Fleet leasing and management companies face the prospect of losing income streams like service maintenance and repairs, and accident management which will reduce and perhaps disappear as technology changes the needs and behavior of business drivers.
The companies who will dominate as these changes bite, will be those who have identified niche opportunities to make money from client segments, and the solutions will probably leverage a leasing companies existing core competencies.
In this latest video from the May 2016 International Auto Finance Network Conference, Angela Montacute, Chief Digital Officer at Arval, defines the challenge facing fleet leasing businesses, before providing her solution - how Arval and other organizations can identify and exploit the opportunities. The key message from the video is that there is no single solution. The way forward lies in careful segmentation of clients to find the various opportunities which each present.
“Don’t just group by size”, she exhorts. “Segment carefully by who wants what and for what purpose, and in which country and culture; and where geographically they are (city or rural)” she advises.
Montacute is quick to point out for some clients there will be little or no paradigm shift. In a world in which clients choose usage over ownership, employees using vans to transport tools, for example, will be unlikely to want to participate in technology-driven vehicle sharing. The solution is unlikely to work also for non-urban drivers – and for the metal heads – those for whom the driving experience is all important. These clients can benefit from other technology – like the addition of better or more effective route planning.
Segment carefully by who wants what and for what purpose, and in which country and culture
For others – for example those for whom the company car is a low-use perk, there are opportunities to better manage “stock and flow” – to create an additional revenue stream through car sharing. This can be managed through effective digitalization.
There are no shortage of examples in this video about how Arval are preparing themselves to win in a future of technology driven change.
What becomes clear is that like BMW Financial Services who are establishing an innovation laboratory to solve some of the challenges which they see lie along the path to digitalization, Arval too are focused on developing processes to manage rapid innovation - to discover what works.
Arval’s version of the innovation lab, nicknamed “The shed” is based in Paris, and is currently testing ARTEL – Arval’s new telematics capability which will provide the organization with critical data which, among other things will allow the organization to better understand customer behavior and help them to create new products and services.
Montacute has sage advice for organizations which are seeking to embark on a similar journey. “It’s really important to test and learn” she told delegates. “And if it works, roll it out fast. But if it is not working, fail fast, because you can spend a lot of money.“
It is important in innovation projects not to get too wedded to an idea. “Sometimes it’s not the idea that is at fault. It may just be that the time is not right.” she reassures.