Industry Insights

Car Subscription Business Model: Operational Model and Role of Technology

April 27, 2023
10 min

Continuing our series on how to build a successful car subscription business model, in this article, we’ll look at the operational model and the role of technology in its success.

If you’re reading this article, you’re probably considering subscription as an option for your fleet, but before diving in, you should make sure to have a well-designed operational model defined early on, as this is crucial for the success of any automotive business.

Starting early with a small fleet size can make it possible to manage with manual and multiple systems that aren’t integrated, but as your fleet grows, the complexity of operations increases. Scaling becomes impossible without the right integrated tech solutions in place. When your fleet reaches a certain size, your manual processes will always become a bottleneck that hinders growth. Therefore, it’s essential to start thinking about technology and how it can support your operational model early on. By selecting the right technology solutions, you can automate and streamline key processes, improve efficiency, reduce costs, and enhance the customer experience, which will help you scale your business and meet the demands of your growing fleet. This can also help you keep up with the competition and stay ahead of the curve in a fast-evolving industry.

In this blog, we will discuss the key elements of building a successful operational model for your car subscription business. We’ll explore the importance of evaluating your current systems and processes, the role of technology in car subscription, and implementing new tech that works with your operational model. Understanding these key elements allows you to create an operational model that works for your business and appeals to your target market.

Understanding your Business Needs

When it comes to building an operational model for a car subscription business, understanding your unique needs and goals is key. Before diving into the specifics of possible tech solutions, it’s essential to take a step back and evaluate your current systems, tools, and resources. This includes taking a critical look at what’s working well for your business and what isn’t, and identifying areas that can be improved. It’s important to be honest with yourself about the operational pain points you’re currently facing and what you need to get ahead.

Start by evaluating your current systems and processes, highlighting your pain points, and identifying processes that could prevent you from scaling up your operations in the future. Then you can make informed decisions about changes you need to make or the technology you need. During this process, remember that while technology can automate and streamline key aspects of your business, adding too many different tools and systems that function separately will actually create more work and will ultimately become impossible to scale with in the future.

The Role of Technology in Car Subscription

Technology plays a key role in any car subscription business. In fact, it’s crucial to its success. A well-implemented automotive solution should, as a minimum, streamline operations, reduce costs, and enhance the customer experience.

When it comes to choosing the right tech, look for integrated, highly customisable solutions. Using too many separate systems will create operational inefficiencies in the long run and make it even more difficult to scale your business. Even white-label solutions don’t work at scale in car subscription or new mobility models because of their inability to adapt and integrate to specific systems, processes, and operating models. Instead of using a one-size-fits-all approach, focus on finding technology solutions that can be tailored to your specific needs and processes, and look for solutions that are built around your specific operations from the ground up and solutions that can always be customised easily. To that end, finding a tech partner rather than a provider may be better.

The right tech solution can offer many benefits to car subscription service providers. By leveraging automated systems to manage inventory, track vehicle usage, and monitor maintenance schedules, you can streamline their processes and reduce manual errors. This can lead to improved efficiency and resource optimisation, allowing you to provide better service to consumers. By automating tasks such as billing, contracts and fleet management, services can operate more efficiently, as well as reduce overall costs.

Implementing well-integrated technology can also enhance the customer experience. Providing easy-to-use mobile sites and self-serve customer accounts can make it easier for users to sign up, manage their subscriptions, and communicate with support staff. Data analytics can then be used to personalise services and offer customised recommendations to consumers leading to increased loyalty and retention.

Moreover, technology can be used to improve safety in car subscription services by tracking vehicle usage and identifying unsafe driving behaviours. This can help you take proactive measures to prevent accidents and reduce risks.

Implementing Technology in your Operational Model

The first key step is to define your objectives and goals for implementing technology. This involves assessing the areas where technology can be most effective, considering the costs and benefits of implementation, and developing a plan to integrate technology into your existing processes.

During this planning stage, it's important to identify potential challenges and risks that may arise during the implementation process. It is equally important to assess and select the right tech solutions for your business and to research different vendors to find solutions that best meet your requirements. When evaluating vendor capabilities, it's important to assess the scalability of the tech solution and its ability to accommodate future business needs, as well as the costs associated with implementing it. This includes evaluating both upfront and ongoing costs over the lifetime of the solution, such as licensing fees, hardware and software costs, and ongoing maintenance and support. It is also crucial to test and evaluate the tech solutions before implementing them during this stage.

Source: BCG Analysis

Once you have a plan in place, the next step is to implement the technology and monitor its effectiveness. This involves selecting the appropriate technology solution, configuring it to meet your specific needs, and training your staff on how to use the new platform. Ongoing management is critical, as technology is constantly evolving and requires regular updates and maintenance. This includes monitoring and analysing the performance of your solution, making necessary adjustments to optimise its effectiveness, and continuing to train your staff to ensure they have the necessary support to use the technology effectively.

Adapting to Market Changes

It is important for businesses in the automotive sector to adapt to the changing trends in the market. The right tech solution can be a powerful tool for helping subscription services adapt to these changes, whether due to shifts in customer demand or changes in competitor activity. Car Subscription, for example, is such a highly dynamic product, in which the customer expects a smooth, fast and seamless experience, that it is almost impossible to build a successful product without implementing a modern and integrated platform.

Tech solutions can provide real-time data insights that can help you monitor customer behaviour over time. This can help you understand changing consumer preferences, so you’re better equipped and informed to adapt to changing trends. For example, if customers show a preference for electric cars over petrol, businesses can use this data to dynamically adjust their fleet offerings to meet customer demand.

Another vital benefit of a well-embedded tech solution is that you can streamline operations and reduce response times by using automation tools and digital workflows. This not only massively reduces manual operational tasks and overhead, but also creates a seamless and connected customer experience.

In addition to these benefits, technology can also help automotive businesses stay ahead of the trend by enabling them to anticipate market changes before they happen. By using predictive analytics and other advanced data analysis techniques, businesses can identify emerging trends and respond proactively rather than simply reacting to changes after they happen. By leveraging these capabilities, businesses can stay agile and respond quickly to changes in the market, ensuring that they remain competitive and meet the evolving needs of their customers.

Technology already plays a fundamental role in the car subscription business model and this role will grow even more important. From improving operational efficiency and reducing costs to enhancing the customer experience and responding to market changes, technology provides a wide range of benefits to businesses in this industry. By implementing the right technology solutions and leveraging data insights, car subscription businesses can improve their ability to meet customer demands.

Remember it is also crucial to assess your individual business needs and goals to select the right tech solution for your product. A successful car subscription business requires, not just the tech, but a well-thought-out operational model that considers factors such as fleet management, pricing strategies, and customer support. By combining the right operational model with the right technology solutions, businesses can create a winning formula for success in this rapidly evolving industry.

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Dan Kirby

Commercial Director


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