#610: Unlocking greater customer loyalty with Aleksander Kaczmarek, CarTrawler

Summary

Podcast Summary: The Agile Brand™ with Greg Kihlström
Episode #610: Unlocking Greater Customer Loyalty with Aleksander Kaczmarek, CarTrawler
Release Date: December 4, 2024

In Episode #610 of The Agile Brand™, host Greg Kihlström engages in an insightful conversation with Aleksander Kaczmarek, Vice President of Loyalty Partnerships at CarTrawler. The episode delves into the burgeoning opportunities within the car rental market for loyalty programs, exploring strategies to enhance customer engagement and loyalty through innovative rewards and partnerships.

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1. Introduction and Background

Greg Kihlström opens the episode by introducing Aleksander Kaczmarek and providing an overview of CarTrawler's role in the car rental industry. CarTrawler operates as a B2B tech platform, connecting major brands like American Airlines, Uber, and Hilton Honors to over 1,700 car rental suppliers worldwide. Aleksander shares his extensive background in loyalty programs, emphasizing his role in expanding and optimizing loyalty propositions by integrating sophisticated car rental offerings.

Notable Quote:
“I help brands expand and optimize their loyalty proposition by incorporating a sophisticated car rental offering into their programs.”
— Aleksander Kaczmarek [01:50]

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2. The $20 Billion Opportunity in Car Rentals

Aleksander introduces the core topic by highlighting a significant $20 billion opportunity for loyalty programs within the car rental sector. This opportunity stems from the potential to engage customers year-round by offering car rentals as both earnable and redeemable rewards.

Notable Quote:
“What if your loyalty program could tap into a $20 billion opportunity that most of your competitors are overlooking?”
— Aleksander Kaczmarek [00:53]

Greg underscores the vast size of the car rental market, noting that in the US alone, it’s valued at over $38 billion with approximately 60 million adults renting cars annually. Despite this, only 12% of car rentals are booked through loyalty programs, revealing a substantial gap between potential and current engagement.

Key Statistics:

• 45% of survey respondents are likely to rent cars through their loyalty programs.
• 63% would increase their likelihood of booking through programs that earn points on car rentals.

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3. Shifting Demand: Everyday Use vs. Seasonal Travel

The conversation shifts to evolving consumer behavior, showcasing a trend where car rentals are increasingly used for everyday purposes rather than just vacation or seasonal travel. Greg cites the report’s finding that 24% of all car rentals in the US are for everyday needs, yet only 10% of these are booked through Online Travel Agents (OTAs).

Notable Quote:
“Nearly a quarter of all car rentals in the US are booked for everyday purposes, presenting a huge opportunity for loyalty programs.”
— Greg Kihlström [07:54]

Aleksander emphasizes that loyalty programs can capitalize on this by positioning car rentals as integral to daily life, thus driving consistent, year-round engagement.

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4. Strategies for Enhancing Loyalty Programs Through Car Rentals

Greg outlines several strategic approaches loyalty programs can adopt to maximize their impact in the car rental market:

1. Personalization: Leveraging customer data to offer tailored rental options that match individual preferences and needs.
2. Flexible Payment Options: Incorporating a mix of points and cash to provide versatile redemption methods, as 63% of respondents prefer this combination.
3. Exclusive Member Benefits: Offering member-only discounts and perks to enhance the perceived value of the loyalty program.

Notable Quote:
“62% of respondents rank member-only discounts in their top three criteria, highlighting how much people value exclusive loyalty program rates.”
— Greg Kihlström [09:09]

Aleksander adds that partnering with technology providers like CarTrawler can facilitate these strategies by offering access to a wide range of suppliers, negotiating favorable rates, and implementing advanced personalization techniques.

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5. Targeting Demographics: Millennials and Sustainability

A significant portion of the discussion focuses on demographic targeting, particularly millennials (25-39 years old), who show a high interest in renting cars through loyalty programs. Greg explains that this group values experiential rewards, personalization, and sustainability.

Notable Quote:
“Millennials prioritize experiential rewards and travel opportunities, demanding personalization that loyalty programs can provide.”
— Greg Kihlström [13:08]

The report indicates that 55% of renters under 50 are open to choosing electric vehicles, compared to 27% of those over 50, underscoring the importance of offering eco-friendly options to resonate with younger, sustainability-conscious consumers.

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6. Building Trust and Convenience in Loyalty Programs

Trust emerges as a pivotal factor in loyalty program membership and engagement. Greg shares that 43% of respondents cite trust as a key driver for joining a loyalty program. Trust entails transparency, reliable experiences, and straightforward rewards without hidden fees.

