Convincing Lessors with Digital IntegrityFri, 09/01/2017 - 12:55
Launch a physical company, then digitalize processes to keep up with technological advances. Master operating in your home country, then extend to other markets. This cookiecutter business strategy has worked for many businesses. But car lessors identified the market need, supplied the solution and were halted by a reluctance to accept that solution.
The obstacle is a deep-rooted Mexican value for vehicle ownership as a status symbol. LeasePlan combats reluctance with digital integration, offering shorter response and processing times to simplify car leasing by supplementing technology with the human touch The company's CEO, Roberto Varallo, says: “As soon as we get around the ownership obsession and perceive cars as tools to meet objectives, companies will turn to leasing to contract cars.”
The size of the market within Mexico means the number of fleets could be up to 700,000 vehicles, Varallo says. “But this is not the size of the market’s potential. We hope that in two or three years we will see the market welcome the leasing model and have this model’s penetration exceed the current 15 percent.” To encourage people to embrace a solution that can financially favor drivers and simplifies fleet management for companies, LeasePlan launched its physical company in Holland, went on to master the European market and extended to other markets. Following standard practices and learning from experience in other markets is a sound business strategy, a strategy LeasePlan has observed while digitalizing its processes. “Europe taught us that people are important for certain moments of the transaction but human resources can be maximized and driver experience improved, if we also provide the option of digital contact when appropriate.”
In an increasingly digitalized industry, delivering a superior tech-enabled service is essential to establishing a leading market position. “We are therefore actively investing in automation and customer-facing technologies to enhance our service offerings,” says Varallo. A mobile app for LeasePlan drivers is part of the digitalization of the physical company. Drivers can consult their lease contract or car information, request repairs or maintenance and speak to the wellallocated employees regarding insurance when human contact is comforting. “Lower than 5 percent of our leased fleet uses the app.” The company’s overriding objective is to encourage the people that have downloaded the app to use it.
Having practiced elsewhere is also helping LeasePlan in its digital focus for 2017. The rising trend toward mobility alternatives such as Uber and Cabify requires cars and will need the support of leasing companies to grow. “Shared mobility companies have similar internal business models and our European operations have already targeted this market,” says Varallo.
Europe was also the guinea pig for the company’s Operative Client Management (OCM) now being used in Mexico. LeasePlan will continue to invest in integrated systems as long as they provide added value for customers as well as increased internal efficiency. In March 2016, the company began developing technology platforms that manage workflow for suppliers, drivers and clients. “When a car arrives at a workshop, or an insurance quote is approved, the system is updated and generates full control on this specific process, also providing alarms when there are delays. This allows our personnel to dedicate themselves to accompanying customers.” Shorter processes save time and results in fewer tickets for LeasePlan to resolve.
“SME and private leasing markets are accelerating, especially in Europe. LeasePlan will meet this demand by creating a global private lease and SME offer, building on several successful propositions in key markets,” says Varallo. SMEs save money by being able to contact LeasePlan for a quote digitally. This segment grew in the first quarter of 2017, and could be supported by a leasing solution called FlexiPlan, launched in the same year to offer more flexible contract duration and mileage. Digitalizing methods and boosting SME participation should lead to LeasePlan’s professional gain and encourage Mexicans to trust leasing as a concept. Varallo says. “We expect to grow 16 percent in 2017, to 24,000 cars from 21,000 by the end of the year. We need to reduce costs and be efficient, planning our internal processes so as not to be overwhelmed by growth. As defined by our headquarters, this is ‘smart growth.’”