Synergy Success

The synergies between an insurance firm and a Hertz Local Edition lead to a successful rental operation in a small town.

Sheryl and Brady Krueger are co-owners of a Hertz Local Edition in Newton, Kan. The rental agency, which is dedicated to insurance replacements, was only the second one of its type in the state of Kansas when it first opened in 2002.

Being the only rental location in a town of 20,000 people has its advantages. Just ask Brady Krueger, who runs a Hertz Local Edition in Newton, Kan. His operation is dedicated to insurance replacements.

Krueger says small towns can be difficult locations for rental operations to succeed on their own. "If other 20,000-population towns are like we are, I don't think [bigger rental agencies] could afford to have an exclusively automobile rental agency sitting in that town," he says. "You just can't run the volume, so to attach it to another existing business is a way to spread your name."

In Krueger's case, his Hertz Local Edition operates alongside his insurance agency, Krueger Insurance Management. The property and casualty insurance firm handles personal and commercial lines of insurance for individuals, manufacturers, contractors and municipalities, including the city of Newton. The company also represents several insurance companies, including Allied Insurance, and is a Progressive "Signature Agent," making it one of the national insurer's top agencies.

Krueger says his two businesses have operational synergies. They share the same office building and personnel. More importantly, the insurance agency can supply its clients with insurance replacement vehicles on the spot.

"It's really a nice deal," he says. "That's why we started [the car rental operation] in the first place...we just felt like that was one more piece of customer service for the insurance agency."

Getting Into the Rental Game

Before Krueger had the Hertz operation, he got his insurance rentals from local, independent car rental agencies. Then insurers switched from independent operations to national brands. "Our rental cars first came from Wichita, which is about 20 miles away. Then they started coming from Hutchinson, which is about 35 miles away," he says.

He didn't have a problem accepting rental cars from nearby cities, but he did have a problem when the cars wouldn't show up on time for his customers. After a couple of years of receiving customer complaints, Krueger decided to set up his own car rental agency. He first contacted Enterprise about setting up shop, but was turned down due to competitive reasons regarding established nearby territories.

Krueger reached out to other car rental companies, including Hertz, and received immediate interest from the company. "They responded really quickly, really positively, to us," he says. "I think our timing probably could not have been better...it was right when they were really starting to get into the insurance replacement business."

In 2002, Krueger and his wife Sheryl opened a Hertz Local Edition. It was only the second one operating in the state of Kansas at the time. The rental operation has its own dedicated office and rental counter separate from the insurance agency. The Hertz logo and photos of cars are prominently displayed on the wall behind the rental counter. On the outside of Krueger's office building stands a Hertz sign and the insurance agency's sign side by side.

Krueger didn't have to add full-time personnel to get up and running in the rental car operation. "Our existing insurance staff takes care of the daytime rentals and returns," he says. "We have a dedicated Hertz telephone line and whoever's not on another line will be the one who answers that."

The rental operation stays open an hour later than the insurance agency, so Krueger has two part-time rental employees who oversee the counter and clean rental cars during that time.

Sometimes, Krueger will join in and clean the cars, too. "It's a good wind down after the day. You sit behind a desk and you're on the phone all day. You're doing, in some cases, some pretty intense insurance stuff," he says. "And so, if I get in an hour of crawling under dashboards and seats cleaning stuff and whisking around the vacuum and all of that, that's a nice little end of the day stretch out."

CONTINUED:  Synergy Success
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