Hertz focuses attention on smaller businesses

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Hertz Corp., seeking to expand its client base, is thinking small.

The car rental chain already has a strong following among large corporations, with Frank Camacho, staff marketing VP at Hertz, estimating the company's 60,000 corporate accounts include two-thirds of the Fortune 1,000. But Hertz wants to dispel a misconception among many smaller businesses that a big marketer like Hertz wouldn't be interested in servicing them.

So Hertz is launching what Mr. Camacho called its "first focused advertising effort to go after small businesses," targeting 4.5 million companies with less than 100 employees.

The all-print push breaks in April magazines including Entrepreneur, Fast Company, Fortune Small Business and Inc. Moss/Dragoti, New York, created three ads. One headline says: "You work for a small business. Now let Hertz work for you." The copy offers a special code to be used for reduced rates when renting a car.

The estimated $8 million effort will run through June and resume in fall. Hertz is also considering adding TV to the mix, which would double the media buy. The marketer spent $52 million in measured media during the first nine months of 1999 and $84 million in all of 1998, according to Competitive Media Reporting.


Hertz is the leading provider of car rentals to large corporations and is typically the highest priced, said industry expert Neil Abrams, president of Abrams Consulting Group. One reason its prices are higher is the depth of the service it provides, including the capability to prepare global travel reports. Small companies don't need that and aren't willing to pay for it, Mr. Abrams said.

He said small businesses more often use Budget Rent A Car, Dollar Rent A Car Systems and Thrifty Car Rental. Budget has become more aggressive in targeting small businesses in ads from Cliff Freeman & Partners, New York.

Although rental rates have risen about 6% annually over the past three years, Mr. Abrams projected only a 3% jump in rates in 2000.

"The problem with the marketplace is it can grow just so much," he said. So Hertz and its competitors have to keep increasing business in their strong segments and make inroads into new sectors. "Hertz is looking at market opportunities it has long ignored or abandoned."

The marketer continues to keep a strong balance sheet. In January, Hertz reported its sixth straight year of record earnings -- $336 million, up more than 21% from the prior year. Hertz also reported record revenues of $4.7 billion, up more than 11% from 1998.

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