Notable Quote:
“Trust is a powerful driver of both loyalty program membership as well as ongoing long-term engagement.”
— Greg Kihlström [15:16]

Convenience is equally crucial, with 39% of consumers prioritizing a straightforward online booking process. Greg suggests offering perks such as the ability to bypass the rental desk and providing a wider range of pickup locations to enhance the user experience.

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7. Future Trends and Innovations

Looking ahead, Greg predicts significant growth in integrating car rentals into loyalty programs as the market continues to expand. Car rentals are becoming the most popular points redemption option, overtaking categories like health and wellness, clothing, and homeware.

Notable Quote:
“The future success of loyalty programs will depend on their ability to innovate and meet the evolving needs of their members.”
— Greg Kihlström [19:37]

Aleksander echoes this sentiment, emphasizing the need for loyalty programs to evolve beyond simple points accumulation to offer comprehensive, personalized experiences that provide real value to members.

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8. Conclusion

The episode concludes with Greg and Aleksander reflecting on the importance of agility and continuous learning in the loyalty sector. Greg shares his approach to staying informed by building strong industry relationships and attending conferences, ensuring he remains attuned to the latest trends and insights.

Notable Quote:
“Personalization is key here. This generation craves rewards that resonate with their lifestyles and values.”
— Greg Kihlström [14:42]

Aleksander expresses appreciation for the platform to discuss these strategies, highlighting the mutual benefits of exchanging knowledge within the industry.

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Final Thoughts:
Episode #610 of The Agile Brand™ offers a comprehensive exploration of how loyalty programs can harness the car rental market to drive greater customer loyalty and engagement. Through strategic personalization, flexible rewards, and a focus on trust and convenience, loyalty programs can unlock significant revenue opportunities and foster long-term relationships with their members.

For more insights and detailed discussions on marketing technology and customer experience trends, subscribe to The Agile Brand™ and explore additional episodes at www.gregkillstrom.com.

Transcript

[Greg Kilstrom]

The Agile Brand.

[Host]

Welcome to Season six of the Agile Brand where we discuss marketing, technology and customer experience, trends, insights and ideas with enterprise and technology platform leaders. We focus on the people, processes, data and platforms that make brands successful, scalable, customer focused and sustainable. This is what makes an agile brand. I'm your host Greg Kilstrom advising Fortune 1000 brands on MarTech, marketing operations and CX best selling Author and speaker. The Agile Brand Podcast is brought to you by Tech Systems, an industry leader in full stack technology services, talent services and real world application. For more information go to teksystems.com now let's get on to the show.

[Alexander Kachmarek]

What if your loyalty program could tap into a $20 billion opportunity that most of your competitors are overlooking? Imagine increasing engagement by offering rewards that your customers are already looking for. Are you ready to drive loyalty through car rentals? Today, we're diving into strategies for boosting engagement and loyalty programs. With Alexander Kachmarek, VP of Loyalty Partnerships at Car Trawler, we're going to explore findings from their Driving Loyalty Market Insights on Car Rentals and Rewards Programs report which reveals how loyalty programs can tap into the growing car rental market to unlock new revenue opportunities and year round customer engagement. Alexander, welcome to the show.

[Greg Kilstrom]

Thank you Greg and I'm excited to be here and looking forward to talking to you about car rental and the opportunity it brings to brands and loyalty programs.

[Alexander Kachmarek]

Yeah, looking forward to this. Before we get started though, why don't you give a little background on yourself and your role as VP of Loyalty Partnerships at Car Trawler?

[Greg Kilstrom]

Yeah. So first to introduce your listeners to Car trawler. We're a B2B tech business providing car rental solutions to some of the world's biggest brands including American Airlines, Uber, Hilton Honors, United and many, many more. And our platform connects these Partners to over 1,700 car rental suppliers across 50,000 locations across the world. And we enable their customers to book car rental within their own ecosystem, generating revenue and enhancing customer engagement. And in fact, most of your listeners would have booked a car with our technology without knowing it. We're based in Dublin, Ireland and Carport has been around for over 20 years solely focused on car rental and it sits in a very unique marketplace between customers, brands and car rental suppliers. So Kartrail has a strong understanding of the sector and what opportunities lie ahead. I'm VP of Loyalty Partnerships. I've had a long background in loyalty, identifying, launching and growing strategic partnerships with some of the largest loyalty programs in the world and I've held previous roles At British Airways and Affinean International. And in my current role at Cartra, I help brands expand and optimize their loyalty proposition by incorporated a sophisticated car rental offering into their programs. And I wanted to start off. Greg, if you let me ask you a question.

