I was recently introduced to Zipcar by an American friend. Since a car accident damaged his car beyond repair (not his fault) and a he was relocating to another county he did not see the need to replace his car. However, he did need the use of a car for a period of time in order to “run errands” before the big move.

Enter zipcar. Zipcar allows a customer to reserve car on-line via a very simple reservation system. They claim that a car will be within 10 minutes of any customer within certain areas that they operate in. There are up to 25 models available to suit the customer’s specific needs and the customer is charged a single price which includes the cost of fuel up to a certain limit and insurance etc. After that there is a very transparent cost per mile after that, easy for the customer to understand. This helps curtail unnecessary user usage and depreciation of the cars. Even simpler is low fuel in the car? Just use the supplied credit card (in the glove box) to fill ‘er up!”

This is a simple but very effective business offering, with Zipcar claiming to have in excess of a quarter of a million signed up customers (or Zipsters). The business model was changed from the original offering and now more car models are available with less distance for customers to walk to a car at any given time, basically providing more choice, convince and added value services.

There are a number of basic reasons for the success of this company which include:

  • Provide choice: The more choice provided the more options become available to your customers
  • Listen to your customer: Address your customers actual needs, not what you think they might need
  • Offer superior service: In a market saturated with car rentals, Zipcar found a way to offer something already available in a better and more convenient way
  • Sell your value proposition: What problems are you solving for your customers. How are you making things easier for them? How will they benefit from doing business with you?
  • Provide Value: Provide superior value. Make sure the customer can understand the value of doing business with you over that of a competitor especially in a commoditised market.
  •  Re-invent: Ideas, offerings, the business s model, options. Basically don’t be afraid to change things even if they are working now (they might not in the future).

Simple ideas can really be effective!

About the Author: Mark O'Loughlin