Leasecos must improve the customer journey through digitisation
A recent paper from Jato Dynamics - An industry in flux: leasing in the automated age - spotlights the rise in consumer demand for leasing rather than owning a vehicle and concludes that leasing companies must now focus on improving the customer journey to stay relevant.
Jato Dynamic’s paper explores the key reasons behind this sea-change, including the introduction of new technologies, the rise of online retail in general, and the emergence of a consumer who no longer places priority on car ownership.
“People view the leasing model as a more affordable way to drive the car they want.” the paper says.
Current leasing application process putting customers off
A key issue, however, is the current process a customer must go through to lease a vehicle, the fact that they can only get so far via an OEM website before they have to start over again configuring the vehicle of their choice on the leaseco’s site.
OEMs and lease companies must bridge that gap in order to make the consumer’s journey frictionless.
“Over the coming years, updating manual processes and replacing them with automated services will have a huge bearing on the success of leasing companies operating in an increasingly saturated market.” Source: Jato Dynamics.
Falling short of customer expectations
As online shopping has skyrocketed, so have consumer expectations for it. Indeed, 53% of consumers now expect to make purchases from any brand using their smartphone. In 2020, research by Automotive Finance found that 72% of consumers expect to be able to apply for a leasing contract entirely online. But because the consumer can find the supplier with the vehicle of their choice for sale online, they expect to be able to complete the leasing process the same way and through the same website.
But leasing a car online today is a complicated process and not consumer friendly. Not least because of the number of options available on a vehicle today.
Too many options to choose from
For example, the Audi A8 - 50 TDI quattro Tiptronic ProLine is available with 10 different alloy wheel options, while the BMW 5 series 540i xDrive Touring is available with 14 different options for leather seats.
Currently, a customer selects a vehicle on an OEM website and configures it using the OEM’s configurator. They are then shown price and purchase options, including private leasing offers. However, selecting this option typically directs them to an external website where they - again - have to input all their details and the vehicle details. By this stage, many consumers give up.
OEMs and leasing companies must quickly adapt and enhance their digital capabilities and develop the online customer journey. This should be done in line with what customers are getting used to from mobility disruptors such as bike subscription companies, ride-sharing start-ups and a host of app-based providers.
Additionally, providing a fully digitised process will help leasing companies manage costs and meet revenue targets.
You can download Jato Dynamic's full report here (requires email).
Image courtesy of Shutterstock.