10. November 2020, 12:56 Uhr | Frank Föge
Subscriptions are in vogue. Now subscription models for cars are also coming onto the market.
Buying, renting or leasing - these were the options for driving a car until now. But now, for many consumers, flexible usability is more important than individual ownership. With its Clyde car subscription service, the AMAG Group is breaking new ground in response to this trend.
Up to now, the options for purchasing a car were manageable. Either the vehicle is bought or - if you want to avoid the capital commitment by the acquisition - leased. In both cases, the user is bound for the long term. Selling a vehicle after a short time is usually associated with a very high loss of value and therefore usually not an option. Not to mention the high costs for purchase, registration, insurance and resale.
Although the leasing alternative avoids tying up capital, it is just as long-term and therefore inflexible. Leasing contracts are designed for three or four years and include a fixed mileage. In both cases, the user is additionally burdened with expenses for insurance, vehicle tax, repairs and maintenance. The only alternative to be able to use your own vehicle more quickly and flexibly is the classic car rental. However, this is comparatively expensive.
During the implementation of Clyde, AMAG was supported by Namics, a full-service digital agency in the technology sector. Clyde was to be implemented 100% digitally and provide the customer with complete transparency regarding services and subscriptions. »We had the cars. We had the service processes. We had the financing experience and we knew the car rental business pretty well,« explains Remo Girard, Head of Technology & Product at mobility service Clyde.
The particular challenge was that the project had to be implemented very quickly. The goal was to develop a Minimal Viable Product (MVP) within six weeks. First of all, it was important to develop a functioning front-end in order to get off to a successful start. After six weeks, the project partners could actually go live.
When the subscription service was launched, some processes, particularly at the back end, were not yet automated, but had to be carried out manually in some cases. To drive automation, Clyde needed a solution designed specifically for subscription management, so the company turned to Zuora. In particular, the company needed to automate its billing process as quickly as possible. The company, a pioneer of the Subscription Economy, provided Clyde with automated invoice processing out-of-the-box.
The Zuora system acts as a third cloud between the CRM and back-end ERP systems. At Clyde, it integrates seamlessly with Salesforce. »Thanks to Zuora, we can also add various other products to subscriptions,« says Girard. »And we need to be able to suspend a subscription with all the products it contains if necessary. Zuora is the only system that makes this possible so far.«
A three-cloud architecture is the optimal solution for companies that want to implement Subscription Economy business models.
The system was successful from the start: the number of subscribers increased rapidly, and at the end of the six-month pilot program the results exceeded the targets by about 50%. The company is now looking to expand Clyde with additional services. For example, parents who have subscribed to a car can add child seats.
Cyclists will receive a bike rack to transport their two-wheeler. Additional services, such as a parking garage subscription, are also already in preparation. In the future, the user experience will be further improved. For example, changing vehicles during the subscription period is to be simplified.
»We had the cars. We had the service processes. We had the experience in financing. And we knew the car rental business pretty well. We only needed Zuora to bring all our strengths together in one platform,« says Remo Girard, Head of Technology & Product at mobility service provider Clyde.
Right at the start of the car subscription, Clyde has already optimized the user experience by recording the relevant data. The key KPIs identified were the conversion rate of customers on the website and, for existing subscriptions, the duration of a subscription. This is currently between six and twelve months.
»Now that we have achieved our initial subscription targets, we are ready to expand our investment,« Girard explains. »In any case, the system is ready to scale up.« One thing is clear for the Head of Technology & Product at Clyde: »Our offer is the subscription and not the car as such.«
is Country Manager at Zuora. Since 2017, he has been responsible for Zuora's strategic sales in the DACH region as Strategic Account Manager. His expertise in the consulting environment and his IT and software know-how make him a competent contact person for digital transformation in companies.