In the past a consumer would typically choose between manufacturers to pick from a range of models and then decide whether to buy outright or use a Finance option.
Not anymore.
Flexible ownership means that drivers will be able to switch from one vehicle to another on a single contract, so today they could be driving a BMW X5 and next week choose a Kia Sportage. Heavy duty 4x4 for Winter? Convertible for Summer? Some months they might decide it makes sense not to have a car at all.
As more competitors enter the automotive market from around the globe, making sure your comms are suitably personalised is more important than ever before. And we know from experience the numbers stack up. Being more personalised increases engagement by 11%*.
And of course, flexible ownership isn’t the only answer. It won’t be for everyone. Taking the time to introduce and explain the idea will give you the chance to gather data to learn more about who’s interested and what else they’d like to know.
As a proposition it’s still niche. Awareness in America is running at about 40%, appealing most to young females on a low income who don’t want to own their car. In the UK, however, it’s far less at 22%** with one of the key barriers being that 41% of consumers still want to own their car.
The faster you understand what Flexible customers look like for your business and how their ‘user-ship’ behaviour differs from the more traditional customer, the more easily you’ll be able to segment audiences to send timely and relevant content.
Targeting the Flexible ownership market provides you with the opportunity to combine the best of automotive CRM with what can be learnt from other subscription CRM Brands.
However, while subscription CRM best practices have many similarities with automotive CRM, you’ll still need to define, develop, and understand the customer journey; will still have to educate, and inform, as well as test, and learn. And lastly, you’ll still need to use nudge theory to encourage customers to purchase.
Flexible ownership might change how you approach loyalty and the retention strategy; it remains to be seen whether this proposition will make consumers more Brand loyal (or perhaps, less?). And Brands are still going to win or lose consumers based on their overall customer experience.
Other subscription services are often very price/offer driven (like those we see in telco or utilities) but we’re yet to fully understand if this will be the case for flexible car ownership. It may be that compared to traditional car ownership, price competitiveness, (and online comparisons of offers), could play a larger part in attracting or losing customers.
Customer lifetime and vehicle lifetime value may also be different in a post-flexible ownership world. Understanding profitability for vehicle and consumers will be paramount in understanding the value this new way to drive brings to Brands.
Today, usage data like location, mileage, oil change etc is not available for use in targeting and segmentation but with flex ownership, how a consumer uses their subscription will be key to unlocking the right mix of timeliness and relevancy for your communications with them.
Contract terms will drive some behaviours especially if there are fewer restrictions around termination dates and what was once a linear customer journey will most likely be disrupted. Although key points of risk will still be at order, pick-up and end of contract, early indicators of behaviour at any stage will provide an opportunity to intervene in near real-time to impact ongoing decisions.
We are expecting more of the relationship will be through the use of apps or online, rather than with the car dealership, which means more data should be available. Data like choice of cars, add-ons, options, availability and order journey. If you can capture this data at the right time, you’ll be better placed to understand what the customer is considering or doing vs the limited visibility we have currently. And with improved understanding comes enhanced engagement. Engagement that will add true value for you and your customers.
Lastly, understanding the inflection between consumers that might switch from ‘ownership’ to ‘flexible’ or visa-versa will be instrumental to your overall CRM strategy. Just as we would when we consider prioritising messaging for example when service messages take priority or when a new car launch message is the priority, we will need to be ready to upweight ‘flexible ownership’ vs. ‘traditional’ ownership methods in our targeting.
From our perspective, this new driver proposition plays beautifully to the strengths and principles of CRM – understanding your audience and their behaviours, developing the appropriate customer-experience, continuing to learn, and using data to inform future decisions.
Want to know more? Come and speak to us, here at Transform. We’d love to be part of your journey.
Why us?
At Transform we have 30+ years’ experience in automotive and subscription CRM marketing, working with Brands such as Sky, BT, Virgin Media, alongside Hyundai, Toyota, and Mazda.
* https://www.benchmarkemail.com/blog/personalization/
** Source: YouGov July 2021 UK Car Subscription Insights
