Friends from college, the three founders of Fox Rent A Car didn’t really consider their engineering degrees a competitive edge when they launched the business 15 years ago in Los Angeles. And they were right. Though Mark Mirtorabi, Mike Jaberi and Allen Rezapour relished the challenge of entrepreneurship, their advanced education in math, technology and science largely went untapped.
That is, until the World Wide Web transformed how consumers research and book travel arrangements.
What began as a modest, low-tech enterprise — a 10-car fleet and no reservation system — has evolved into one of the most technologically advanced independents in the industry. Fox today has seven locations serving the airport market — three on airport (Los Angeles, San Jose and Oakland) and four off airport (San Diego, Orange County, San Francisco and Phoenix).
The company’s in-house IT staff, overseen by Jaberi at corporate headquarters in Los Angeles, has made Internet marketing a company priority. For operators serving the airport market, this strategy’s return on investment dwarfs that of Yellow Pages advertising, Jaberi says. What’s more, he and his IT staff have developed software that automatically calculates and issues commissions to online travel portals, such as Sidestep, and other Web sites driving online reservations to Fox’s Web site. In collaboration with TSD Rental Management Software, Fox also developed software to manage the company’s extensive customer rewards program.
And most importantly, Fox has rolled out a new reservation system with connectivity to both the Internet and the major global distribution systems (GDS). Fox hopes to continue to expand its brand awareness by making the reservation system available to a new network of Fox Rent A Car affiliates, composed of small independents.
“We have been working on the reservation system for quite some time,” Jaberi says. “We have been one of the early pioneers in Internet reservation delivery, and development is still ongoing. We’re still tinkering with the bells and whistles on the Internet side of delivery. On the GDS side, we’re connected to all four GDS [companies], with an optimized rate management system.”
With the car rental affiliate network in place, Fox’s goal will be to have a presence at 20 major U.S. airports by the end of the year.
The Value of Internet Marketing
The rent-a-car affiliate network’s primary selling point will be Fox’s strength in Internet marketing, Jaberi says. GDS connectivity will be a secondary benefit.
“After signing up a new affiliate, we can then start promoting that airport location on the Internet to drive reservations for that affiliate,” Jaberi says. “It would take less than 30 days to promote that particular airport location with specific keywords, in addition to the keywords we already have.”
Because of Fox’s efforts in Internet marketing, the company’s reservations volume through its own Web site is more than double that from the four major GDS companies — Sabre, Galileo, Worldspan and Amadeus. And with Internet bookings, the return on investment is considerably greater, Jaberi says.
Fox will market affiliates through all channels of the Internet.
“The cost of a rental sale on the Internet is much lower than the cost of a sale on a GDS,” Jaberi says. “Though sometimes [Web site] affiliates get paid commission, it’s much lower than the traditional commission you pay to offline travel agencies. We’ve invested a lot of money in GDS connectivity, but the majority of our marketing funds and tools will be directed at the Internet part of the system.”
Today there are about 700 different keywords that Fox relies on to market the company through search engines, including such major sites as Google, MSN and Yahoo. With 80% of those keywords, Fox will land on the first page of search results.
“With the remaining 20%, we’re constantly pushing those to come to the first page,” Jaberi says.
There are Fox Rent A Car links on no fewer than 2,600 Web site affiliates, some of which draw heavy traffic from the traveling public. Fox is also involved in third-party affiliate programs, which supply affiliate sites.
“Fox is utilizing an aggressive marketing strategy in building cross-site, link-to-link relationships,” explains Joe Knight, executive vice president. “Fox has established preferred vendor relationships with travel Web portals through its extensive affiliate program. The Fox Rent A Car brand is viewed and shopped by tens of thousands of potential customers each month through the multiple cross-site selection network that has been built from the www.foxrentacar.com platform.” [PAGEBREAK]
Fox’s co-owners have discovered that the company’s Web site also fuels call volume at the call center. Some consumers turn to the Web to research travel arrangements but still prefer booking with a live person — or confirming their online reservation with an agent.
