How to increase the first-time-right ratio of a private lease contract
As the operations manager of a private leasing company, you’re always working towards two things: as many processed files as possible per day, and a high first-time-right ratio in the acceptance of private lease contracts. Essentially, you’re looking to establish both quantity and quality at the lowest possible cost. This can be quite a challenge, as the private leasing sector’s acceptance process is highly regulated, which means that every document must be carefully checked by the approval department. Fortunately, there are several ways to increase the acceptance rate and the first-time-right percentage. And, they don’t start with the customer or the lease consultant, but with your internal processes.
Obstacles in the acceptance process
An important aspect of the acceptance process in the private leasing sector is the many documents that customers must provide. You need information on income, their living situation, and any debts, in addition to the required personal data. These papers then must be sent, processed, and stored in a safe, GDPR-proof manner. The tricky part is that this data comes from all sorts of different systems. For example, customers must provide information about their income and expenses. In addition, their identity must be verified. These documents often contain passport photos and/or social security numbers, information that a leasing company is not allowed to have because of GDPR regulations. The result? Additional action is required to ensure that the sensitive information is protected, and that no unprotected information remains in your systems. Not only does this take time, it’s also highly subject to errors.
In addition, due to promotional campaigns, there are regularly peaks in the number of requests for a private lease contract. As a result, the approval department cannot keep up, precisely at a time when new customers are desperate for a contract. The longer the waiting time and the bigger the hassle, the higher the chance that the customer will change their mind and go to a competitor.
All the more reason to take a close look at the acceptance process of private lease contracts! In this blog, you can read more about how to improve acceptance across the board. In the tips below, we’re specifically zooming in on your processes.
Connect with your customer early on in the process
The (digital) signature is often the last step in the acceptance process of private lease contracts. This means that customers can easily drop out if the process takes longer than expected. A simple tip: facilitate this moment of connection earlier. By asking for a signature as early as possible in the acceptance process, you connect the customer to your company. However, don’t see this tip as the solution to all of your problems. If you ask for the signature at the beginning of the process but then end up in an endless exchange of documents, your customer will not be satisfied.
Focus on data reliability
The first-time-right percentage of private lease applications increases if the reliability of the data provided is high. Therefore, we recommend making reliability a focal point of your operations. A good way of doing this is by working with source data. This is data that you’ve received directly from official government sources, such as FranceConnect, Info Retraite, and impots.gouv.fr. If you’re also able to receive all the data at the same time, you can check and approve all the information at once.
An additional advantage of source data is that you can automate (a large part of) the acceptance process. After all, you already know that the data is reliable.
Go for minimal data
In the acceptance process, much more data is requested than is necessary to draw up a private lease contract. Take a close look at the acceptance process and redefine your framework. Do you really need all the information that you’re currently requesting from your customers? If the answer is no, then you can leave some parts out. This also improves your security: what you don’t have, you can’t lose or accidentally leak. A good example is a copy of the customer’s identity card. This contains a passport photo and social security number, which GDPR regulations prohibit companies from keeping. Leave it out, it saves a lot of trouble.
Offer advice as early as possible
“Your debt capacity is just a bit too low for this car, but this other car looks great!” This is advice that customers want to hear at the start of their application, not when the private lease contract is almost complete. So, make sure that you have as much correct data as possible as soon as you can. In this way, you can make customers an appropriate offer that aligns with their financial situation.
First Time Right cannot happen without digitalisation
A high first-time-right percentage on private lease contracts can only be achieved if you digitise the process from start to finish. Ideally, you should allow customers to send in source data directly from the source systems and only ask for the necessary data fields. This may sound challenging, as you’ll receive less information than you’re used to; however, you’ll quickly notice that this new way of working speeds up the acceptance process, reduces the risk of errors, and improves customer service.
5 tips for smooth financial acceptance in the private leasing sector
“I have to call that customer back again because their data isn’t correct. But what if they drop out entirely?” This is a dilemma faced by many advisors in the private leasing sector. They are responsible for a good customer experience, but they also have to request the information necessary for financial acceptance in the context of a private lease contract. Are you a product manager, product owner, or innovation manager at a private leasing company? Then it’s up to you to give lease advisors better tools. Read on for five useful tips!
