Having emerged in the sharing economy, rental has managed to carve out a space for itself within the complex system of daily transactions, and it has established itself as an alternative solution to the traditional economic relationships of purchase and consumption.
In recent years, digitalization has not only redesigned internal rental processes but, above all, it has transformed the touchpoints and the ways customers interact with brands. In other words, it has laid the foundations for rethinking Customer Experience, which is destined to increasingly become a fundamental asset in which to invest in order to promote growth in companies and the sector as a whole.
CX and Rental: a business model where the consumer is the protagonist
In a recent post, we talked about rental as the new frontier of the sharing economy. We can easily see that it represents a competitive challenge to long-standing and established organizations. Just look at the radical changes that are shaping the demand for transportation – with car sharing shaking up the taxi industry – or look at how housing dynamics in the rental and hospitality market have been redefined – in this case, with often controversial consequences that are now highly debated.
Michael A. Cusumano was one of the first to attempt to capture this trend that was gaining momentum: technology-driven startups that linked suppliers and users of resources through web platforms. In addition to the fundamental role that new technologies played, the model operated according to a very simple mechanism: a person rented tangible or intangible resources from someone else who was underutilizing them – and the company functioned as a necessary conduit: facilitator, interface, and point of contact.
“The sharing economy has ushered in a new age where underutilized assets become peer-to-peer services for hire.” (source: How Traditional Firms Must Compete in the Sharing Economy).
Here, it’s important to emphasize here that the companies that first had the intuition to translate rental procedures into a digital ecosystem also redesigned the experience that the consumer, by choosing that particular method of purchasing goods and services, would have.
In other words, CX and Rental – on the one hand, the totality of interactions experienced online and offline by the customer and, on the other, the business model with its processes and operators – have redesigned each other to adapt to the new configuration assumed by the markets, where the consumer is the protagonist.
CX and Rental: the advantages of servitization
The ways that rental can be expressed today – physical + digital, omnichannel, data-driven, personalized – can be seen as the replication, at different levels, of a social logic.
Social media is able to bring together people with common interests who want to share resources of various kinds (information, ideas, opinions) in the same virtual place. By harnessing the power of those same platform dynamics and channeling the so-called network effects – whereby the value of a product or service increases based on the number of other users – a rental brand has an excellent opportunity to improve its CX offering. And Customer Experience, in turn, can make a significant contribution to industry growth.
From product to service: The service logic at work
Companies in the sharing economy – and among them, rental companies – are participating in a broader trend, “servitization,” which has a lot to do with a crucial shift, from product to service.
What does servitization consist of? Instead of selling products outright, companies can expand their potential markets by renting access for the time-limited use of the same products that people used to buy. And that’s not all: the added value of the proposition is in the set of services associated with use that actually create a rich, satisfying, frictionless customer experience.
In other words: servitization refers to companies that convert their structure and organization to sell, along with the product, value-added services integrated into the product itself. In this sense, services are not simply in addition to the sale of a product, but become a central element of the offer itself (source: Impresa 4.0).
One last important observation. The transition from product to service takes place first of all on a communicative level: any additional functionality that is integrated into the rental offer must be communicated when it is not itself pure communication, educational, informative, entertainment, or built to simplify the execution of an action by the user.
CX for Rental as an innovative mode of communication
The experience that the brand proposes to the consumer, in which all the different articulations of the use of the product converge, is, also in the case of rentals, an experience of listening and of accurate, direct, and transparent messages.
The idea of customer experience as communication, which has developed over the years, is now divided into two distinct, yet intimately connected, meanings:
- one-to-one communication: also defined as “conversational communication,”which involves an exchange between company and user;
- consumer self-empowerment: where users use all the tools at their disposal to independently manage the good or service.
A fully bidirectional communication exceeds in the ability to take advantage of the kind of one-to-many style of communication that characterizes the broadcasting of traditional media. In addition, thanks to digitization and advanced data analysis, every single action aimed at creating engagement is tailored to the specific characteristics of each user, personalized in such a way as to maximize the relevance of the content for everyone who receives the message (this is where marketing and customer service departments are important).
Why large-scale personalization is essential
Even in the case of rental, personalization, and not marketing channels per se, is key for the customer journey to unfold in the best possible way. But we need to go one step further and embrace the idea of personalization at scale, taking into account the potentially astronomical number of customer interaction points provided by digital touchpoints. (Source: Marketing Dive).
