The rise of new mobility services

Subscription Payments, Trending topics | 12.10.2017

Transportations, car industry, travel industry…the sector of mobility rises thanks to the revival of its marketing techniques

An airline (Swiss) that launches a subscription offer, a car manufacturer (Volvo) who offers to rent its last car prototype via an application, another one (Nissan) who provides a car sharing service…transportation brands and car manufacturers get creative to win back their customers, seduce new ones and adapt to new expectations and new ways to consume that are rooted in an experience of complete mobility.

A general context that facilitates change

Just like when planets align, multiple parameters seem to have met to push the transportation and car industries to transform :
A ferocious competition developed in long distance travel businesses (low-cost airlines, long distance carpool systems and buses that replace trains) but also daily transportation businesses (private car services that managed to conquer customers who didn’t usually take taxis, carpooling on the way to work, and easy car rental services such as Autolib).
The success of the new offers comes partially from its competitive prices (Blablacar vs SNCF, EasyJet vs Air France…) especially when customers are more and more receptive to price points, in a tense economic context where the question of buying power is at the center of the discussions.
…Which also meets brand new needs, often linked to Millennials but that actually reach a bigger part of the demographic, active people with an urban lifestyle, seeking freedom, instantaneity and customized services…in other words, offering a way of consumption that matches internet’s speed !

Experience mobility instead of a simple car or transportation

It seems that all brands (airlines, railway transports, car manufacturers) understand their future is not anymore about selling a trip or the means allowing this trip but more about selling a true experience of mobility from end to end : from your doorstep to your point of arrival and from your return point to the start, from a short two hour afternoon trip to a weekend, a business trip or a long holiday. The motto is : easiness and freedom !
The similarities with the hotel industry (hotels and vacation rentals) that went through a similar transformation show how the conservative players of the industry opened up to the new offers and ways to market them. Among these innovations, subscription payment can be found, a way of consuming that stands out because of its specific ability to adapt to all sorts of goods or service.

Subscription versus yield management

Subscription meets the customers’ expectations by matching their needs and by offering the appropriate services. It equally meets corporation’s expectations in terms of lifetime value client or even of finance, allowing them to win over clients but also to sell each unit (a car or a transportation ticket…) and to avoid unnecessary losses.
Prior to subscription, the way to meet these expectations was the yield management : a train ticket bought out of rush hour at a less comfortable seat costs less, on the same line, than a first class ticket bought during rush hour, another example would be how a car can have different multiple price points according to the options added.
In the end, both techniques, seem to reconcile : multiple brands offer different formulas, similar to options, that allow to set a low price point, in order to raise it according to the options added by the consumer. That is the case of CanaPlus that provides with 4 offers to which it is possible to add packs (sport, tv shows…).

New ways of consuming are born from these big transformations, on the other hand something stays unchanged : the fact that we pay for what we consume, payment being the foundational act of the relationship between the brands and the consumers. However, our payment habits need to change. In the sector of mobility, instantaneity and flexibility, it is impossible to imagine a payment with check or to make a payment all over again at each new use of an application. The payment players, thanks to new technologies, are now able to provide payment facilities adapted to new business models and corporations.

PART I – Digital transformation as a marketing and sales lever

How to run a successful subscription business

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