[Marketer]

Yeah, sure.

[Greg Kilstrom]

So, yeah, tell me about the last time you rented a car.

[Alexander Kachmarek]

Yeah, so fairly recently I was in Stockholm and I rented a car from Hertz from my loyalty program with Delta.

[Greg Kilstrom]

Yeah, and that's great. And I guess that's what I want to start with. Just an overview on where customers can rent a car and frame what we're going to be talking about today. But there are many ways to rent a car. You can book directly with a supplier what you've done, or you can book via an online travel agent, or you can book via a third party such as a loyalty program. And as these loyalty programs have started to grow and develop their travel offerings, we believe there's a huge opportunity for lots of programs and brands to capture much more of this car rental market. In our recent report, which we'll be talking about today, it came from a desire to better understand how customers book car rental through their loyalty programs, what their needs and what their desires are. And it was based on a comprehensive survey of over 3,500 US participants and uncovered some really key takeaways that should resonate with many brands.

[Listener]

Yeah. Yeah.

[Greg Kilstrom]

Great.

[Alexander Kachmarek]

Well, yeah, let's dive in then. And want to start with what I introduced at the beginning of the show. This $20 billion opportunity in car rentals. So Car Trawler's recent research report, it's called Driving Market Insights on Car Rentals and Reward Programs. It highlights this $20 billion opportunity for loyalty programs to incorporate car rentals as both earn and redeem and discounted options. Why do you think this re Awards category has been historically overlooked? And how can loyalty programs capitalize on this potential?

[Greg Kilstrom]

Yeah, and just to be clear, some loyalty programs don't offer car rental, but many do. It's just we believe that they've not been giving it enough attention. As loyalty programs have expanded and launched travel propositions, their focus has been on flights and hotels. Because these are core travel offerings. Car rental is often considered as an add on to these bookings. But the car rental market is significantly sized. Over $38 billion in the US alone this year. And approximately 60 million US adults rent a car annually. That's one in four Americans. And this presents a huge opportunity for loyalty programs. A key finding from the report identifies that 45% of respondents are likely to rent cars through their loyalty program, but only 12% did. And this points to a massive gap in awareness and access. And interestingly, 63% said that earning loyalty points on car rentals would increase their likelihood of booking through that program. So if you have a points program, you're really missing out if you don't offer car rental.

[Alexander Kachmarek]

Yeah. So how can loyalty programs then position themselves as the leading channel for car rentals, especially when competing with, you know, whether it's OTAs, airlines, some others?

[Greg Kilstrom]

Well, loyalty programs tend to already have an existing trust and strong relationship with their members. And by leveraging this trust and integrating car rentals directly into their program, they can create a more sophisticated experience than any ota. Secondly, loyalty programs tend to be closed user group, meaning customers have to log in to access their rewards. And this enables them to offer exclusive member only discounts, points or cash back that can be sourced directly from car rental suppliers. And this adds additional value which isn't available via OTAS or other channels. And of course, the car rental offering has to be robust and sophisticated. And that's what we'll talk about in a bit more detail.

[Alexander Kachmarek]

Yeah, yeah. And so I want to talk also, there's some other trends happening as well. So, you know, a lot of people listening probably think of car rentals as vacation travel, maybe seasonal business travel. There's also some shifts in demand for car rentals for everyday use, things like visiting friends, moving, other things like that. How can loyalty programs leverage this shift to create some more consistent engagement with members throughout the year, not just seasonal travel.

[Greg Kilstrom]

Yeah, so this was one of the most powerful takeaways from the survey and one which I've seen come as a surprise to even seasoned travel professionals. Nearly a quarter 24% of all car rentals in the US are booked for everyday purposes. And by that I mean they're not part of any wider trip, be that a vacation or business travel. And only 10% of everyday rentals are booked through OTAs, giving Lottie programs a huge opportunity to fill that gap and become the customer's go to place for these types of bookings. Loyalty programs can tap into this opportunity by offering tailored rental options that fit with members everyday needs, positioning car rental as part of everyday life rather than just for vacations. And the customer will engage and we'll start seeing a shift in where these bookings are made. And what's more, as you mentioned, these bookings aren't seasonal, so you can engage customers across the calendar year. Something which a more one size fits all Travel offering will struggle to do.

[Listener]

Yeah.

[Alexander Kachmarek]

Are there some strategies that you'd recommend for loyalty programs to do this to, you know, to capitalize on this, this opportunity?

