Finance options such as PCP have generated a change in perceptions towards car ownership, with what was once considered a significant capital purchase to save up for, being reduced to a Direct Debit alongside mobile phone and utility bills.
Pay for what you use, in the future
Although an interesting comparison, the car differs from a mobile phone in a number of ways. It brings challenges with the significant cost to build, but also opportunities to offset that with new models of car ownership based on the fact that we don't need one available at all times. PCP has helped change the car from a capital purchase to a monthly expense. However, the significant additional capital requirement is leading car manufacturers to explore further options for better asset utilisation, linking the use of the vehicle even closer to usage with charging in the form of a subscription model.
A subscription service may seem the logical place for this to go, especially with the increased opportunity to own the customer and all the options that come with that. To this end, subscription is being trialled by many manufacturers, but is currently still too expensive and difficult to deal with logistically. Partnerships, for example, with hire companies, may provide short term opportunities but it will be in the future where this has the opportunity to become mainstream, fuelled by advances in autonomous driving.
Reward customer lifetime value, now
Car manufacturers have to act on this opportunity. From new product developments, extending beyond the sale and into the ongoing customer interaction. Product evolution has provided the ideal opportunity to add value to the ubiquitous 'My[Brand]’ functionality, which now has its place as a centralised tool for initiating the sale. Once these foundations are in place, retailing processes can be deployed to make the most of the situation, supported by new propositions personalised to the customer.
The car, as technology, is changing more rapidly than at any previous time. Many of these developments demand ongoing interaction with the owner and so have created an opportunity to develop a new range of added value services. Car manufacturers should use these opportunities to redefine their value chain, differentiating through the inclusion of added value services and innovative finance options. The Auto Zebra Assisted Selling approach provides the six basic pillars required to respond to this situation and an approach to attract the people and processes to make it happen.