Exceeding Customer Expectations

Excerpted from
Exceeding Customer Expectations: What Enterprise, America's #1 car rental company, can teach you about creating lifetime customers
By Kirk Kazanjian

Fifty years ago, when my dad leased his first brand-new Chevy Bel Air to a customer, he had no idea his start-up business would one day be the largest car rental company in North America, and arguably the world. In fact, becoming a big company was never his goal. His plan for success was to focus on a commonsense business approach: Treat your customers well, and give your employees respect and opportunities to grow. You know what? We found that when we did those things consistently, profits and growth naturally followed.

Sounds simple, and it is. But it works very well. By taking exceptionally good care of customers, you earn their steadfast loyalty. They pay us kick by doing business with us over and over again. At the same time, by treating employees like owners and offering them great opportunities - professionally and financially - we not only encourage them to keep customers happy, we give them a powerful incentive to grow the business beyond everyone's wildest expectations.

I know a lot of businesses say they are committed to satisfying customers and developing their employees. But, at Enterprise, we have been fortunate enough to discover some tangible and effective ways to deliver on those commitments. As a result, we have built a successful, last-growing company, while consistently earning high marks for excellent customer service.

Kirk Kazanjian took an interest in our company's story and thought our operating principles would be worth sharing with you. The result is this insightful hook, Exceeding Customer Expectations, which has done an exceptional job of capturing what we like to call "The Enterprise Way." You'll discover how the unique manner in which we run our business has evolved into a winning formula for earning loyal customers, developing and motivating committed employees, and building a sustainable competitive advantage.

These are principles we have learned and refined over the past five decades. We know they work for us, but I believe they can work for you, too. After all, regardless of the product or service you sell, your customers and employees all want pretty much the same things.

I have had the privilege of leading the Enterprise Rent-A-Car team for more than twenty-five years. I am proud to say I had a great teacher - my father, Jack Taylor. Jack was a full-fledged member of the group we now loudly refer to as "The Greatest Generation." A decorated Navy fighter pilot in World War II, he spent part of his tour of duty flying off the aircraft carrier USS Enterprise. That is how our company got its name.

After the war, my father set aside his military accomplishments, returned home, and went to work building a business. He made it a rule early on that he would always enjoy his customers and associates, and he set out to ensure that everyone around him was having fun. In fact, to this day, the first thing he asks when talking with Enterprise employees is, "Are you having fun?"

Jack also discovered that you often uncover your best opportunities for success by listening to your customers. In the beginning, in fact, he did not set out to build a rental car company. Enterprise began as an automobile leasing business with a different name. But over time, his leasing customers would ask for loaner cars while their vehicles were in the shop. Jack listened. And he responded by offering daily rentals.

As it turned out, we wound up creating a whole new segment in the rental industry - convenient, affordable rentals right in the towns and neighborhoods where people live and work. We call in the home-city market, and today it makes up more than half of the nearly $20 billion car rental industry in the United States. We did not get to this point by hiring expensive consultants to map our course. We just developed a passion for nurturing close and enjoyable relationships with our customers, and cultivated a workplace environment in which employees enjoy their colleagues and their work, and are well rewarded for their efforts.

Another valuable lesson we have learned is just how important teamwork is to your success. I go to work every day knowing that I am supported by more than 62.000 incredibly hardworking and dynamic people. Our company would not be the success it is without a culture that treats teamwork as a sacred principle. Each of our nearly 7,000 branches operates as a team. We work and win together, and we reward hard work unlike most other companies in any industry.

Indeed, I do not know of any company with a compensation and operational structure quite like ours. We provide tremendous upside potential for our employees, and we tie career advancement directly to how well our folks take care of our customers. After all, we want employees to go beyond just satisfying customers. We want them to exceed every customer's expectations. That is job number one at Enterprise. If you do not make that happen, you do not get promoted. It is that simple.

Teamwork is not just useful as an internal growth strategy. We have learned that it also pays big dividends when you develop important relationships outside of your company. Nothing illustrates this point better than the productive partnerships Enterprise has with the country's top insurance companies. Unlike other major rental car companies, our rental business did not begin at the airport.

In fact, while the other players were busy building their businesses beside the nation's runways, we focused instead on the nation's driveways. We carved out our own niche - renting cars to people in their hometowns for a variety of purposes. One of the primary reasons folks need to rent a car locally is that their own vehicles are in the shop following an accident. So, for many years, we have teamed up with insurance companies to make the whole process as seamless as possible for all parties involved.

