Social Media Marketing Is an Oxymoron
Zipcar and its zippy, failed $7,400-a-Week CMOJanuary 22, 2013 By Denny Hatch
In 2004, we started noticing snappy little red and blue automobiles parked all over Philadelphia with the PhillyCarShare logo on the door. [See the first image in the mediaplayer to the right.]
This transportation is available by the hour or by the day. We've talked to people that use the service and like it just fine. If a family's driving is di minimis and economizing makes sense, getting rid of the family car and using PhillyCarShare is certainly one way to go.
Three years later, Zipcar arrived on the scene in direct competition with PhillyCarShare. It became a blip on my radar when I noticed a few of their vehicles parked not only around town, but also claiming prime real estate in our public parking garage.
The Avis Acquisition
On Jan. 2 this year, it was announced that Avis ("We try harder") acquired Zipcar for $500 million. Two paragraphs in Dennis K. Berman's Wall Street Journal column—"Zipcar: Startup Genius, Public Failure"—intrigued me:
Zipcar was a prodigious money-loser over the years. Funding its growth around the world, it never once turned an annual profit, losing cumulatively about $55 million since 2007. And the entry of rental-car behemoth Hertz Global Holdings, Inc. made its task all the more costly.
The odd thing is that Zipcar came very close to perfecting its technology and customer experience. Its problem was that it just couldn't find a cost-efficient way of luring ever more members.
The last sentence above threw down the gauntlet to this old-time direct marketer. Acquiring customers (share of market) and getting them to spend more money (share of wallet) are what I have been doing for the last 50 years.
I sniffed blood. In this digital age, the place to start was the online marketing of these two companies. First, a page from the PhillyCarShare website.
PhillyCarShare is a car sharing organization that gives you access to cars by the hour, whenever you need them. Once you become a member of our community you can choose from over 250 cars parked around the city. Rates include gas, insurance, maintenance, roadside assistance, and 24-hour helpline. You can shop at Ikea with a pickup, get fresh groceries in a Prius, or meet clients in a Nissan Altima. You can even sign up your company for travel convenience on the job.