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Big Buzz, Zero Budget

  |  March 1, 2002   |  Comments

There are plenty of ways to cut through the clutter. The most elegant? A really good idea.

Few people are more inundated with info-clutter than journalists, who are barraged day and night with press releases and pitches. Try carving mind share out of that.

A couple of weeks ago, our conference room was abuzz right before the staff meeting. Zipcar had just announced its New York launch via a press release on BusinessWire. A few instant messages later, the whole editorial team was talking about... a company they hadn't heard of 10 minutes earlier.

This bears looking into.

By the next day, a bunch of us (yours truly included) had joined the ranks of Zipcar members. Not a bad conversion rate: journalists too busy converting to write the story. A press release doesn't even contain a call to action.

Zipcar is a car-sharing company based in Cambridge, MA. Its mission is to make it as easy for urbanites to slip behind the wheel as it is to get a coffee, light, to go. Its slogan is, "Wheels when you want them." Cars, parked in locations throughout a city, are available to members thanks to Web and wireless technology.

As a business model, Zipcar could prove to be what the dot-coms and venture capitalists were sifting through the bubble for: a viable service meeting consumer need that would not be possible to build, operate, scale, or sustain without Internet and other tech infrastructure. On the marketing side, Zipcar is building a brand evincing all the makings of a cult, Macintosh-style.

Car-sharing companies exist all over Europe, with a handful dotting the U.S. and Canada. Zipcar's technology, coupled with a value proposition irresistible to consumers and, increasingly, to local governments, developers, and urban planners, is the differentiator.

For urbanites, Zipcar is less expensive than owning, renting, or hiring a car service. There's no hassle of insurance, maintenance, or parking. You don't even pay for the gas. Technology makes the usage much like actually owning a car -- no lines or paperwork. A member reserves, then drives. In addition to an annual membership fee, hourly usage rates range from $4.50 to $14.00 hour, dependent on car model and city, with a maximum daily cap. Members carry an encoded card that unlocks the reserved vehicle with a swipe. Usage data is tracked and wirelessly transmitted to Zipcar.

The Web site is a mix of great GUI and functionality. Potential members apply online. Pending application approval (there's a background check of your driving record), email keeps you posted on your status and the next steps. Some of us even received personal messages from the new New York staff, welcoming us into the family.

Usage of terms such as "family" and "member" were deliberate choices. If shared cars are returned late or are dirty, the system won't work. Zipcar builds a feeling of community among members with personal messages from founder Robin Chase; an online bulletin board; open-house events; and the opportunity to take the mandatory member tutorial on site, providing an opportunity to meet other members and staff (we all opted for the online tutorial, which was elegantly executed and took about 15 minutes).

Once approved, members can view availability of specific cars and reserve up to a year in advance. If the desired car is booked, the site tells you what's available in the neighborhood or elsewhere in the city. No explanatory detail is left unmentioned: Garage phone numbers, maps to the parking location, and the vehicle's name (last weekend, I used "Jetta Jessica" -- there's no anonymity with this company, ever) are supplied. The impression you get is that this company cares -- and it's doing all the work for you.

The company never lets you forget you're getting a deal. In addition to a button that estimates the cost of a proposed rental, the account page reminds members of the financial benefit in a manner that's compelling, friendly, and personal. Here's mine:

If you continue spending at this monthly rate, you will save $7,247.00 this year vs. owning your own car! That may justify the home entertainment center you've wanted to buy or at least a new computer, printer and fax machine! We won't tell if you throw in a few CDs or computer games!

Marketing VP Nancy Rosenzweig, who "wields a multi-hundred dollar ad budget" is building a combination of viral and guerilla marketing for the company that seems to be working. Forty percent of members are referred by friends, so there are incentives for referrals. A send-a-postcard function on the site enables people to spread the word (via their own email accounts) about Zipcar. "We try to be thrifty and sustainable," she says of the company's marketing philosophy. And it's very, very local.

Zipcar concentrates less on marketing city to city than neighborhood by neighborhood. The member database allows Rosenzweig to know block by block where to target marketing efforts and where new cars should go. With a near-zero ad budget, Rosenzweig works on promotion and sponsorships with local media -- radio stations and city listings guides -- to target new customers. She's in the early phases of conducting email list tests and is considering a sponsored newsletter.

Members have pitched in beyond viral marketing. Zipcar worked with agencies to build its brand and services, including Hecht Design for identity and Ybos for integration. A number of "believers" at agencies (Rosenzwieg won't say which ones) and members who are marketers have bartered their professional services for usage credits. So strong is the bond between company and consumer that Rosenzweig says many of the company's new hires have been members. "Even when we've advertised on Monster.com, a member will learn about the job from someone else. They'll be perfect for the job and know us," she said.

Local markets present local challenges. The "Zagat-effect" may kick in in New York, where new products and services are jealously guarded secrets, lest competition arise (the phrase emerged from the practice of not telling the restaurant guide about that new gem of a neighborhood bistro, because doing so means you'll never get a table again). "It doesn't work that way at all!" she insists. "The cars are scaled to the number of members, with the ration being 1:20. The ratio, as with the concentration of parking locations, changes with usability." The local challenge, marketing-wise, is to persuade New Yorkers to act against their basic instincts. (Rosenzweig has motivated me to tell everyone in my building, but not friends on the other side of town, about Zipcar.) That's definitely a very concentrated marketing segment.

Members vary in income but have a strong commonality: 95 percent are college educated (of course, Zipcar's based in Cambridge). Rosenzweig says most are Gen Y-ers who want access to a hip car (the fleet is mostly Volkswagen Beetles and Jettas) and older baby boomers who need an occasional (or second) car. A survey of Boston members found 11 percent sold a car upon joining and 44 percent deferred purchase of a car. A few months ago, the company estimated each Zipcar replaced 7.5 private vehicles.

This has not escaped the notice of companies, institutions, and municipalities short on parking and long on congestion. Harvard and MIT house Zipcars -- and promote the service on campus and on their Web sites. Communities sponsor Zipcars in municipal parking lots, and developers are reserving space in new complexes. Corporate cars are available. All provide parking space -- and marketing. The company is holding talks with New York's transportation department. The other day, the Hoboken, NJ, mayor's office phoned for information.

Zipcar may hold the promise of what the Web was expected to deliver when everyone was worked up into a frenzy: a smart new business model enabled by new technology; targeted, personal, and relevant marketing delivered to the right people at the right time; and technology employed to genuinely simplify an aspect of life. There's economic and environmental value that makes the package more attractive. Customers are smart, hip, urban, and generally affluent to upwardly mobile, which is attractive to partners and affiliates -- and marketers.

I couldn't help it. "What's the downside? Does anyone hate you?" I asked Rosenzweig.

"We're trying not to piss off the cab drivers too much," she replied.

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ABOUT THE AUTHOR

Rebecca Lieb

Rebecca was previously VP, U.S. operations of Econsultancy, an independent source of advice and insight on digital marketing and e-commerce. Earlier, she held executive marketing and communications positions at strategic e-services companies, including Siegel & Gale, and has worked in the same capacity for global entertainment and media companies, including Universal Television & Networks Group (formerly USA Networks International) and Bertelsmann's RTL Television. As a journalist, she's written on media for numerous publications, including "The New York Times" and "The Wall Street Journal." Rebecca spent five years as Variety's Berlin-based German/Eastern European bureau chief. Rebecca also taught at New York University's Center for Publishing, where she also served on the Electronic Publishing Advisory Group. Rebecca, author of "The Truth About Search Engine Optimization," was ClickZ's editor-in-chief for over seven years.

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