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business models, strategies and technologies

Subscription power – Porsche Passports and beyond

A Porsche Passport lets you subscribe to the Porsche of your choice. But subscription software changes the whole playing field for ownership.

There’s a lot of talk about new ownership models for cars, and companies seem to be trying out all kinds of flavours, twists and mixes. “Try it and see” may be OK for the big movers, but it’s confusing for us on the receiving end.

Get a Porsche Passport

In early 2018, Porsche Cars North America and an ambitious Porsche dealership in Atlanta, Georgia, launched a pilot programme – Porsche Passport – that provides an alternative to owning/leasing, featuring the opportunity to subscribe to the Porsche lineup instead of shelling out the big bucks for a vulnerable asset. For USD 2,000 a month, subscribers can choose between a 718 Boxster, Cayman S, Macan S or Cayenne, swapping models on demand to suit mood, weather or profiling. With the big caveat of all this only applying to the Atlanta Metro area, of course.

Car or subscription?

But what’s the real story here? Porsche Passport transforms a traditional bricks-and-mortar car dealership into a digitally based personal concierge service, and completely restructures the driver-car relationship – from monogamous restriction to polyamorous self-indulgence. It’s so easy to salivate over the idea of scoring a luxury motor with only limited outlay and no ownership worries, and to laud experience over ownership in true millennial style.

But the whole Porsche Passport idea is driven by a little subscription app from Clutch Technologies – conveniently also headquartered in Atlanta, Georgia. And it’s this software platform that makes the whole Porsche Passport thing possible. Clutch is the enabler – for Porsche and just about anyone else automotive, it seems.

Clutch-driven subscription power

Clutch (luvly name!) sells itself as the leading software platform for vehicle subscriptions, declaring the subscription model to be the future of the automotive idyll. They also claim their software has validated that subscription lets consumers do more in life – quite some assertions!

As is so often the case with digitally based business models, the platform provider is the real winner, the sine qua non for whatever services the platform facilitates. Clutch is the white label provider that helps other companies to commercial success – “we’ll help you get there”, as they say.

Rethinking subscription capabilities

And as with so many disruptive – even just wobble-inducing – business models, one of the key problems lies in the words used, and their conventional connotations. A “subscription” has traditionally been a static form of financial relationship – perhaps involving some kind of discount because the service supplier knows he’s “got you” to provide a predictable revenue stream until you stop the subscription or it runs out. A traditional understanding of “subscription” just makes sure the payments keep rolling out of one bank account and into another.

Once subscription goes digital, however – in the Clutch setup, for example – the relationship is no longer static and therefore suddenly increases substantially in value and usefulness. Clutch seems to be good at making clear how a subscription-based model of their kind:

  1. Learns customers’ habits and preferences, making suggestions and improving the service experience
  2. Builds understanding about customers’ behaviour/preferences, with relationships based on data
  3. Engages customers regularly, building up a following/community/relationship
  4. Enables a company to keep its customers, and take them along as the industry evolves

In itself, there may be nothing new in this, but the Clutch focus on clear explanation provides a good lesson about the power and potential of the subscription-based business model.