Enterprise's Billion-Dollar Retention Strategy - Location, Relationships and Service Design

As a customer retention specialist, I'm constantly studying companies that have mastered the art of keeping customers coming back. Enterprise's rise in the rental car industry is a fascinating case study.

Their retention success wasn't built on exceptional customer service alone. It was built on something far more strategic.

While major rental companies like Hertz, Avis, and National dominated expensive airport locations targeting business travellers and tourists, Enterprise saw a completely different opportunity. They identified an underserved market that competitors were ignoring → people who needed temporary transportation due to car accidents, repairs, or insurance claims.

>>> Here's where their retention genius kicked in:

They embedded themselves in the customer's moment of need.

Instead of expensive airport counters, they opened locations in neighbourhoods and suburban areas where people lived and worked. They made everything convenient for local customers.

They built systematic retention loops.

Enterprise didn't only serve individual customers; they built relationships with insurance companies, auto dealerships, and repair shops. This created automatic referral systems that funnelled customers to Enterprise repeatedly. Once someone had a positive experience during a stressful situation, such as a car accident, Enterprise became their go-to solution for future rental needs.

• They eliminated friction with "We'll pick you up."

This well known tagline wasn't just brilliant marketing - it was a retention strategy. By removing the hassle of getting to their location, Enterprise created a seamless experience that customers remembered and requested again.

They maintained quality whilst controlling costs.

They focused on availability and value. Enterprise maintained a younger, well-kept fleet and competitive pricing, making them a reliable choice for repeat customers.

What's particularly interesting from a retention perspective is how Enterprise built habitual usage patterns. By embedding themselves in the insurance claims process and repair shop workflows, they created systematic touchpoints that competitors couldn't easily replicate. Customers weren't just choosing Enterprise once - they were being funnelled to Enterprise repeatedly through these relationships.

This local-first, relationship driven approach eventually made them the largest rental car company in North America. Not bad for a company that started in 1957 when Jack Taylor launched Enterprise with just seven cars and a simple philosophy: 'Take care of your customers and employees first, and profits will soon follow.

Taylor's philosophy wasn't just a nice sentiment - it became the foundation for their stroke of genius: engineering customer satisfaction itself by making satisfaction scores the only path to promotion in a company where nearly all Enterprise executives began their careers behind the rental counter, reinforcing a culture built around frontline customer service experience.

I’ll talk more about this critical business strategy and how other companies can apply Enterprise's satisfaction engineering approach in my next post.