And as touchpoints multiply, it’s critical to envision the customer experience as a single journey and update communications accordingly, crafting messages that not only incorporate the qualitative and qualitative information gathered during online interactions but interpret it to succeed in a number of important objectives that are valuable for improving CX, such as:
- Intercepting and anticipating needs, even those that have not yet emerged;
- Identifying recurring purchase patterns and consumption behaviors;
- supporting preferences;
- simplifying transactional processes (such as payments or updates of account or profile information);
- facilitating ways for customers to request information or for giving feedback or complaints;
- opening spaces for clarification, suggestions, discussions;
- managing negative feedback quickly.
CX and Rental: when personalization truly leverages data
To establish a personal and unique relationship with the customer, the customer experience in the rental industry can now take advantage of the most advanced digital technologies (for example, AI and data analytics technologies such as live chat) to:
- anticipate customer inquiries and offer more effective and satisfactory responses quickly,
- reduce wait and problem resolution times by resolving less complex issues through automated tools and allowing customer service to focus on higher value activities;
- optimize the management of business processes and infrastructure;
- increase the number of successfully completed opportunities;
- make a substantial contribution to lead profiling and qualification;
- reduce costs (call center service receives fewer and shorter calls).
The issue at stake, we repeat, is to increase customer satisfaction, whose needs are placed at the heart of the company’s objectives. A more attentive attitude towards customers, which makes it possible to identify the main critical points along the entire journey, and the rapid capacity for problem solving make greater customer satisfaction possible.
Consumer sentiment can be captured through the analysis of particular KPIs and if it is positive, it leads to a higher rate of loyalty (it may be useful to compare it with traditional support services) and ultimately to an increase in customer retention.
The shift from product to service comes as a precise response to a series of macro factors: (economic, social, and cultural), and with it, it brings an urgency to update the CX, enriching it with new possibilities that must be enabled by ad hoc developed solutions.
Solutions for an increasingly engaging Customer Experience
Brands are increasingly adopting a data-driven approach with the goal of offering a personalized customer experience. Faced with consumers who are very attentive to the quality and timeliness of immediate and detailed responses, rental companies can focus on the most advanced tools available today, which are based on artificial intelligence and machine learning:
- Virtual assistants
- Personalized videos
Chatbots can be used to quickly answer questions about low complexity issues. They are built to guide the consumer in solving a problem by providing immediate content. If the answer they provide is not satisfactory, they are able to autonomously transfer the request to a human operator who takes it over, with a clear understanding of the issue. Chatbots can be integrated within the company website or in social channels (e.g. Facebook Messenger). While it’s true that chatbots extend the perimeter of communication between consumer and brand, it is equally true that they have many limitations: they are not able to handle complex requests or more than one request at the same time.
Virtual assistants, AI solutions that are more advanced than chatbots, have the ability to learn information from the context of the conversation taking place and to interpret it. This means, for example, that the virtual assistant can understand requests even if they have typos, misprints, or inaccuracies. Furthermore, thanks to the sentiment analysis capabilities of the message in question, virtual assistants are able to formulate informed hypotheses about the user’s state of mind and respond in the most effective way.
Personalized and interactive videos offer a great advantage over the other solutions considered here: they are able to involve the user thanks to a narration through images that directly address them. They also offer the opportunity to get an immediate response from users through the use of call-to-actions at relevant moments in the video. And every interaction with the video can be tracked, giving the possibility to perform detailed performance analysis.
Thanks to CX, rental companies are building valuable relationships with their customers.
Let’s briefly recap some of the concepts we covered above. Rental companies benefit enormously from an approach that redefines the product in terms of service and shifts the focus to Customer Experience, for two reasons:
- companies can offer additional services to complement their traditional products. For example, in the case of car sharing, you may include maintenance as a service to be associated with the product, i.e., a vehicle fleet. The need to include additional services, including consulting, is aimed at improving performance and economic performance;
- a different dimension of the relationship between brand and consumer is privileged, namely that of experience, which does not end with a single, definitive use but extends over time and becomes, in the best of scenarios, recurrent.
In this sense, the rental economy becomes circular, fitting right in among the business models that promote a sustainable economy and achieves, on the company side, an important objective: it allows companies to remain profitable and competitive at a time when the financial aspects of design and production are increasingly challenged by competitive markets, geopolitical crises, and environmental emergencies. This is because the technology that develops products extends their lifecycle so that they need to be replaced less frequently.
But undeniable technological advances alone do not explain the success the rental sector enjoys today. It is necessary to recognize the indispensable role played by CX, which enables companies to build a relationship with consumers that can withstand the unexpected and gain strength and meaning as time goes by.