There is no doubt that market control is an admirable goal. But if you achieve it and then abuse it, Ronn Torossian warns you to expect to end up in a difficult public relations position.
Recent consolidations have placed three top rental car companies in rarefied air. Hertz, Avis, and Enterprise now practically own the rental car market in the United States. As always, lower competition means higher prices, and American consumers are beginning to feel the sting.
Worse (for the consumer) the three companies are actively reducing fleet numbers as they grow, meaning that, in addition to reduced competition, consumers now face increased scarcity. They are now competing with other renters for fewer vehicles. This assures the rental car companies of fewer unused units, but it also opens up the consumer to frustration and disappointment.
The robust control over supply and demand is a dream for these businesses, but can become a nightmare for consumers. And this can quickly create a negative public relations environment. When a company depends a great deal on web-based PR, they need to monitor consumer complaints rapidly. Sure, when there are only three major names to choose from, you might feel “stuck” with one, but it is also much easier to see who is receiving the best reviews and who gets the most complaints.
Plus, as market competition decreases and pricing stabilizes, service becomes the only real deciding factor for the consumer. And that is where this sort of market saturation can create PR trouble for a company that might otherwise be on top of the world.
Consider this, if you only have three companies: One receives no rating, one receives a decent rating, and one receives a poor rating, how will a consumer react? The “poor” rating is likely immediately eliminated. That leaves a choice between mediocre and untested. But what would happen if one of the two remaining companies had more positive ratings? They would likely get the business.
Something to consider very strongly when you find yourself cornering the market.
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