Typical operators of new mobility services generate the lion’s share of their sales from members’ usage of the vehicles and there are many ways to sell this usage, whether by distance, time, or a hybrid of the two.
December 5, 2017 These days, sophisticated billing systems can power tedious computations in a way that greatly reduces the overhead for this type of operation. However, revenue-generation opportunities don’t end there, as a way for monetizing mobility services’ large user base yields a few other interesting possibilities. Options include user base activation to rally behind a corporate cause, selling data to a broad range of organizations, and brand partnerships that can benefit both the operator and the third party partner. Today, we will be digging deeper into brand partnership opportunities.
Why Brand Partnerships Make Sense
One of the many reasons investments are pouring into new mobility today is the enormous number of potential users. If a company launches a high-quality service addressing enough potential use cases, such as free-floating carsharing, it can accumulate an astounding amount of users in a matter of months. As a good example, car2go now has more than 2,500,000 users in 26 locations, and it has considerable room for growth.
This large user base opens up great marketing opportunities. When a service has accumulated 100,000 users in a given city, it also means that the service can market to these 100,000 clients. Brands are willing to pay for such intimate exposure to a member base and the marginal cost of doing so for the operator is very low. Therefore, if executed tastefully, this type of initiative can constitute an interesting accessory revenue source.
Granted, the vast majority of communications by an operator should be geared towards increasing the utilization of its assets on the road, but those calls to action can sometimes take the form of a carefully crafted branded message from a partner. Through this channel, said partner gets access to a large number of targeted users, even going as far as subsets of an operator’s user base that meets certain characteristics.
It’s All About Execution
These partnerships can take various forms, including the following:
- Promotional items strategically placed in cars;
- Targeted email blasts or in-app push notifications;
- Temporary or permanent in-app or in-car branding;
- Temporary advertising on vehicles
- Parking space advertising (assuming a roundtrip or station-based one-way scenario)
Obviously, each type of campaign implies different logistical and brand challenges — let’s dive deeper into promotional items, specifically.
Campaigns offering giveaways left in cars supported by email marketing might present both the most interesting revenue-generating opportunity, but also the most challenging. For example, it may be costly to send out dedicated fleet staff to drop promotional items on short notice, so it’s best to have them dropped as part of their regular vehicle maintenance or fuel/charging visits. Otherwise, a good time to launch these promotions is during large vehicle in-fleeting, when many vehicles are in the same location.
Choosing a Partner Product
If working with promotional items, it is best to work with “high value” giveaways to ensure that users take the product with them and don’t leave remnants in the vehicle for the next user. While everyone loves potato chips, they’ll most likely leave traces behind in the form of crumbs. In the same way, chocolate might not be the best thing to leave in a car on a hot summer day. Like most shared mobility services, a wide-ranging demographic user base means giveaways must appeal to all demographics — highly segmented giveaways risk marginalizing part of your user base, and will simply be ineffective. Additionally, an operator should integrate a notecard or some form of their own branding onto the item, to ensure the giveaway is not perceived as a lost item.
Product giveaways can also be a great way to affect member behavior and boost an operator’s bottom line. For example, dropping products in cars located in areas of lower utilization every day for a full month can create a habit for users who will look for them and take the cars to more popular areas. If ten of those inactive users targeted become active and an active user has a lifetime value of $5,000, then the operator just secured $50,000. This will reduce fleet balancing costs, generate revenues from the partner brand, and boost user satisfaction. On another note, should an operator have multiple vehicle models in one fleet, they can encourage trips in more profitable models with targeted drops.
Finally, it should be noted that CPM (the cost an operator charges a partner brand per thousand impressions) does vary per market, so it’s a good idea to validate local practices before engaging with potential partners. In the end, it is important to measure the potential payout for the operator against the brand risk that could be associated with such campaigns.
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