How to Upgrade Your Automotive Financial Services Strategy to Drive Sales & Profitability
Are you aware that over 80% of car buyers rely on financing to purchase a vehicle? However, very few Original Equipment Manufacturers (OEMs) or dealership groups have fully optimised their financial services strategy.
A robust financial services strategy can be a significant differentiator in the increasingly competitive automotive industry. OEMs face not only increased competition from traditional rivals but also from banks and financial institutions entering the automotive financing market1. Additionally, the rising interest rates and the increasing cost of automotive financing present additional challenges2.
By offering accessible financing options, leveraging financial services to retain customers, and creating new revenue streams, OEMs can position themselves for continued success.
In this article, we will discuss key opportunities to enhance your Automotive Financial Services Strategy and demonstrate how the ddx mobility team can assist you in doing so.
1. Optimise Finance Product Offering
The first building block of any financial services strategy lies in optimising financial products to ensure customers have easy access to your vehicles. Financing options heavily influence purchase decisions, as they demonstrate affordability.
OEMs should offer diverse financing solutions, including loans, leases, rentals, and subscription products, each tailored to different customer needs. Additionally, online tools and applications can streamline the financing process, making it quicker and easier for potential buyers to explore and secure financing.
How ddx mobility services can help:
- Finance product review: ddx can help you identify gaps in your financing offerings and tailor products to meet the specific needs of different customer segments, leveraging internal and external data and market research.
dx can help you identify gaps in your financing offerings and tailor products to meet the specific needs of different customer segments, leveraging internal and external data and market research. - Online customer journey review: ddx can help you identify and address any gaps or friction points within your online financing process, utilising advanced website analytics and user experience (UX) best practices to assess your online channels.
2. Increase Sales From Loyal Customers
A strong financial services strategy can be a powerful tool for increasing customer retention and renewal. With the right processes and communication strategy, OEMs can present new & existing customers with tailored financing solutions and attractive offers, encouraging them to consider new models at a similar price point to their current vehicles.
The ongoing wave of electrification in the automotive industry offers additional challenges and opportunities for customer retention. Residual Values (RVs) have a major impact on the monthly instalments that an OEM can offer with their lease, rent and subscription offers.
How ddx mobility services can help:
- Automotive loyalty program: ddx offers a one-stop shop for strategy, training, events, gamification, equity calculation, and call centre upskilling to turn car buyers into loyal brand advocates.
3. Additional Revenue
Finally, a well-developed financial services strategy can unlock new profit streams for OEMs. Extended warranties, insurance products, and subscription-based services are just a few examples.
Picking the right finance partner, whether this is a captive company, bank or fintech can make a significant difference. When selecting the right partnership, OEMs need to look at finance product range, profitability, risk management and customer service levels-
It is crucial to emphasise the importance of customer data privacy and responsible lending practices as part of any financial services strategy. These not only ensure the long-term sustainability of the financial services offering but also help avoid potential economic and reputational damage.
How ddx mobility services can help:
- Financial services partner review: ddx experts can help you conduct a comprehensive assessment of your current financial services partner or assist you in establishing new partnerships. This includes evaluating the financial services product offering, profitability, risk management capabilities, and customer service levels.
Conclusion
By implementing a comprehensive financial services strategy, OEMs have an opportunity to upgrade their activities beyond selling vehicles and establish a deeper partnership with their customers.
Investing in reviewing or enhancing your financial services strategy will not only drive sales and revenue but also foster stronger customer relationships, positioning you for long-term success.
Ready to transform your financial services strategy and drive sustainable growth?
ddx partners with OEMs and automotive dealerships to navigate the complexities of the automotive financing landscape. We help you optimise your product offerings, enhance customer loyalty, and unlock new revenue streams. Contact us today to explore how we can empower your business to thrive in the ever-evolving automotive industry.
1. Automotive banks: drivers of mobility change
2. Auto Loan Interest Rates Hit Highest Level Since 2009