Influencing challenges? b) What are the associated opportunities?

Topic: BusinessAccounting
Sample donated:
Last updated: May 24, 2019

Influencing Customer Behavior 1.       Focusingon customers, what role do they play within the Zipcar service model?a)      What are the associated challenges?b)     What are the associated opportunities?Customers play acentral role in the Zipcar service model because the business model relies onthe customers to execute their side of the bargain for other customers to usethe service successfully. Such an operation while surely being unique has manyadvantages and disadvantages and we need to consider them more deeply.Regular carrentals like Enterprise or Hertz operate on a different service model incomparison to Zipcar.

While their primary goal is the same, providing customerswith rental cars, the operating service ensures that customers pick up and dropoff cars at a designated central location. This enables the rental serviceproviders to have a control on the cars coming in and going out. This alsomeans that there is a central facility for the rental vehicles, enabling peopleto pick up a car even if their pre-selected car is not available for somereason.CHALLENGESIn a servicelike Zipcar, the customers are expected to drop off their rental cars at aspecific spot from which another customer can directly pick it up from. Whilethis is cost saving opportunity, it faces many challenges. As seen in the case,customers might get caught up on their trip due to several unforeseen reasons,like a car breakdown or a meeting running over time.

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This would mean that thecar isn’t at the specified time at the specified spot, which a customer haschosen. The flaw in the service plan is that customers will not be able tocompletely rely on the Zipcar for a trip that is time sensitive. This wouldalienate a lot of potential customers. Also, the condition of the Zipcar issolely dependent on the previous customer that used the car.

Hence, to a largeextent, the reputation of Zipcar’s brand and its reach to all customers arelimited. On further research, I have found that Zipcar charges a fee for latedrop-offs. While this penalty is beneficial to Zipcar, it also enables badbehavior by removing guilt. OPPORTUNITIESIn-spite of allthe challenges that Zipcar faces, the service is designed to consciously accommodatemaximum customer requirements at the cheapest price possible. Zipcar allowscustomers to choose their pick-up spot, most convenient to them instead ofrequiring them to go the central hub which eliminates the need to travel to farlocations just to pick up a vehicle.

Another big opportunity that thecustomer-centric model presents is the sense of community that the members feelpart of. Zipcar can harness this opportunity to help customers feel connectedto each other, thereby prompting them to act in each other’s best interests;dropping off cars on time and keeping it clean in general. This sets them apartfrom their competitors by making the customers more close-knit, which help theoverall organization in terms of mission and obviously, revenues.

2.      What options does ZipCar have to influencecustomer actions? Zipcar has a bigincentive to influence customers towards behaving righteously. The customerbase of Zipcar is quite young, and this demographic is quite forward-thinking.They value the sense of community and want to, almost always, treat everyonethe way they want to be treated themselves. The best way for Zipcar to succeed using this to their benefit is tohelp customers know each other. They could organize events where customers getmeet one another, either online or in person, and share their experiences andstories. Helping customers know each other invokes a sense of community even inthe most unwilling and induce general good behavior when using cars anddropping them off.

Another surerway, would be to incentivize good behavior. A customer who is repeatedly ontime and maintains the car he/she rents in good condition can be given benefitslike a free rental service or a discount on their next ride. Similarly, insteadof just imposing fines when customers return their vehicle late withoutnotification, Zipcar can penalize repeat offenders by dropping theirsubscription. This would incentivize customers to drop their vehicle off ontime, or if not, notify Zipcar within a said time period, so that the nextcustomer would not be unnecessarily penalized.

 

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