Two years after launching with huge fanfare, vehicle subscription services have been proclaimed a failure, as consumer response has been lukewarm at best. Nonetheless, I predict automakers can innovate to create a subscription model that will help them grow revenue over time.
The reality is that getting subscription offerings right is difficult. Selling them means learning new skills and reengineering your lead-to-revenue infrastructure.
Consumers often see vehicle subscription offerings as nothing more than a reduction in lease time to 12 months, without any additional value. The critical innovation automakers must tackle is the value proposition — a shorter lease labeled as a subscription is not enough.
The hallmark of a subscription is that it's a relatively low price point with huge flexibility — the ability to cancel easily, or preferably, upgrade, extend and buy more services.
Two things would make a subscription an actual subscription: First, the ability to change vehicles without negotiations and new contracts. Second, the ability to easily upgrade from a lower-priced vehicle to a higher-priced one, or vice versa. Consider tiered offerings — bronze, silver and gold packages, for example — with corresponding classes of vehicles and the ability to move easily among the tiers.