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The Subscription Supply Chain: Where Do Dealerships Fit?

The subscription model sounds like every driver’s dream come true—the flexibility to switch vehicles as desired without the constraints of a rigid lease. However, as the temporary transportation industry expands, subscription has come under scrutiny. It’s expensive. It’s a liability.  And, yet, there’s incredible potential (along with demand) for this service.

At the core, most dealers express worry they will be left out of the supply chain. If customers use their phones to quickly request the exchange of a vehicle, they won’t need to step foot in the dealership. This lack of a face-to-face interaction reduces opportunities to show customer new offerings. There’s also concern over the loss of valuable service revenue.  Since the customer isn’t getting maintenance done on a vehicle, profit must be gained through other channels.

 

Although subscription looks threatening, dealerships do have ways to put the ball in their court.

Here are a few tips for capitalizing on the subscription model:

1. Ensure the price point of your subscription program makes sense with your dealership’s costs and customer’s expectations.

2. Share valuable customer insights with your OEM.  Local dealerships can offer a more in-depth analysis of vehicle trends and customer wants within specific regions. By creating a more customized subscription, you can ensure brand manufacture loyalty.

3. Consider other ways to attract the community to your physical store as mobile takes over. From bounce house fundraisers to coffee shops at the counter, dealerships need to promote a positive environment.  Customers don’t like high-pressure sales environments, so use this opportunity to change perceptions of the typical dealership experience.

4. Invest in versatile technology, such as TSD’s newest dealer solution, Cirro. Having flexible, cutting-edge technology will help you to seamlessly adjust as you expand your portfolio to include subscription, shared fleets, and anything else that’s on the horizon.

By adapting to new models of business, dealerships can go beyond just surviving subscription and truly begin to leverage it.

 

 

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