[Greg Kilstrom]

Yeah. So above everything it's about giving customers the best experience from searching for the right car, accessing the best price and being looked after right through to returning the vehicle. And this will ensure customers will return to their programs and book car rentals again and again. With this as a goal, there's a few tactics that can help loyalty programs deliver this. Firstly, personalization can make a huge difference. Loyalty programs inherently have an incredible amount of data on their customers. And using this data effectively allows them to create a highly personalized rental experience. Presenting their customers with the right car, the right time, at the right price. And this can create a seamless customized experience that will drive customer satisfaction. Secondly, integrating flexible payment options. 63% of respondents regularly use a combination of points and cash for redemptions. And this shows a preference and growing trend for versatile payment methods that can maximize the value of their points. And finally, offering exclusive member benefits is a powerful way to encourage frequent usage. So member only discounts makes members feel rewarded and valued. And in fact 62% of respondents rank member only discounts in their top three criteria, highlighting just how much people value exclusive loyalty program rate. And these strategies can be very hard to deliver when car rental isn't your core business. And that's why partnering with technology partners like Cartrawler can help. So for example, we provide access to broad range of car rental suppliers from corporates to independents which can give customers a greater choice when renting a car. We also negotiate market leading rates and access closed user group pricing which can help when it comes to offering exclusive benefits. And we execute personalization strategies that are reliant to our partners loyalty programs and that will deliver the customers the best booking experience.

[Marketer]

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[Alexander Kachmarek]

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[Alexander Kachmarek]

So another trend beyond the seasonal or I guess the year round aspect of this is looking at demographics. And one of the things pointed out in the report was 56% of 25 to 39 year olds are highly interested in renting cars through loyalty programs. So how can loyalty programs specifically tailor their rewards to this demographic? And one that's typically hard to reach?

[Greg Kilstrom]

Yeah, it's actually by far the highest out of any age range in terms of interest through in renting cars through loyalty programs. And the reasons for this are that millennials have very distinct values that shape their consumer behavior. And it's this that's seen the rise in the success of loyalty programs in recent years. They prioritize experiential rewards and travel opportunities above others. They demand personalization, something that loyalty programs can give them. And they tend to be purpose driven customers that really want to connect with their loyalty proposition. They're highly emotive. And to engage this demographic, it comes down again to personalization. There's a reason why we keep hearing this word in the sector, right? And this generation craves rewards that resonate with their lifestyles and with their values. They're not just looking for a typical incentive. They want options who reflect who they are. An example from our report was that 55% of renters under the age of 50 would consider choosing an electric vehicle compared to just 27 of those age over 50. And this clearly shows the importance of tailoring eco friendly options to a younger demographic who value sustainability. And also many in this demographic rely on car rentals for everyday needs. They might live in larger cities where they don't own a car. And so tailoring rewards for local rentals or local suppliers can really meet those broader lifestyle demands.

[Listener]

Yeah. Yeah.

[Alexander Kachmarek]

So last topic I want to talk about is the concepts of both trust and convenience. We'll start with the topic of trust, and this was one where in the report 43% of respondents cited trust as a key driver of loyalty program membership and as a top reason for joining. How can offering trusted and convenient car rental options strengthen these relationships and help to build that Long term customer engagement.

[Greg Kilstrom]

Yeah. And whilst it might seem quite obvious, it was actually a key finding from the report that trust was the number one reason why a customer joined a Lottie program. Across retail banking and all membership associations, trust ranked much higher than other reasons such as access to discounts or security of your funds or the ability earn and redeem points. So trust is a powerful driver of both loyalty program membership as well as the ongoing long term engagement. And what does trust mean? I mean, for members, trust means that what they see is what they'll get. No surprises, no hidden fees, just straightforward benefits with a reliable experience. And when it comes to car rentals and even wider travel, this trust is even more important. Consumers want transparency in pricing, an easy, hassle free process. And if loyalty programs can deliver a consistent and enhanced customer experience, they can become the go to choice for car rentals, both for everyday needs and travel, strengthening their relationship with their customers.

[Alexander Kachmarek]

Yeah, so what about convenience then too? Because the report also pointed to that as a, as a key factor. So, you know, what role does convenience play in integrating rentals into a loyalty program? And how can programs ensure that this process is seamless and convenient for their members?