Teamwork in these business relationships means we work diligently to ensure that our business partners and the customers they entrust to us are treated exceptionally well, and we do everything possible to continually give them new, value-added services. In fact, we even came up with proprietary technology to help our insurance partners reduce the number of days a rental car is needed following an accident. You might not think that makes much business sense, since it results in less money per rental for us. But the opposite has been true. When we save our partners money, they bring us more business and our revenues continue to rise.

As I see it, building a successful company with satisfied customers comes down to understanding your strengths and capitalizing on them. Several years ago, I had a chance to meet with EDS founder H. Ross Perot, who knows a thing or two about building a successful business. After hearing about the path we have taken at Enterprise, he looked at me and said. "Andy, you should be a Rhodes Scholar, only you should spell it R-O-A-D-S." He really liked our street-smart approach, including the way we refuse to give up on exceeding customer expectations, even when faced with tough roadblocks.

Like any other company, we have made missteps along the way. But we have learned through all of them. We have learned we cannot be all things to all people, and we are okay with that. Instead, we stay on target and focus on what we do best. It's worked well for us.

My father followed this advice better than anyone. When he was young, he was never a straight-A student. But he knew how people wanted to be treated. He had an inherent sense of how to run a business that he never learned in the classroom. He knew his own strengths and weaknesses, and tenaciously built this company around them. He was a true ROADS scholar.

This book is an opportunity for others to learn from our experiences. Exceeding Customer Expectations is about building a customer-centered business with a dedicated and motivated workforce that is absolutely passionate about seeing their business prosper. It is about folding ways to stand apart from the crowd, even in today's highly competitive marketplace, by focusing on areas that others have ignored. And it is about forming strong business partnerships that can help to propel your business forward.

The lessons and strategies outlined in this book have enabled my father's little start-up to grow into a multibillion-dollar, industry-leading company with tens of thousands of satisfied employees and millions of loyal customers. I hope you see ways to apply some of our hard-earned learning to your own business, and that these lessons bring you as much success and satisfaction as they have brought to the Enterprise family.

Andrew C. Taylor
Chairman and Chief Executive Officer
Enterprise Rent-A-Car

What began in the basement of a Missouri Cadillac dealership some fifty years ago has evolved into one of the greatest modern-day examples of how to deliver excellent customer service while building an incredibly successful business.

As many of its competitors snuggled with declining business, lost market share, and various other financial woes, Enterprise Rent-A-Car quietly grew into the largest and most successful car rental company in America and, by most measures, the world. From an initial investment of $100.000 and just seven cars, Enterprise has become a $9 billion global powerhouse with some 62,000 employees, nearly 7,000 locations, and a combined rental and leasing fleet of more than 800,000 vehicles. It is one of the biggest customers of General Motors, Ford, and several other car manufacturers. Indeed, Enterprise buys more new cars each year than any other company in the world. It's also the largest seller of used vehicles in the country, boasts the highest credit rating in its industry, and consistently ranks among the top twenty on Forbes magazine's annual survey of the largest private companies in America.

Even more impressive, Enterprise operates in an industry littered with countless failures and a reputation for low employee morale, high turnover, bankruptcies, profit declines, and general customer dissatisfaction. Despite this, the company has recorded impressive gains each year for the past five decades. Enterprise has never laid off employees, opens at least one new office every business day, and has become the company to watch and emulate when it comes to learning how to really wow your customers.

How has Enterprise done it? Above all, it adheres to an amazingly simply, yet ingeniously effective, philosophy set forth by company founder Jack Taylor back on day one: "Take care of your customers and employees, and the profits will follow."

Enterprise has an unbending determination to keep its customers happy - whatever it takes. At the same time, it strives to hire the smartest and most talented people possible. Generally speaking, nearly all employees at this family-owned company start at the bottom and work their way up, even though a majority of all new hires are college graduates. In fact, the company's quest for bright, educated people has made it one of the largest recruiters of newly minted graduates in the United States.

Following extensive formal and on-the-job training, Enterprise gives its charges complete autonomy to run and grow their own individual businesses, in turn creating opportunities for continuous advancement. What's more, very early in their management careers, employees share in the company's profitability, meaning the potential upside is theirs to realize. Individuals are empowered to act as entrepreneurs and are compensated accordingly.

People starting out behind the rental counter today can realistically work their way up to a six-figure salary over time by making smart business decisions and directing their own mini division of the company. It's a structure that is almost unheard of in corporate circles, yet it is directly responsible for fueling the company's astonishing growth. Indeed, it was a frontline employee who helped steer the company into the rental car business in the first place, and another who came up with the idea for its now defining "We'll Pick You Up" service.

