A couple of years ago, it was really clear that drivers who needed rental cars did not want to drive EV rental cars. A long wait at the rental car desk in Albany, NY – the New York State capital, showed the absolute horror of being assigned an EV. Customers said “no” while being told that this was their only option. Frustrated customers walked away to the competitors’ counters.
Upstate New York has a lot of gas stations. What it did not have were a lot of charging stations. Yet, rental car companies thought the idea of EVs was brilliant. Hertz made a huge bet on EVs and high-end gas vehicles. Hertz’s bet is only now being unfurled.
According to Bloomberg, Hertz and its new CEO are finally seeing the end of the EV debacle by selling off the inventory. As Bloomberg wrote, “Hertz Global Holdings Inc. said it finished selling off 30,000 electric vehicles, many of which were Tesla Inc. models, as the rental giant moves on from an ill-advised bet on plug-in cars that customers didn’t want and were expensive to maintain. The headlong push into EVs contributed to a loss of $2.9 billion in 2024, Hertz said….”
Bloomberg continued by pointing out, “Adjusted earnings before interest, taxes, depreciation and amortization in the fourth quarter was negative $357 million. Hertz CFO Scott Haralson said the company expects another negative result on that basis in the current quarter as a result of losses on older vehicles sold, before turning positive later this year.” Basically, Hertz’ strategy focused on something that customers did not want or need.
If you have rented a car recently, you might be thinking that renting a car does not ever seem to have the customer in mind. In fact, it appears as if the strategy Hertz employed reflected a lack of customer understanding coupled with a corporate buy-in to EV hype.
But, this is not a story about Hertz and its apparently doom-cycle EV strategy for rentals. This is a story about brands’ lack of focus on putting the customer first. With any business, your people come first. But, customers are a close second. A brand must focus on both its people and its customers. As Phil Kotler, author of the best-selling textbook on marketing tells us, marketing is profitably satisfying customer needs. (Hertz apparently overlooked this simple idea, paying the price for this myopia for years now.)
Sometimes strategic decisions are made due to trends or hype or financial engineering. Recently, beloved Publix supermarkets ran into grief when reports indicated that customers are pissed off they cannot use cash at the self-checkout. Customers with two or three items who have a $10 bill need to stand in line at the 10 items or less register, of which there is usually only one such register available. Brands such as Home Depot let you use cash. So do Kroger’s brands.
The airlines – with fees for everything, including happiness – have turned “not satisfying customers” into an art form. Hotels have followed the airlines’ approaches. How many times have you checked into a hotel for the night and been charged a resort fee?
What can brands do to be more customer-focused and satisfy customer needs? What can brands do to become a consumer-focused, customer-demand-driven organization? Here are 10 requirements for institutionalizing actions to become a customer-focused brand.
1. Secure the brand in the center of the business process. Business management and brand management should be inseparable processes. How you run your brand IS how you run your business. And vice versa. Brand management IS business management. Do not fall into the trap of thinking that brand management is all about messaging.
2. Ensure that the brand promise is the roadmap to the future. The brand promise will drive everything you do. Define the promised experience your brand will deliver. Brand is all about what you will do for the customer.
3. Build your business with the goals of more customers, more often, more brand loyal, more profitable. This is the bottom line of a Plan to Win. More customers who use/visit more often and become more loyal which translates into more profit are essential for quality revenue growth. Quality revenue growth requires both quantity of sales AND quality of sales.
4. Create a brand culture, supporting the organization with appropriate education and training programs. If your culture is rigid, cautious, insular, then your brand will be rigid, cautious insular. The maxim is that culture will eat strategy for breakfast. Your brand may have the best strategies. But, strategies are no match for an embedded culture.
5. Know that nothing happens until it happens at retail… wherever or whatever that retail is: online, home, office, etc. Whatever your brand, the moment of truth is when a customer puts money on the “counter” for your product or service. Make sure the brand’s “place” is working well, in good repair, easy to choose/navigate, easy to use. Your place is the face of your brand, no matter how your brand is sold.
6. The general manager is the ultimate brand experience manager. The general manager knows the customer, knows the customers’ problems, knows the community. The general manager knows the brand ensuring that all actions are in sync with the brand. The general manager supports the brand culture. And, the general manager creates an atmosphere of camaraderie and mutuality.
7. Aim for the highest quality, best leadership and most brand trustworthiness which together generate perceived authority. Good is not good enough. Declining quality, leadership and trust ratings are unacceptable. Trust can be lost in an instant. But, trust takes time to build.
8. Promise what you can deliver and deliver what you promise. Over-promising and under-delivering harms the brand. Inconsistency and not living up to customer expectations kills brands by eroding brand trust. Saying that you are the friendly brand while your employees do not smile or use eye contact is brand mismanagement.
9. Recognize and reward those who generate the right results in the right way. Your people come first. If your people do not love and respect the brand, do not expect your customers to love and respect the brand. Build internal brand pride. YUM! Has one of the most iconic internal rewards approaches.
10. Align every employee as a brand champion. Every function, every job has a role to play in brand-building. Organizational alignment is one of the brand’s key elements for enduring profitable growth. Create a compelling internal marketing program.
These ten criteria may sound simple. But, they are essential criteria that require consistency, influence, and unity to activate. Creating a customer-oriented branded organization is an ongoing task. It may not be easy to implement, but the rewards will generate enduring profitable growth. Brands cannot survive without customers. Brands have no value if there is no customer value. A customer-focused organization is operationally excellent. Operational excellence decreases costs, improves stakeholder satisfaction and ensures consistent quality: marketing moves people to the door; operational excellence motivates people to come back for more.
Contributed to Branding Strategy Insider by: Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
At The Blake Project, we help clients worldwide, in all stages of development, create meaningful differences that underpin competitive advantage. Please email us to learn how we can help you compete differently.
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education
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