A consumer shift toward a more flexible car ownership alternative
HelloCars emerged in late-2015 as Australia's first online car dealership - buying and selling preloved cars online exclusively through its website. Headquartered in Sydney, Australia, the fast growing automotive startup was transforming the used car industry with a technology-driven, hassle-free customer experience long before COVID made online sales not simply an innovation - but a necessity.
With consumer spending habits changing and the humble car no longer viewed as a financial priority among younger drivers, HelloCars sought to introduce a new product into their online dealership that provided a new wave of motorists with a more flexible alternative to traditional car ownership.
It's car subscription program was first launched in May 2019, with the company reaching 100 active subscribers and $100,000 monthly recurring revenue in under 3 months, then onto over $1,000,000 in total revenue within the first year. This is an incredible achievement given car subscription was an entirely new concept in the Australian market at the time.
Setting a new standard for car subscription
While car subscription services existed in other markets, the term was used to describe a number of very different business models. It was Loopit that would offer the the end-to-end car subscription solution that met the needs of HelloCars and its customers. Those needs included:
- Robust customer assessment: For HelloCars, it was important that each customer was fully assessed to ensure suitability before subscribing to a vehicle, however this process had to be seamless and not impede on the customer booking process.
- Streamlined online booking process: Having pioneered online car buying and selling in Australia, it was important for HelloCars that its subscription offering provided the same level of functionality by allowing customers to complete the entire subscription transaction online in their own time.
- Scalable performance: With exceptionally high expectations for growth, it was crucial that HelloCars would be able to implement a software solution that help to grow and scale the business.
- Constant improvement: As an entirely new industry, it was important for HelloCars to align with a technology partner that directly served the mobility space to ensure product innovation kept up with the evolving demands of car subscription as the industry matures.
The HelloCars team initially envisaged developing an off-the-shelf solution based on existing subscription payment platforms, however it quickly became apparent that the unique needs of subscription mobility would require a more purpose-built solution beyond simply recurring payment management.
The goal for Loopit was not only to create an efficient technology platform that performed every essential function for car subscription, but to also do this in a manner that was cohesive with the business approach and processes already present in the car dealership environment, as well as meeting the technology expectations of today's consumers.
The (short) road to success
The instant success of HelloCars Subscription was largely thanks to a structured internal process derived from its existing proficiencies in online car sales that provided the best opportunity for customer conversion. These processes include:
- Leveraging existing sales leads: Even as an online car dealership, HelloCars was not immune to many of the challenges faced by traditional car dealerships - including customers lost as a result of declined finance. In many cases, customers were unable to obtain finance for arbitrary reasons - they may have changed jobs and were currently on probation, or their visa status may not have permitted them to obtain finance. These were scenarios that didn't impact their ability to service a subscription but were otherwise deemed ineligible by third-party financiers. Whereas previously these customers would be unable to transact, HelloCars implemented an internal procedure where business managers would offer car subscription to these customers as an alternative to get behind the wheel. By leveraging these existing sales leads and transitioning them to car subscription, it meant HelloCars was able to convert a higher portion of its existing customer base each month.
- Internal stakeholder buy-in: Many new businesses underestimate the importance of internal stakeholder buy-in. Very early on in the adoption of car subscription, HelloCars ensured that there were incentives in place to reward salespeople for signing on new subscribers just as they would from a sale. This meant that the goals of its employees were aligned with the goals of the business and that there wouldn't be any anonymity toward this new business model.
- Appointing a subscription champion: One of the major problems organizations face when implementing change is accountability. HelloCars appointed a 'subscription champion' within the business who would ultimately become responsible for ensuring subscription targets were met, as well as being accountable for the day-to-day management of the subscription program.
- Implementing a robust nurturing process: HelloCars understood that only a small percentage of customers will transact on the first interaction. With this in mind, each and every customer that submitted an enquiry then received a phone call to support them through the subscription booking process. As most customers were unfamiliar with car subscription, this process offered them reassurance and was also an ideal opportunity to understand the market perception toward car subscription. In addition to phone calls, new leads were enrolled into a timely automated email nurturing campaign to ensure all leads were given the best opportunity to convert.
- Marketing to adjacent verticals: As car subscription had not yet gained traction in the Australian market, HelloCars targeted its marketing efforts toward adjacent verticals - namely long-term car rental and leasing. As car subscription is inherently more affordable and flexible than both of these alternatives, it meant customers would convert at a much higher rate - attracted by the convenience and cost.
For HelloCars, it's growth in car subscription was limited only by its level of inventory with consumers instantly seeing value in the service well beyond the initial expectations of the company. While other car subscription services existed in name alone, HelloCars was Australia's first full-service car subscription company where customers could book a vehicle online and have the technology in place to manage ongoing payments and billing with bank-like levels of efficiency and compliance - all delivered by Loopit.