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    Mapping how the current operational lease services are valued by the customers and translating it into a roadmap towards a more value-based segmentation and pricing

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    Author
    Gavtadze, Ana
    Kiekens, Thomas
    Supervisor
    Vanderheyden, Karlien
    Publication Year
    2019
    Publication Number of pages
    83
    
    Metadata
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    Abstract
    In a world where customers become more demanding, a company should make this shift together with its customers. A company might have to reinvent its product in order to remain competitive. So does KBC Autolease, changing fiscal rules, mobility trends and increased competition has put its classic product and positioning under pressure. Therefore, the purpose of this report is to map how the current operational lease services of KBC Autolease are valued by the customers and how the company can go to a more value-based approach as a reaction to the changing environment. KBC Autolease is a Belgian car leasing company and is part of the KBC Group. The company focusses on the B2B market with a Full-service leasing product. Currently, KBC Autolease has around 4,500 clients and a fleet of more than 50,000 full-service passenger & light commercial vehicle contracts and 10,000 bicycles spread over Belgium and Luxembourg. Recently, they also engaged in the multi-mobility story through a partnership with Olympus Mobility. KBC Autolease tries to distinguish itself from the competitors by focusing on customer intimacy and by offering a service-based solution instead of just a product. With a market share of around 12%, the company finds itself as a bank affiliate between the top players on the Belgian car leasing market. However, with changing tax systems ahead and new innovative companies entering the playing field, this industry finds itself close to a tipping point. Moreover, market research indicates that, in the future, cars will be perceived as a service rather than as a product. In areas with a good developed mobility system, cars could even become part of what is called Mobility-as-a-Service. The transition will be a consequence of technological innovation, increased digitalization and reduced vehicle ownership. This will result in mobility platforms that bundle all types of transport in one place. The customers of KBC Autolease enjoy great flexibility. A Full-Service lease contract can contain up until six different services, most of these services can still be adjusted to meet the customers their needs. Such a great offering resulted in a high general customer satisfaction score in the FleetEye survey, especially in the segment of customers with a fleet that contains more than 300 vehicles. An important factor that influences customers to choose for a product or not, is price. Today, KBC Autolease uses a Cost+ approach to price its product, but they are thinking to move to a value-based pricing approach. To move from a Cost+ approach to value-based pricing. The market should be explored to gather insight in customers experience. That will identify the value delivering drivers. Next, the relative perceived value by the customer of this driver should be measured. In a later stage, this relative perceived value has to be translated in a monetary value. This monetary value is called the willingness-to-pay or what people want to pay for a given product or service. Profound analysis gives the best results. Therefore, both quantitative and qualitative analysis were used in the process. Data on the current long-term Belgian leasing portfolio was provided by KBC Autolease. This data was analyzed and resulted in descriptive statistics on the current portfolio and an attempt to map the relationship between the margin of a contract and the effort put into it. The analysis of the portfolio helped in identifying the value delivering drivers. The qualitative data was gathered through in-depth interviews conducted with multiple people working at the Sales department of KBC Autolease. The interviews were held to get a better understanding of the relative perceived value of the offered services. Next, content analysis was done on the collected data in order to map and analyze all answers. The current Belgian long-term leasing portfolio of KBC Autolease consists for 95% out of passenger vehicles. The most frequent brands in the portfolio are BMW, Audi and Mercedes. Over the whole portfolio, winter tyres and road side assistance turned out be the services that are included the most in contracts out of all services that can be taken out. The statistics also indicated that an average passenger car leasing contract costs around €520/month, those contracts stretch on average over 51 months and include an average mileage of about 119,00km. The vehicle included in such a contract costs on average 30,200, options included. In the process of analyzing the data, it was also discovered that KBC Autolease was charging a negative amount to some customers on the tyre component of their contract without being aware of it. The attempt of mapping the relation between the margin on a contract and a success factor failed due to the fact that there does not exist an appropriate effort measure yet in the company. Through the in-depth interviews, information was gathered on the different services offered. The results indicated that customers value the repair & maintenance, insurance and tyres the most. Based on the input, several adjustments can be made to the existing services to increase the perceived value. The information was even so useful that several new services can be added to the current services. All gathered knowledge should serve as a first step towards value-based pricing and segmentation. The next step is to continue the measurement of the perceived value with real clients. The first step towards value-based pricing has been successfully covered by the paper. The findings from this research are definitely useful to continue the transformation to value-based pricing. There is enough evidence that suggests that a different customer segmentation and special, tailor-made products are definitely feasible. Even if KBC Autolease would decide to not proceed with the transformation, the results uncovered several possible improvements to their current services. These changes will in the long run boost the revenue as well.
    Knowledge Domain/Industry
    Accounting & Finance
    URI
    http://hdl.handle.net/20.500.12127/6778
    Collections
    In-Company Projects (ICPs)

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