How to combat holiday churn

The Christmas holiday is around the corner, and unfortunately, Santa not only brings presents but holiday churn too.

Our years of data show higher churn before and after holidays, including Christmas and summer vacations. We see customers wanting larger SUVs to accommodate longer travel and larger groups.

In the graph below, you can see the Christmas churn highlighted by the purple circles and the pre and post-summer churn in yellow and green circles. You'll also notice a large Covid-related increase in churn, which we assume was related to the world going into panic mode.

What's interesting is right after the Covid peak, you'll see the churn rate was very low at 10.4%. We assume this was because people avoided taking public transportation and sought the safety of their own secluded car subscription vehicles.

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So how can fleet managers combat churn?

Avoid using marketing messaging like, “Get your holiday car!” to prevent attracting short-term customers. Instead, consider messaging like, “Just sold your car? Get your new car on subscription today and cruise into the new year!”

In this graph, we define churn rate as the number of customer churns divided by the number of active customers at the start of the month. This means that the churn peaks do not reflect when existing customers swap to another vehicle, for example, swapping their smaller city car for a larger SUV before the Christmas holiday.

The flexibility to swap a car is one of the value propositions of car subscription and gives customers access to the full fleet depending on their lifestyle at the time. This type of churn, should not be considered negative, rather fleet managers should optimize the fleet for high-swapping periods.

For example, we've experienced that during the holidays, people tend to swap to larger SUVs. As a fleet manager, consider optimizing your fleet by sourcing larger SUVs to be delivered right before the holiday to meet customer demand.

Fleet managers may also want to consider not adding new vehicles to your service in August and September, as you’ll have many vehicles returning from summer holiday during those months; See the post-summer churn peaks in the graph's yellow circles. Instead, add new vehicles to the service in other months of the year.

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