Driving change in consumer habits
Tuesday, February 22, 2011/
Influencing consumer behaviour is a challenge for entrepreneurs at the best of times, but the ingrained habit of car ownership has been a particular hurdle for car sharing firm Flexicar.
According to the Australian Automobile Association, nearly half of all Australians now own a car. Just 13% of us use public transport to get to work, says the Australian Bureau of Statistics. We’re a nation that likes to own cars and drive them. Everywhere.
Monique Conheady, founder of Flexicar, has a vision to change the habit of car ownership in order to build a $2 million revenue business. In 2005, she launched the company, initially called Flo Carshare, in order to introduce to Australia the concept of a pool of shared cars for short journeys.
“I don’t see hire cars as being our competition. I see private car ownership as our competition,” she states. “Flexicar is for local people – you usually hire a car if you’ve travelled interstate. We are cheaper, cleaner and easier than car ownership.”
“I’ve always had a big vision for the concept, for it to be part of mainstream public transport options. We want to become part of an integrated public transport system, with trains and trams.”
But, surely, a system that enables car use is reinforcing the use of cars over public transport? Conheady thinks not.
“Yes, it might increase the amount of driving by some people, but the net impact is much bigger than that,” she insists. “This is particularly for ‘second car families’ who have a second car just for occasional trips.”
“There’s a green element in sharing a car with your neighbour and it makes you think about your trip a bit more. If you pay for it each time, you think ‘do I need the car for this?’ It encourages people to catch public transport more.”
The Flexicar system works by having cars dotted around the city in conveniently-placed parking bays. People sign up for membership – around 3,000 are currently on Flexicar’s books – book online and are given a swipecard, which they use to unlock the cars and deactivate their immobilisers.
The point of difference with hire firms, as Conheady points out, is that you can use Flexicar by the hour. It costs $10 for an hour, with people using the cars for an average of three hours.
“You’re not tied to the hours of a car rental depot – you can swipe in at 6am to go to the airport,” she says. According to Conheady, the cost of Flexicar is favourable compared to car ownership too – she says it costs $8,000 to keep a Toyota Corolla on the road for a year, compared with the $100 to $200 for Flexicar usage.
As Conheady admits, the benefits of Flexicar aren’t easily summed up. She found that a smart marketing strategy, heavily focused on word-of-mouth, was needed in order to switch driving patterns.
Educating the market
“We had to educate the market before we could do anything,” she says. “The traditional modes of advertising didn’t really work because you need an explanation of the concept to understand it. You need a bit more than an ad on a tram.”
“We always ran with the ‘cheaper, greener and easier’ message. We do a lot of email marketing, social media and bit of sponsorship. We don’t seek to have our logo everywhere in our sponsorships – we want tickets to give to our members so that they can take someone to an event and maybe have a conversation about Flexicar.”
“Our best source (of new customers) comes from referrals. That’s because you need a conversation to explain how it works. Our existing customers are extremely precious. We have spent a lot on customer service.”
Conheady says that the company’s customer service ethos is “all hands on deck.” Every one of Flexicar’s 12 employees has interaction with customers.
“I’m involved with handling calls on Wednesday afternoon, which means that someone had to cover for me to have this conversation with you,” says Conheady. “I hold it as a key priority – at every team meeting we bring up issues and everyone spends time on the phone with customers, even if they work in IT or marketing. We want that constant interaction with customers.”
Forming the idea
Conheady’s formation of Flexicar with four university friends appears unusual given her background – she worked as an engineer and project manager in the infrastructure sector.
However, she says that she grew up in an entrepreneurial family – her father owned his own business – and was always sharing business ideas with friend Tim Watts, a co-founder of the Flexicar.
“I was living in London in the late 1990s and Tim was in Boston,” she explains. “Our friendship was based on entrepreneurialism – we still throw ideas around now.”
“We saw the Flexicar idea in Zip Car, which was around in Boston at the time. It was around the time of the dotcom boom, so we were interested in that, but it was also the concept of sustainability – both financial and social.”
“I thought the idea was cool and thought how it could work in a city infrastructure, enabling people to do things differently and more productively. I saw it as the missing link in transport options. There was nothing like it in Australia at the time.”