A lot of us might remember the early days of the mobile telephony boom in India. During this time, the industry saw a spate of value-added services (VAS) such as ringtones, special SMS services, caller-back tunes and more, many of which persist to this day. These services, ranging from functional to the entertaining, were a key component of the bustling, competitive market, a far cry from the days of undifferentiated landline players. What’s more, it also gave these players new revenue streams.
It’s worth looking at what other industries would benefit from VAS. We believe the vehicle resale market is ripe for some ideas that will benefit consumers and the various players in the ecosystem.
The last year has been a boom time for this industry. The demand for used cars has outstripped that of new cars (115% vs 80-85%), according to Shashank Srivastava, executive director, marketing & sales of India’s largest auto manufacturer, Maruti Suzuki. As demand grows, it’s likely that this erstwhile unorganized sector will start getting more structured – especially as OEMs enter the game themselves (Maruti Suzuki’s own True Value program being a case in point).
In a scenario like this, it becomes important for players to differentiate what could otherwise be considered a parity product. To answer this, it’s worth looking back at the beginning of the mobile telephony revolution, and the various VAS it heralded. What would the equivalent of this be for the auto resale industry?
For example, consider post-purchase service. It’s an obvious concern for anyone buying a used vehicle and can be obviated with assured service. A service such as digital pick-up and delivery, where a customer can not only be saved the hassle of ferrying a vehicle to the service centre but be able to select a time slot for a representative to come pick it up, doesn’t just help the customer in their time of need but also acts as a source of reassurance during purchase. Such a service, offered by 21 North, can be easily integrated into any OEM or resale brand’s operations. There are many such VAS waiting to be unlocked, and can possibly be monetized either one-time or on a subscription basis.
The benefits of VAS are many
Differentiation in a competitive market: As the market heats up and matures, customers will look for more than just the cheapest price. Having good VAS gives brands a competitive advantage.
Customer satisfaction: Arguably the most important reason is delighting those who purchase. A satisfied customer today could refer a friend tomorrow, and even upgrade themselves the day after. This will help bring down overall acquisition costs.
Helps improve margins: An add-on service, be it one-time or recurring, will be an added revenue stream while providing value to the customer.
And at an overall level, helps push the industry forward: Ideas that arise out of VAS will keep the market more organized and offers value to the ever-growing segment it caters. This augurs well for the resale market as a whole and will help get rid of any unfavourable associations it might have had in the past. As the industry increasingly becomes organized, this is an important factor to consider.
While it is up to individual OEMs and other players to come up with ideas for such VAS, the advantage is that a lot of these can be delivered digitally, and that is where players such as 21 North can help integrate and execute quickly and effectively.