[Greg Kilstrom]

Yeah, and if trust is the foundation of loyalty program membership, then member exclusive perks and convenience are what keep the members actively engaged. Our Reports show that 39% of consumers ranked a straightforward online booking process as their top three criteria for renting a car, which indicates that ease of use is essential to a positive customer experience. Offering perks such as the ability to bypass the desk will provide a wider range of pickup locations. Id like local branches away from transit hubs like airports or train stations can go a really long way to enhancing this experience. And these added touches make it very easy for members to rent with confidence and keep them engaged with the program long term.

[Listener]

Yeah, yeah.

[Alexander Kachmarek]

So what didn't we talk about here? You know, what are some other untapped opportunities that you see in the loyalty space that could further drive engagement, create new revenue streams and ultimately produce more loyalty?

[Greg Kilstrom]

Yeah. A big one is building a diverse portfolio of rewards that complement your loyalty program and go beyond just the usual offerings. Car rentals are a good example of that because they cater to both travel and everyday needs, bridging the gap and delivering value that keeps members engaged all year round. But if your loyalty program can add to that and become the go to place to access, access additional perks and wider offerings, members are much more likely to increase their spend within your program and become what you could call super active.

[Host]

Right.

[Greg Kilstrom]

So they're constantly checking the Lords program first for all of their needs. And as I mentioned earlier, is personalization is key here. There are now highly advanced tools for loyalty programs to offer truly customized reward packages, dynamic content, flexible redemption options that are tailored to each member's preference. And together these strategies can create a truly loyal and unique experience that's versatile, engaging, and benefits both members and businesses.

[Listener]

Yeah, yeah.

[Alexander Kachmarek]

So looking ahead, how do you see the role of car rentals evolving in loyalty programs? What innovations are out there or what are we on the cusp of that loyalty leaders should consider to stay competitive and meet these rising expectations of their members and consumers in general?

[Greg Kilstrom]

Yes, a couple of points. The car rental market, which we've already discussed, the size is growing tremendously as well, and it's in a unique position to transform loyalty programs over the next five years. As I mentioned earlier, 45% of respondents are likely to rent cars with their programs. And that just demonstrates a wider shift that we're seeing in the loyalty sector towards flexibility and convenience. And that's bringing a new relevance to loyalty programs, one that many customers still might not know, might not understand. So I see huge growth there. Car rentals were also the most popular points redemption option, surpassing categories like health and wellness, clothing and homeware. And the future success of loyalty programs will depend on their ability to innovate and meet the evolving needs of their members. To stay competitive, loyalty leaders need to think about beyond simple points accumulation and create a comprehensive personalized experience that really delivers value to their members.

[Listener]

Yeah, that's great.

[Alexander Kachmarek]

Well, Alexander, one more question for you before we wrap up here. Something I like to ask everybody.

[Host]

What do you do to stay agile.

[Alexander Kachmarek]

In your role and how do you find a way to do it consistently?

[Greg Kilstrom]

Yeah, a good question. I was listening to some of the other podcasts to hear their answers, which is probably cheating a bit, but I try to focus on listening and learning. I am an incredibly curious person, as I'm assuming you are too, and it generally keeps me up at night sometimes. But I'm fortunate that I get to work with so many incredible, talented and intelligent people across the loyalty sector, all of whom are able to answer these questions and have in depth discussions with me. So I put a lot of effort into ensuring I develop host relationships across the industry. And this isn't easy in today's age. People are very busy working remotely, but I go to a lot of conferences, set up as many in person meetings as possible, dinners, and all of this helps me keep a really close eye on loyalty trends. And insights as well as all of our partners evolving needs.

[Alexander Kachmarek]

Yeah, I love it. Yeah, I definitely. I mean, totally agree. I learned something from every conversation, so I feel very lucky to have a podcast where I get to talk with people like yourself. Well, thanks again Alexander. Really appreciate you joining today. Again, I'd like to thank Alexander Keczmarek, VP of Loyalty Partnerships at Car Trawler for joining us today. You can learn more about Alexander, call Trawler and get a link to the Driving Loyalty Market insights on car rentals and rewards programs. Report by following the links in the show notes.

[Host]

Thanks again for listening to the Agile Brand brought to you by Techsystems. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find the show more easily. You can access more episodes of the show at www.gregkillstrom.com. that's G R E G K I H L S T R O M Com While you're there, check out my series of best selling Agile brand guides covering a wide variety of marketing technology topics. Or you can search for Greg Kilstrom on Amazon. The Agile Brand is produced by Missing Link, a Latina owned, strategy driven, creatively fueled production co op. From ideation to creation, they craft human connections through intelligent, engaging and informative content. Until next time, stay Agile.

[Greg Kilstrom]

The Agile Brand.