ive “moments of truth” are essential to deliver the seamless experience customers demand
Across Europe, auto manufacturers, start-ups, established rental agencies and dealers are rolling out car subscription offers to keep pace with rapidly growing customer demand. Berylls estimates that total annual new subscription contracts will soar from between 210,000 and 230,000 in 2022 to as many as 4 million by 2030. Many of these potential new subscribers currently do not own a car. In January 2022, Berylls’ Vehicle-as-a-Service (VaaS) survey of 2,040 German consumers found that 13 percent of today’s non-car users would be interested in VaaS, adding 1.3 million people to the market.
On average, current subscription customers are between seven and eight years younger than car buyers, and their wish to own a car is being replaced by a desire for convenience and flexibility. Increasingly, these consumers are demanding a highly digital product offering and the kind of customer experience they have come to expect from the likes of Amazon, Zalando and Netflix.
Car subscription ticks all the critical boxes from their point of view. Vehicles are often available straightaway from an existing fleet, within minutes of ordering online. This is a welcome contrast to purchased cars, which can take as long as a year to be delivered because of chip shortages and other supply-chain issues. Typically, it’s a short-term commitment, where instead of being locked into a multi-year credit or leasing contract, customers can opt for a minimum period of as little as one month.
Not surprisingly, Europe’s subscription market is becoming increasingly crowded, with carmakers such as Volvo and VW competing with rental agencies and a growing range of innovative start-ups.
What these different players and subscription models have in common is a shared challenge. To win in this market, you have to differentiate by delivering a stellar, fully-digitalized customer experience as well as having the right vehicle offering and monthly rate.
We have identified five customer “moments of truth” which together deliver the kind of experience that people expect when they take out a subscription. The common theme connecting these moments is digitalization, in a market where customers assume they can select and pay for a vehicle entirely online with no need to phone a dealer or see the car.
Simply providing a standard online service won’t be enough to differentiate your offer from the competition. The winners in this race will be those companies which build the right digitalized features into their subscription platform – and build them well – to deliver a truly bespoke customer experience.
A clear strategic focus is essential for future champions in a subscription market that is becoming increasingly crowded. At present, too many entrants are in a gold-rush mood, pursuing an undifferentiated me-too approach for fear of missing out. Yet simply copying a relatively successful competitor’s subscription model won’t be enough to emerge as one of the winners. Our five moments of truth are critical for delivering the level of service that will give your subscription offer the edge, in a market where tomorrow’s champions will be fully digitalized and focused on delivering a superb customer experience.
