How Avis Budget Uses Big Data in Marketing
Watch the complete On-Demand event
Author:CSC Town Hall
Car rental giant Avis Budget has launched a new marketing sciences organization fueled by big data analytics to better serve its customers. Now, the company is able to target customers by brand, segment and other key factors to bring them more value than ever before. Get the inside scoop on how Avis carried out this transformation and the lessons they learned along the way.
- Tim Doolittle, VP of CRM and Marketing Science, Avis Budget
- Alex Black, Senior Partner, CSC
- Jim Coleman, Solution Architect, CSC
- Jeff Caruso, Senior Managing Editor, CSC
How Avis Budget Uses Big Data in Marketing
Avis Budget has transformed its marketing using Big Data to better understand who its customers are and to offer them more value. Members of the team that brought Big Data to Avis Budget discussed the transformation, challenges and lessons learned in a recent CSC Town Hall event.
Car rental giant Avis Budget is a global company operating two brands that serve more than 40 million customers. Tim Doolittle, vice president of CRM and marketing science at Avis Budget, said that standing apart is difficult in this industry.
"Rental companies offer similar cars in similar locations at similar rates - and that makes it a very competitive environment. Differentiation today is based on customer service and customer experience," Doolittle said.
That differentiation is largely technology-driven, according to Doolittle. "Technology is used to forecast regional demand for fleet placement and pricing. Data is analyzed to better understand customers’ needs, preferences and intent to rent. From the service side, technology helps us offer a more cohesive customer experience across each of our customer channels," he said.
Customer lifetime value
Alex Black, senior partner at CSC, says Avis Budget was at the beginning of its customer-focused transformation when this project began, and that set the tone.
"We came up with three things to focus on," Black said. "First was a single 360-degree view of the customer. We focused on applying a segmentation strategy called 'customer lifetime value.' And we looked for ways to infuse the customer experience with intelligence."
Solution architect Jim Coleman said the company had a rich assortment of data sources to integrate. "When we first started this project the term 'big data' wasn't used, but when we look back, we realized these are Big Data challenges; handling records from 40 million customers, collecting data from its rental transaction system, website transactions, reports that detail what products customers took, and a customer data hub built using MDM. Many things we built then with custom code are answered today by Big Data solutions."
Doolittle agreed that finding data to analyze wasn't an issue. "We lacked an organized process and analytics infrastructure to leverage our data assets, to improve marketing ROI and the customer experience and to drive long-term customer value. We created a marketing science organization with people focused on customer data integration, another group focused on customer-level performance management and reporting, and an analytics group."
Black says that using a customer lifetime value model helped Avis Budget begin to wring more value from its data. "These models typically yield three- to five-year projections. In this case, we only projected out one year on a rolling basis. We projected how many rentals a person would undertake in a year and what the profit of that person was going to be. We found it to be a very efficient model."
The payoff is clear, according to Doolittle. Understanding the relative value of customers helps differentiate customer service solutions. And it helps the company make more informed decisions.
"Deconstructing the customer lifetime value model gives us a prediction of rental frequency at a customer level and customer profitability. We've added win-back and peer prospecting for a total of six segments, and that's how we organize our contact strategy group. That approach has increased the effectiveness of our contact strategy, in many cases above 30% over control," Doolittle said.
Black said a close examination of the data revealed some interesting insights. "In the top two deciles there were a lot of renters who were never engaged in any kind of campaign, communication, survey - anything except the rental. The name of the game these days is 'engagement.' You hear that over and over with mobile and social and everything out there now. It led to some thinking about the best way to engage with those customers," he said.
The most critical achievement of the project may be the "single view" of customers it can generate. Rather than push streams of data to other applications, information is consolidated into a web-based dashboard that customer-facing employees can access.
"When we developed their customer hub, we made sure we included the capability to tie social media into it," Coleman said. "CSC built its own capability with Hadoop to pull social media from email, Twitter and Facebook, so when you pull up the customer dashboard you can see any social media interactions that have happened with them. We're now tying sentiment analysis into that, so if I'm on the phone with a customer, when the screen pops up I'll be able to determine if the customer has a favorable or unfavorable opinion, if they're frustrated about something or have sent an email that the agent can correct on the phone."
Avis Budget's new customer-centric infrastructure will continue to evolve as the company anticipates what's next for the industry. Its acquisition of car-sharing leader Zipcar offers an entree to this fast-growing segment and lessons in how to actively engage customers.
"There's a lot of interaction between Zipcar and their customers through social media, so that's something we want to understand," Doolittle said. "From a fleet management standpoint it's a very good fit because Zipcar rental peaks on the weekends when our rental demand is lowest. And from a marketing perspective, Zipcar skews heavily to the 21- to 35-year-old demographic, which the Avis and Budget brands do not."
Discussing lessons learned, Coleman said the experience was an eye-opener, even for an industry veteran.
"It was amazing when you looked at all the information they had, to combine that data, segment it, analyze it and the put it in the hands of employees who can use it," Coleman said. "I've been involved in many data warehousing projects over the years, but this project made me a believer in the power of Big Data."