Case | HBS Case Collection | June 2013

Olympic Rent-A-Car U.S.: Customer Loyalty Battles

by John Deighton and James T. Kindley

Abstract

The marketing and operations managers for Olympic Rent-A-Car meet to decide how to respond to changes in the loyalty rewards program at the market-leading competitor. The competitor's program gives awards based on dollars spent instead of days rented and eliminates blackout dates. Olympic expects the program to capture more of the valuable business traveler segment which rents cars more frequently and generally pays higher premiums than the leisure traveler segment. At the meeting, the team reviews the financial performance of the firm and the firm's reward program called Olympic Medalist. They consider whether they can afford to match the competitor's loyalty program terms as they have done in the past and also consider how the competitor's actions will affect the entire car rental industry. Ultimately, they must respond with a truly distinctive strategy. Students must perform a quantitative analysis of each possible response and consider the value of customers in loyalty programs.

Keywords: Customer Relationship Management; Competitive Strategy; Marketing; Operations; Auto Industry; Service Industry;

Citation:

Deighton, John, and James T. Kindley. "Olympic Rent-A-Car U.S.: Customer Loyalty Battles." Harvard Business School Brief Case 913-568, June 2013.