in advertising and communication

The availability and range of cars are not promises that can be hold by all agencies and for all rental periods

1. To make realistic promises

2. To teach customers to avoid peak demand periods

Perceptions Gap

Perception GAP

• GAP 5: Between a customer’s perception of a service experience and service delivery

Perception: cognitive impression that is formed of “reality” which in turn influences the individual’s actions – AMA, 2009

Hertz promises

Two main promises• Attractive price• Wide range of vehicles

Three other promises• provide usable and maintain vehicles• pleasable and clear reservation experience• full support of the customer

Feedback questionnaire and claim management allow the company to measure customer’s satisfation

Identifying perception gap in Hertz

In order to identify the potential perception gap we need to study customer’s feedback customer’s opinions on forum

Five main issues linked• to vehicles’ condition • to stock management• to staff’s behaviour• to claim management• to price

Recommendations

Perception gap would lead to bad publicity from customers, direct and wrong consequences on the image’s enterprise, and loss of potential and actual business

Hertz need to • inform the customer all along the service process• provide physical evidence • educate its customers

In concrete terms• remind the conditions of the contract, especially price and characteristics of the vehicle • stay careful about employees’ behaviour offer them training• improve its soft management software• improve its claim management

Service Gap

Hertz Marketing – Customer GAP

Consumer has become increasingly demanding and expect high quality customer service

• GAP 7: Between a customer’s perception of a service experience and service expectations

Customer’s expectations: what the customer expects and influenced by word of mouth, personal needs, past experience…

Customer’s perception: It is derived from the customer’s satisfaction of the specific product or service and the quality of service delivery.

Company Rating

• To evaluate the consumer GAP: analyse 5 different websites of consumers feedback• The advantage: only truth opinions of the customers

Maximum of stars satisfaction: 2

Customers feedback

Customers feedback

Customers satisfaction

1 star2 stars3 stars4 stars5 stars

2.5 7.5 12.5 17.5 22.5 27.5 32.5 37.5 42.51 star 2 stars 3 stars 4 stars 5 stars

Satisfied customers 50 reviews

42 4 1 2 1

424

12

1

CUSTOMER SATISFACTION OF HERTZ SERVICES

84%

8%

2%4% 2%

1 star2 stars3 stars4 stars5 stars

RANKING OF 50 REVIEWS

Analyse of: • 50 first customers feedback • 5 websites • Different countries

Results:• 84% customers: unsatisfied• 8% customers: a bit satisfied• 2% customers: satisfied• 4% customers: good satisfaction• 2% customers: Very satisfied

Recommendations

• Understand customer needs and knowing customer expectations.

• Keep promises and provide the same products or services mentioned in advertising

• Make gesture of goodwill to customers

• Launch mystery shopper waves to improve the results of Hertz in welcoming customers

• Constant customers-feedback should be taken, including evaluation of the quality by a questionnaire

• Prompt response to customer request, and sincere interest in problem-solving

Conclusion

Conclusion

Hertz is the leader on car rental service’s market However, gaps are existing concerning knowledge, communication, perception and service.

Hertz needs to improve its Service Quality in order to:- be much more efficient - stay the number one in car rental service

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SOME QUESTIONS ?

Thank you for your attention