Alamo Rent-A-Car

Segmentation applied to mass media marketing

Discovery

Alamo, a car rental company focusing on the leisure traveler, wanted to increase short-term acquisitions (car rentals) during seasonal business valleys while simultaneously maximizing the return on investment (ROI) of its newspaper advertising

Strategy

Alamo used customer segmentation to identify high-opportunity prospects, specifically the three customer groups, for short-term acquisitions during periods of decreased business. Alamo then applied the segmentation insights to the development of a media plan to target these best prospects and maximize ROI on its newspaper advertising

By using Claritas and third-party consumer survey data, Alamo linked car rental behaviors with consumer-media preferences for newspapers, magazines, television, and radio. Alamo indexed the preferred TV shows and print media for each of the top three customer segments in its top 30 Designated Market Areas (DMAs). This enabled Alamo to assess: customer segment reach and penetrations in the top DMAs; circulation and penetration of specific newspapers; and customer segment readership and penetration for selected newspapers by newspaper section.

Implementation

To determine which customer segments represented the best prospects during business valleys, Alamo used a series of calculations to identify customer segments exhibiting desired purchase behavior. Alamo sorted segment penetrations and ranked the top DMA's to target during each business valley.

To identify which newspapers were its best buys for this project, Alamo converted group newspaper penetration data into actual circulation numbers for each newspaper. Alamo then sorted and ranked the newspapers using the lowest cost per target thousand (CPM) as the defining variable.

Measurement

Alamo's segment-targeted media plan yielded immediate returns! Savings on the 2000 budget for newspaper insertions over the 1999 schedule amounted to over $974,000. The results of the first week alone (with newspaper as the only mass media medium) compared with the same week in the previous year revealed that:

• Alamo spent $113,550 less but generated an additional $516,997
• Realized more than 180% ROI
• Cost Per Rental decreased 56%
• Reservations increased 38%
• Reservation Days increased 33%
• Yield per Day increased 18%

Overall the Newspaper 2000 plan maximized the value of Alamo's newspaper insertions by creating efficiencies that led to significant savings. The plan improved contract rates through increased frequency and drastically decreased the average cost per insertion.

This case study is based on a presentation given by Alamo Rent-A-Car at the Precision Marketing Conference 2000. Our thanks to Jeannie Campbell, Manager of Targeted Marketing and Analysis and Cheryl Baylor, Director of Corporate and Loyalty Marketing, ANC Rental Corp., for permission to use this case study