What Enterprise knows is that in order for employees to provide outstanding customer service, they must be both committed to their jobs and properly incentivized. The two are very closely connected. Mere lip service or orders from on high won't cut it. That's why Enterprise has taken the unusual step of tying promotions - and therefore financial advancement - directly in to how well employees deliver on the company's promise to exceed customer expectations.

Keep in mind that at Enterprise, having "satisfied" customers isn't enough. The reason is straightforward and backed by research: When you exceed someone's expectations and bring them to the "completely satisfied" category, they are at least 70 percent more likely to do business with you again. And repeat business is the lifeblood of every company.

The strategy is clearly effective. Standard & Poor's calls Enterprise the most financially sound rental car company in the industry. In the last decade, workplace surveys conducted in four nations have included Enterprise among the best companies to work for, and its employees are often highly sought by recruiters at other firms - from a variety of industries. What's more, because of the company's unique focus on the last-growing home-city, or off-airport, market segment, its business is nearly recession-proof.

Throughout this hook, you'll go inside this amazing company and learn about "The Enterprise Way" of doing business. You'll discover how Enterprise has grown at such an impressive rate by outsmarting the competition, treating customers like royalty, and recruiting an army of top talent. More important, you'll learn tangible strategies you can use to stand out from the rest of the crowd, boost customer service, and attract key employees to your own business - regardless of what industry you're in.

We'll begin by looking at how Enterprise started and explore how this tireless pursuit to take care of customers and employees took hold. We'll also suggest strategies for ingraining such thinking into your own corporate culture. We'll then examine how Enterprise gained a competitive edge by following a different path than the rest of the rental car pack and by identifying markets that even the biggest players seemed to ignore.

Next, we'll reveal the company's strategies for hiring, training, and rewarding employees. Every Enterprise field employee starts as an entry-level management trainee, but the opportunities for career advancement are nearly unlimited. As you'll learn, Enterprise treats employees as entrepreneurs and compensates them as such. It's an unprecedented structure, more akin to having headquarters oversee a collection of nearly 7,000 independent locations.

The only way to move ahead at Enterprise is by delivering excellent customer service. To that end, we'll introduce you to the company's groundbreaking program for carefully measuring and monitoring how well each location is executing on this promise, and detail the importance these numbers hold for every aspect of the operation.

We'll then discuss how Enterprise has prospered by forming strategic partnerships with businesses of all types, while exploring how the company effectively uses technology to increase efficiencies and advance its business relationships.

We'll also talk about how Enterprise has been able to excel, even during a period of unprecedented growth, without jeopardizing customer service or employee morale. Much of it relates to the company's commitment to remain in "balance," as chairman and CEO Andy Taylor puts it, by staying equally focused on the following four core areas: growth, profitability, customer service, and employee development.

Finally, we'll look at the eight core values every Enterprise employee lives by. Because they tie directly back to founder Jack Taylor's vision, Enterprise calls them "Founding Values." They arguably can - and should - be adopted by companies of all types. These values include protecting your brand, creating a fun and friendly environment where teamwork rules, rewarding hard work, listening to your customers, strengthening the community, and always keeping your doors open to every person and every idea. Says company chairman and CEO Andy Taylor, "Founding values are the magnet that make all the shavings in your company point in the same direction." When you live by them, he insists, you become a special place and have an opportunity to distance yourself from the competition.

Does The Enterprise Way work for companies outside of the rental car industry? For an answer, you need look no further than Enterprise itself. The Taylor family also owns and operates a number of other diversified and completely unrelated businesses - from a distributor of in-room coffee packets to a manufacturer of Mylar balloons - all of which have enjoyed similar success by following these exact same techniques and management principles.

Thanks to its dedication to taking care of customers, and an impressive track record for profitability in the inherently low-margin rental car business, Enterprise is generally regarded as one of the world's best-run businesses by those who know the company well. Enterprise has also earned numerous outside awards, including a regular ranking at the very top of surveys on rental car companies conducted by J.D. Power and Associates.

At its heart, Exceeding Customer Expectations is your personal guide to running an employee-centered company catering to those who matter most - your customers.

You're about to learn how the Midwestern values and ingenuity Enterprise has so adeptly mastered can be applied to virtually any business to produce unbelievably satisfied customers, an entrepreneurial workforce committed to building the company, and record revenues.