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Budget Rent A Car mines data, comes with new $15 gas gimmick

Last week I was in Southern California, meeting with a client about how to use customer and transaction data to market more effectively. Coincidentally, when I picked up my rental car from Budget, they made me an offer which did just that.

I generally rent a car when I’m staying overnight. Rarely do I make any significant dent in the gas tank. Thus I always fill up on the way to the airport rather than just returning it and paying a refueling charge which is prohibitively expensive, or accepting the offer to prepay for a full tank I’m not going to use.

Neither Budget nor I wants me to fill up on the way to the airport. I don’t like refueling because I’m usually cutting it close time-wise, plus I often finding myself paying extra because the previous customer didn’t fill it up all the way. Budget doesn’t like it because they aren’t making any money on me. So they came up with a new offer: pay $15 for gas, no additional refueling charge as long as I drive under 75 miles.

If I drive 75 miles, at the worst they’ll break even. I was in a midsize car, and gas in this area was around $4.50 a gallon. But most customers probably don’t come close. (I didn’t.) So they’ve found a new revenue channel and I’m perfectly happy to pay it. $15 is close enough to the $7 or $8 I’d pay on my own that I am willing to buy freedom from the inconvenience.

Designing an offer like this for your own business, or your client’s, isn’t rocket science. You need to understand the pattern of usage, which will probably vary by area. This was at Orange County Airport, where people are either renting a car for a trip to Disneyland (well over 75 miles by the end of the trip) or right in the Irvine area (my scenario). And they may have tested different pricing to find that sweet spot where the customer is happy to pay for freedom from the inconvenience of the fill-up.

I am an agnostic car renter in that I’ll buy whatever is cheapest in the results that pop up on Kayak, so long as they’re not out of the airport. But Budget has given me a reason to pay extra attention to them next time. Nice work.

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