- Timothy Fields

To build a larger base of loyal customers, Volvo Rents employs an 80/20 marketing program that encourages its franchised retailers to provide superior customer service to its best clients.

"Pick your customers before they pick you," said Nick Mavrick, a marketing executive at Volvo Rents.

Based in Asheville, N.C., Volvo Rents is a division of Volvo Construction Equipment North America. The company markets a comprehensive line of equipment and tools for sale to the construction, commercial, industrial and homeowner markets, along with rentals. Equipment includes such items as wheel loaders, backloaders, pipe layers, paving machines, excavating equipment and more.

From June 2005 to June 2008, Volvo Rents increased equipment rentals from 40,000 customers and 162,000 transactions to 150,000 customers and 1.1 million transactions. The company has 81 Volvo Rents centers in North America, 72 in Europe and one in Mexico.

Mavrick attributes the dramatic increase to the company's emphasis on encouraging repeat rentals. Some 16% of Volvo Rents customers represent 89% of rental revenue; the company invests 80% of its marketing dollars specifically geared towards that percentage of loyal prospects. "Our loyalist customer base continues to expand at four times greater rate than the rest of the customer base," he said. "Their average spend is 400% greater than the average customer; they pay a 15% to 20% transaction premium; and our operating margin is 400% greater than the average."

Among various initiatives, store owners and managers have hosted steak barbeques at stores and have taken top customers to the Super Bowl, Nascar races and other major events. Volvo Rents also provides equipment deliveries on weekends that arrive in time for construction crews to start working.

"Our best customers—loyalists—pay a per-transaction premium to do business with our stores," said Mavrick. "We treat them as VIP customers, and they appreciate that the service offering is customized to their unique needs. I would much rather spend our marketing dollars on return customers than on ‘testers' because we have increased our profitability by following the 80/20 Rule, that 20% of customers create 80% of revenue."