When Ed Goldfinger joined Zipcar in 2007 as its CFO, he was told the fast-growing company made its money on the weekends. That’s when its cars were used more than 70% of the time.
"Something didn't sit right with me when I heard that," Goldfinger said last week in a CFO Thought Leader podcast. "I thought, 'Gee, if we're making all our money on those two days, is that going to work?'"
Goldfinger and his team dug into the numbers and what they discovered ended up changing the business model.
"There was a way of looking at the business where we were actually losing money on the weekends because of this spike in demand," he said.
The company typically generated $80 for all-day use of a car on the weekend versus $8-10 an hour for use during the week. After the company factored in the cost of moving cars to meet weekend demand and paying parking fees and other costs, profit margins disappeared. Goldfinger came up with a metric he called weekality, which helped drive a strategy to move the ratio of weekend to weekday use closer to 1.5 to 1.
The company offered an overnight weekday program, launched Zipcar for Business, and increased weekend pricing.
"That was really a fun journey for me and the team," he said. "There was no way we could make significant money in the business and profit if we couldn't better balance the use and increase the revenue per car over the course of the week."
In his six years at Zipcar, the company grew from $55 million to $300 million in annual revenue, went public, and eventually was acquired by rental-car giant Avis.
"It's many CFOs' dream to be part of a team that goes public," he said. "Being public has its pluses and minuses, but the experience — the roadshow and all of that — there's a lot of excitement around it."
Managing at scale
Goldfinger started his career as an auditor at KPMG and then joined PepsiCo, a company he credits with giving accounting and finance professionals an opportunity to gain experience in wide-raging roles. In his nine years there, he held half a dozen jobs, both in accounting and planning, ending as CFO of the company's Latin American beverage operations.
"Pepsi is great at moving people from role to role," he said. He left the brand in 1999 to become CFO of Sapient, a newly public company that helped clients transform their online operations.
"Newer tech companies were looking for grown-ups, you might put it — people who had seen what big looks like," he said.
A month ago Goldfinger started at Quantum Metrics, a software-as-a-service (SaaS) platform that helps companies quantify and understand the experience their customers have when they use their website.
"After I took this job, I wanted to send a gift to someone who helped me, so I went online and selected items to ship, and then nothing happened when [I clicked send]," he said. "There was no feedback. So I pressed the button again and again. It's called rage clicking."
Quantum Metrics helps companies quantify that visitor experience so they can avoid bad interactions in the future.
"The company may or may not know I had a bad experience, that I was rage clicking," he said. "They don't know how much pain they're causing or how much revenue they're losing. People may never come back to that site."
Quantum Mertric's revenue has doubled since the start of the pandemic. "The acceleration toward the digital world has made us even more relevant," he said.
To help Quantum Metrics maintain its growth, Goldfinger is trying to identify the right mix of financial and non-financial data its leadership needs.
"You have three stakeholders in any business," he said. "You have customers, employees, and shareholders. All of these have to be successful and value what's going on, so our objective is to cover each of these groups."
One of his team members has already made a useful finding: client companies in which only a few employees access the platform tend not to renew, so the goal is to identify companies that meet this profile and intervene before their renewal date.
"Our renewal rate is incredibly high, about 98% last year, but where there's churn, it's important to know why," he said. "Maybe it's time to spend more time with that customer and ensure they're getting the most use they can out of our platform."
Goldfinger follows what he calls an arc of evolution for managing metrics: data collection, which generates insight, which leads to actions, which produces results.
"That's what I'm always striving for," he said. "How can we make data into insights, make insights actionable and how can we measure results of the actions? Unless we're doing all of those things, it doesn't matter. We could be so insightful, but if we're not taking action, who cares?"