How Dealers Can Do Subscription Cheaply, Easily, and Successfully

January 17th, 2020 | by Diptii Tiiku, Senior Director of Corporate Marketing | Posted in: Insight on Things

Dealer Subscription Model

We often talk about how a Shared Mobility platform can open up many new opportunities, and subscription is one that is ripe for the picking.

Subscription services have been out for a while and enable the customer to benefit from “the right car at the right time” – a luxury car to impress, a pick-up for hauling, and a minivan for unexpected family visits – all available whenever you need it. And with the recent pandemic impacting the current state of the economy, the car-buying public is becoming more hesitant to commit to a vehicle purchase or even to a multi-year lease.

For dealers, it has the benefit of supplying a vehicle to a customer regularly at a no-haggle price point. This means that the customer’s ‘joy’ of a new car happens much more often, with none of the customer experience problems associated with a traditional vehicle purchase.

There’s a downside to all this convenience, and that’s cost. Having to keep up a fleet of vehicles for every customer’s whim on short notice is a logistical challenge. Customers balk at a price point that is significantly higher than a monthly payment, even if they are already paying most of the difference in insurance, maintenance, and vehicle registration fees.

Interestingly, many subscription operators have found that after customers try a few vehicles, they settle into one that they like, with occasional changes on an as-needed basis. Using this thought suggests dealers can offer customers occasional use of a vehicle that they might need or want to try. As an example, $150 a month could buy four days of vehicle use a month – perfect for an occasional need of a pickup or minivan, to try out the latest model, or a service loaner.

It’s very easy to imagine that such a subscription package could be sold in the business office as part of a customer’s payment on a new vehicle.  A customer could buy the sports car they always wanted, yet remain guilt-free when practical realities call. Or the reverse – the minivan owner can relive their sports car dreams.  A subscription package like this could deliver a real customer benefit that is exciting and practical.

Benefits for the dealership are numerous:

  • Customers come into the dealership regularly, increasing loyalty
  • Customers are periodically test-driving new vehicles on their own volition, planting seeds for the next purchase
  • Dealers can easily integrate a subscription program into an existing Shared Mobility operation
  • Subscription payments equal regular cash flow for dealer operations

Learn how you can use Shared Mobility to strengthen your dealerships retail opportunities, download A SWOT analysis for dealers.” Or contact our expert team at Ridecell directly to understand more.

Author: Diptii Tiiku, Senior Director, Corporate Marketing, Ridecell

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