“We used to spend $17,000 a month on Yellow Pages advertising,” Jaberi says. “Back then, 90% of our phone calls were from someone who saw us in the Yellow Pages. When we decided to focus on the Internet, we started cutting the Yellow Pages advertising little by little. Today, we no longer have Yellow Pages ads, but the volume at the call center is probably five times greater than it was before.”
IT staff and Jaberi regularly attend conventions and conferences on e-commerce and Web site optimization. The company began investing in Internet marketing about four years ago.
Fox is a charter member of Orbitz, as well as a regional vendor listed on Web sites for such companies as Travel Now, Sidestep, Priceline, Southwest Airlines and America West.
“We make sure we’re aware of any changes that will affect the industry well before they hit,” says Fox co-owner Allen Rezapour, who oversees the company’s finances.
Fox’s co-owners became friends while studying engineering in college. Mark Mirtorabi is a graduate of California State University, Fresno. Rezapour and Jaberi are alumni of California State University, Chico. The three first launched their own business together in 1986 — a limousine company. The business gradually grew as the partners developed relationships with hotel managers and concierges who referred clients. At the suggestion of these hotel employees, the partners formed a sideline business — a rent-a-car company — in 1989. After they sold the limousine business in 1996, they invested the proceeds into the rent-a-car company and started immediate expansion.
Fox originally served the local market, tapping its existing hotel connections. But the advent of online travel portals, along with the emergence of Web site marketing techniques, prompted the company to shift to the airport market. Today, leisure travelers make up about 85% of the company’s bookings, with business travelers accounting for the remaining 15%.
Polishing the Corporate Image
Fox’s 15th anniversary year finds the company undertaking a number of major changes aimed at polishing its corporate image. The company is standardizing its logo in marketing materials and signage. Employees wear uniforms. Locations are subject to unannounced inspections and audits, both internally and by a mystery shopper firm.
The overall goal is to create greater consistency in both corporate image and customer service, says Tonia Brown, location manager in San Diego. “Every Fox location should be identifiable as Fox,” she says. “The look in San Diego should be the same as the look in Phoenix.”
Moreover, Fox continues to upgrade its fleet. The company has added model-year 2004 Chrysler Pacificas and PT Cruisers, as well as new model selections from GM and Ford.
“When it comes to fleet decisions, we sit down and massage the plan really well before making a solid decision,” Mirtorabi says. Because the company maintains steady cash flow, there’s greater emphasis on projected residual value than on upfront incentives. And that typically means higher-quality vehicles for the customers.
Fox has also adopted procedures to ensure that the company responds to any customer complaint within three days. Jose Giraldo, vice president of government and military sales, oversees this effort.
Many of the corporate improvements grew out of the weekly board of directors meetings Fox began holding in 2003. In addition to the three owners and Knight, all department heads attend.
“The three of us decided that we don’t have all the answers to all the questions, so we put together this board,” Rezapour says. “There are 11 of us who meet religiously every Wednesday at 2 p.m., and the meeting usually goes through 6 p.m. We bring up all the issues of the company and discuss them together. We’re doing all this to improve the Fox image and to make sure there are standards across the whole company so that customers have the same experience at the different locations.”
Over the years, managers with considerable car rental experience have joined Fox. Several have worked with such major companies as Alamo, Hertz and Budget. The meetings give these experienced managers the opportunity to suggest ways to make company operations better.
Meanwhile, Fox’s engineering team — otherwise known as the company founders — continues to pursue technology-based solutions to expand brand awareness, generate sales, streamline the rental transaction and reduce paperwork.
Fox has built automation into every level of the company. Fox recently interfaced claims and loss underwriting and vehicle tracking into the counter system. With the continuing support of TSD, Fox is also creating a paperless transaction format to put in place before the end of the year.n