Demon dialers, Dungeons Dragons, and the great $5 disposable suit.
The Dodge Aspen reeked of fish as it rolled back to the rental office. Ice melted on the seats, fish scales floated in puddles of water on the floor, and the driver had to lean out the window to avoid the stench.
"Many of our customers have been victims of an accident or a crime," explains Sanford Miller, president and chief executive officer of Snappy Car Rental Inc. "They have no transportation, and they take all their aggressions out on us."
So Miller, who has carved a $30-million piece out of the estimated $280-million-a-year replacement-vehicle industry, trains his staff to expect the unexpected -- like the customer who rented from Snappy because her boyfriend's fish-delivery truck was being repaired.
The growth of Snappy itself was somewhat unexpected.Miller started the company with 10 cars in 1973 as a sideline to his Dodge dealership in Shaker Heights, Ohio, launching the new service after accident appraisers repeatedly asked about renting cars for their policyholders. "The business was right in front of our eyes," he says. "We just had to recognize it." Within five years, when his company had grown to seven Snappy offices across the Midwest, Miller closed the dealership to concentrate exclusively on rentals.
That concentration has paid off. Miller now oversees a fleet of 13,000 new cars, with 150 offices and a work force of 800 scattered across 35 states. Part of the expansion has been underwritten by bank debt and the liquidation of real estate holdings; but the greater proportion has been handled through the automakers themselves. Ford, Chrysler, and General Motors have all extended the Snappy credit line; Miller repays his debt after selling rental cars that have been on the road for a year.
While Miller admits that the replacement-vehicle business is virtually immune to the economic ills that affect the leisure-travel segment of the industry, he insists that it is no less competitive. Despite sales of $30.4 million last year, Snappy still struggles for name recognition. Expansion into new cities invariably brings on aggressive price-slashing from rival companies. Moreover, mass-media advertising to spread the Snappy name is ineffective, because renters rely on their agents' referrals for temporary wheels.
"You can't solicit insurance rentals, because the average John Public can't give the OK," Miller explains. But Snappy has developed a neat marketing twist to meet the competition: It has raised prices by about $1 on the standard $15 daily rental fee. "It calls attention to us, and we use that [opportunity] to explain our service [to insurance agents and body shops]."
While 95% of the business is still insurance replacements, Snappy is moving on the travel market as well, with Miller hoping that a more than $1-million national print and television campaign ("Make it Snappy") will have a residual effect on his replacement revenues. "We'll continue to emphasize the insurance end," he affirms, "but I also want to increase our percent of travel business, open in airports, and go after corporate accounts. The nice thing about this business is that you can go anywhere and get as big as you want."