Gearing up for a future with increased customer demands and expectations

Millennials and Gen Z have recently become the dominant force in the market, and their importance will only increase. According to projections, millennials have reached a combined income of $15 trillion in 2023, putting them on par with Gen X. Meanwhile, the younger Gen Z generation has just entered the workforce and is experiencing the fastest-growing economic power. They are expected to have a larger total spend than millennials by 2031. In the USA, however, they are already outspending all other generations in the automotive, car rental, and ride-sharing categories. They are less loyal to specific car brands than boomers and silent generation consumers, though. 

This combination of superior spending and less loyalty means millennials and Gen Z will have an increasingly larger impact on automotive spending. Therefore, it’s paramount for OEMs, captives, and leasing companies to understand the preferences of these generations and adapt to a different and more demanding market. 

Almost 60 percent of potential car buyers under 45 prefer to purchase their vehicle online, highlighting the importance of convenience and digital accessibility for B2C customers and SMEs. When today’s buyers look for brand interactions online, they tend to favor reliable brands that offer flexibility, personalized experiences, and affordable contracts. As buying a car is becoming less convenient and more financially challenging for them, automotive finance providers must look for other solutions. That’s why personal leasing, subscription-based usage and flexible financing will become tremendous opportunities, if you do it right. 

End-consumers searching for a vehicle have become accustomed to seamless, transparent, and personalized buying journeys. Innovative companies like Amazon, Apple, and Uber have raised the bar on seamless and reliable experiences for searching, shopping, and financing their products. Consumers can deal with these companies smoothly right from their smartphones. They don’t expect anything less when searching for a new vehicle. If incumbents are to compete in this market, they must adapt to an audience that demands a fast and reliable experience with clear and transparent information at every step of the journey. That includes omnichannel communication, 24/7 support, and relevant social media marketing. 

Additionally, they are very keen on flexibility in terms of contracts and payment options. To cater to these generations’ diverse needs and expectations regarding personal car financing or leasing, various short, long, and flexible subscriptions or contracts are needed.  

Similar to traditional fleet customers, private individuals and SMEs are very busy. It’s no surprise they highly value convenience and time-saving solutions. You can play into this by offering flexibility. Personal leases and financing options, which are less relevant for fleet customers, will hit the spot with this new group of customers. Short and long-term flexible financing options enable you to explore possibilities such as subscription-based contracts or usage-based models.  

Speed can be optimized by offering the ability to pick a different lease model, order extra services, or book a test drive with the same ease as ordering a book from Amazon. 

Another opportunity is to offer better integrated services or all-in-one packages that include leasing, insurance, maintenance, and more. Such added convenience and efforts to improve the consumer experience will become key differentiators in the future. 

Throughout the customer journey, there are ample opportunities to increase engagement with the end-customer. More engagement means more and better personalization options to create tailor-made extra services, offers and upsells throughout the financing contract. For example, 72% of consumers are willing to pay extra for a personalized leasing contract. 

The rest of the decade looks challenging. Quickly adapting to these changing needs and expectations won’t be easy, but the future looks bright for those who do it right.  

On the one hand, we’ve seen that today’s buyers aren’t as loyal to car brands as previous generations. On the other hand, you can expect more of them to make more frequent purchases as they’ve expressed a need for flexibility and change. 

Your challenge ahead is to tie younger customers to your brand again with a hassle-free buying journey, flexible contracts, and a time-efficient customer experience — especially since selling or financing a car to an existing, engaged and satisfied customer is much more cost-effective than acquiring a new one. 

In a top-notch buying journey, every touchpoint matters. Automating services such as maintenance or offering an easily accessible platform with transparent communication and flexible tools are crucial. These tools should allow consumers to edit their personal information and requirements, compare options, and view accurate prices with as few clicks as possible.  

To achieve this, you must prioritize personalization and an integrated buyer experience. By leveraging data and analytics, you can gain a deeper understanding of your customers and provide a seamless experience with a proactive approach regarding contract changes, maintenance updates, and more.  

Fortunately, you are already sitting on a goldmine of data and experience. Now it’s time to build a plan and act. The need to adapt business models, update management systems, and connect all stakeholders to a central experience platform is growing ever more.