(Not) everything is fantastic
When lease consultants make a follow-up call after a new customer’s application (the so-called aftercare call), they only want to hear one thing: “Everything’s fantastic!” This indicates that the customer is happy with the deal, and that the onboarding process went smoothly. Still, it doesn’t usually happen that easily. Due to the complex financial acceptance process in the private leasing sector, customers have to jump through quite a few hoops before the contract is finalised. In addition, because they provide their data and you process it manually, the chance of errors is high. Things can go wrong with something as simple as missing initials on the lease contract. The result is that the contract is not accepted and must be redrafted and sent to the client again for signing. For the lease consultant working with that customer, this means more hassle, an unwelcome conversation and, often enough, a frustrated customer. Or even worse: no customer at all.
The main question here is: how can your organisation simplify the financial acceptance of private lease contracts so that the customer experience is not compromised? The answer isn’t to be found in the work of the lease consultant; they simply do what they’re told. The solution must come from the underlying structure. The head office is asking advisors to request all sorts of information that they really don’t need in order to close a deal. So somewhere in the process, something’s going wrong.
So much for the bad news. The good news is that you can improve this process. As an innovation manager or product manager, you can use the following five tips to simplify the financial acceptance process for private lease contracts, so that advisors can improve their service to customers.
Tip 1. Engage with internal stakeholders
Many documents are involved in the onboarding of a new private lease customer. In addition to the usual information, such as name and contact details, as a leasing company you want to know whether the new customer is creditworthy. That means the customer must provide information about things like income and debts. However, the question is whether all the information that you’re currently requesting is really necessary. So, take the time to talk to internal stakeholders that deal with customer data. Which steps are you taking now, which could be omitted? And, do you really need all the documents? There’s a good chance that some of the documents requested can be omitted.
Tip 2. Define the acceptance framework together
While you are discussing things with your colleagues, try to get a better understanding of each other’s work and responsibilities. Everyone has their own list of required customer information, but perhaps there’s some overlap, or you can help each other. An example: a self-employed person needs proof of income. An income statement for one year is usually sufficient for the process, but for an easier assessment, the approval department can ask the leasing consultant for an overview of the last three years. During onboarding, the lease consultant therefore asks the customer to provide their income data for the past three years. If all internal stakeholders sit down together and find out how much frustration providing the official documents causes the customer, they can all determine whether a declaration for one year might be sufficient as well. In short: ensure that the parties involved come out of their silos and make agreements together about the acceptance framework.
Tip 3. Prepare your customer
There’s nothing more frustrating than not being able to meet high expectations. Advisors in the private leasing sector know all about this. Sometimes their customers are already halfway through the onboarding process when they find out that the lease amount doesn’t fit into their monthly budget. Or that their application cannot be processed yet, as an income statement from a co-contractor is still required. Make sure that lease advisors properly prepare their customers for the financial acceptance process. Ensure that they explain which documents are required and which requirements they must fulfil in order to complete the deal. The sooner advisers request customer data, the better. In this way, they quickly get to know their customer and it becomes easier to make a suitable offer.
Tip 4. Focus on continuous optimisation
The cliché “standing still is like going backwards” certainly applies to the customer experience of private lease customers. After all, they expect more every year. Many other money-related matters, such as opening a bank account and getting a telephone contract, already happen without any barriers, so why is applying for a private lease contract still so difficult? Internal (or external) specialists can help you to improve customer onboarding. Be aware that this improvement process is never finished. Every year, something happens that influences the ideal picture for the perfect onboarding or the frameworks for financial acceptance: whether it is the implementation of GDPR regulations or the rise of chatbots.
Tip 5. Digitise the process
Now that we’re talking about progress: the more you can digitise, the better. When more processes are digital, customers no longer need to print and scan documents (both major frustrations!). It’s even better when you move from document-driven acceptance to data-driven acceptance. This requires a platform that regulates this process in a secure and GDPR-proof manner. Would you like to know more about implementing this type of customer onboarding in the private leasing sector? Feel free to get in touch with us!