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.
Subscribers need to be “wowed” by the superb, transparent digital experience they enjoy from the instant that they sign up. It is not just the absence of hidden costs for wear and tear and other small-print items that they should notice. More positively, all the most successful subscription offers make the customer feel pampered with a premium service, whether they are providing a white-glove delivery or an immediate answer to a technical query via the helpdesk email. Satisfy the subscriber by paying attention to the detail of retail and they won’t mind paying a bit extra, so long as the fees are clear and part of the upfront bundle.
The last thing subscription customers want is responsibility for the familiar headaches of car ownership, from tax and insurance to tires, maintenance and repairs. These items are all included in the typical “hassle free” package, while in future even electric charging could be billed as part of the subscription deal, saving customers the trouble of paying as they drive.
They also don’t want to spend time making very detailed choices about the kind of car they want. For example, it’s common for subscribers only to be given the main choices which are fun to select, such as brand and color. Subscribers also expect instant or at least extremely rapid delivery, including to the doorstep, in contrast to the current long waiting times for purchased cars, especially electric vehicles.
Subscription services should be flexible enough to meet each customer’s personal needs and preferences. These might include anything from requiring a car just for the winter months, because the driver uses a bike in summer, to wanting to test a new model before committing to a purchase. For example, a recent survey for the UK’s What Car? magazine found that 45 percent of respondents thought they would be more likely to buy an electric vehicle if they could try it first on a subscription deal. Volkswagen is one company responding to this demand by launching its subscription offer with the new ID.3 and ID.4 electric vehicles.
Subscribers may only be signing up for a few months, but providers still need to make the customer experience as personalized as possible. To that end, customers should be allowed to pre-load configurations so their selected car “knows” who they are as soon as they turn on the engine. Seats are adjusted, the radio is set to favorite channels, and the home address is installed in the sat nav. Providers should also add a human touch via a contact person the customer can email or call with key questions, such as scheduling a repair or changing tires. Customers also appreciate making it simple for them to install their own Spotify account by registering via a QR code rather than insisting on entering a complicated password.
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.