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Rob Mengelis: Business Ops Project Manager Task

Last edited 2 minutes ago by Rob M

Exec Summary

Renewal rates are low (~20%), and many customers switch before receiving renewal offers. My analysis found that key drivers of churn include competitor incentives making new leases appear cheaper, unclear lease-end communication, weak financial incentives, and unexpected fees.

I reviewed available data, researched industry trends, and analysed customer behaviour across key segments—Salary Sacrifice, Personal Leasing, and Business Leasing. Salary Sacrifice emerged as the highest priority, accounting for ~60% of the Octopus business. The findings validated key hypotheses:

Customers perceive new lease deals as cheaper than renewals.

Lease-end options are unclear, leading to unnecessary churn.

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Action Plan⁠

: To solve this, I created an action plan that focuses on:

Automated Lease-End Reminders – Timely email/SMS reminders at 6, 3, and 1 month.

Clearer Communication – Updated FAQs and proactive follow-ups from Sales & Customer Support.

Defined Scope & Measurable Outcomes – Targeting a 30% renewal rate, 60% engagement, and 25% fewer support queries.

Problem Statement

Octopus EV faces a challenge as many customers reach the end of their leasing contracts, with a low renewal rate of around 20%. The goal is to create a seamless, scalable end-of-contract experience that improves retention while efficiently managing returned vehicles.

Breaking Down the Problem

To approach this effectively, I broke down the problem statement into two key areas:

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Discovery & Research

A) Low Renewal Rate

To determine where the biggest impact could be made, I first needed to understand the distribution of Octopus EV’s key business segments:

Salary Sacrifice

Personal Leasing

Business Leasing

Segment Analysis: Low Renewal Rate

Segment Analysis: Low Renewal Rate

Segment

Hypothesis

Estimated % of Fleet

Key Supporting Data & Logic

Salary Sacrifice

Dominant segment due to rapid employer adoption, employee demand, and tax efficiency, making it a sticky, long-term lease model.

60%

📈Rapid Growth at Octopus EV - Octopus EV's fleet doubled in size over the last 12 months, growing from 1,300 to 6,750 cars in FY23.

Source

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- Over 5,500 companies, including HSBC, Dyson, McLaren, and Innocent Drinks, have enrolled in Octopus EV's salary sacrifice scheme.

Source

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📈 Trends - Salary Sacrifice grew 68% YoY as of Q3 2023, making it the fastest-growing EV leasing model in the UK.

Source

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👥 Employee Demand - 55% of employees wouldn’t have opted for an EV without salary sacrifice, with 78% citing cost savings as the main factor in their decision.

Source

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Business Leasing

SME fleet electrification is growing but at a much slower pace than Salary Sacrifice. While SMEs are adopting EV leasing, many prefer Salary Sacrifice due to better cost savings and tax advantages.

10-20%

🏢 SME & Public Sector Fleet Leasing - Octopus EV offers business contract hire and fleet leasing solutions for companies managing fleets of 20+ vehicles.

Source

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- Octopus EV is a supplier on the UK Government’s Crown Commercial Service RM6268 framework, enabling EV leasing to the public sector.

Source

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📊 Trends - Business Contract Hire (BCH) grew only 7.1%, indicating steady but slower growth compared to Salary Sacrifice.

Source

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- Business leasing offers VAT recovery benefits (50% on lease, 100% on maintenance), but SMEs still favour Salary Sacrifice for higher overall cost savings.

Personal Leasing

Individuals have many alternative leasing options directly from manufacturers (Tesla, Polestar) and dealerships. However, Octopus EV differentiates itself through bundled energy products and value-added services.

10-20%

🚗 Product Offering - Personal Leasing via Octopus EV remains competitive due to bundled energy products and exclusive offers via Electroverse.

Source

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📉 Market Trends - Personal Contract Hire (PCH) declined by 7.1%, signaling a slower adoption rate.

Source

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Hypothesis for Low Renewals

Based on the data and insights gathered, I have identified 5x potential hypotheses for low renewal rates. While there are multiple opportunities and quick wins, one key driver stands out: "EV Lease Cost Perception vs. New Deals."

🚀 Strategic Opportunity: Pre-Approved Renewal Offers

To proactively tackle this challenge, a Pre-Approved Renewal Offer (Before 6 Months) initiative could be introduced. By offering competitive renewal pricing before customers start shopping elsewhere, Octopus EV can increase retention rates while reducing decision fatigue later.

Low Renewals: Hypothesis Analysis

Low Renewals: Hypothesis Analysis

Hypothesis

Likelihood

Supporting Data

Immediate opportunities

Other opportunities

EV Lease Cost Perception vs. New Deals Customers expect renewal pricing to be lower than a new lease, but incentives make new leases more attractive.

🔴🔴🔴🔴🔴 (Very High)

📌 Reuters: Residual values of EVs are dropping, making discounted new leases more attractive than renewals.

Source

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📌 Experian: New EV lease adoption increased to 46% in 2024, signaling a competitive leasing market.

Source

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🚀 Pre-Approved Renewal Offers (Before 6 Months)—provide competitive renewal pricing before customers explore new lease options.

Offer a Renewal Price-Match Guarantee—ensure renewals are not more expensive than an equivalent new lease.

Loyalty Renewal Discount—offer 5-10% off for early renewals.

No Clear Financial Incentive to Stay Unlike mobile phone contracts, customers don’t perceive renewals as a “win” because there are no upgrade perks.

🔴🔴🔴🔴🟠 (High)

📌 Octopus EV Perks: New customers receive benefits (e.g., £500 heat pump discount), but no exclusive renewal perks exist at least I can't find them.

Launch Renewal-Only Perks (e.g., Free Home Charging Miles, Insurance Discounts).

Job or Employer Changes Impact Eligibility If a customer switches jobs, they lose access to salary sacrifice, forcing them to return their car.

🔴🔴🔴🔴🟠 (High)

📌 Gov.UK: Salary sacrifice is employer-tied or the new employer must have this as an option but it can be difficult to apply.

Source

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📌 LinkedIn: UK job-switching rates increased in 2023, meaning more customers may lose salary sacrifice eligibility.

Source

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Introduce a “Keep Your Car” Program—allow customers to transition to a personal lease at a discounted rate if they switch jobs.

Unclear End-of-Lease Options Customers don’t fully understand their renewal, buyout, or return options, leading to decision fatigue and churn.

🔴🔴🔴🔴🟠 (High)

📌 Reddit EV Lease Forum: Customers often struggle to compare renewal vs. buyout costs.

Source

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🚀 Make Renewal/Buyout Options Visible in the Customer Support Portal—show options incl. buyout pricing 6 months before lease-end.

Introduce a Lease-End Cost Estimator Tool—so customers can calculate potential renewal vs. buyout costs before returning their vehicle.

Lease Terms Are Too Restrictive Fixed 3-year leases may feel too rigid, and some customers want flexibility to switch cars sooner.

🔴🔴🔴🟠🟠 (Moderate)

📌 AutoTrader UK: Consumers increasingly prefer 12-24 month lease terms over longer commitments.

Source

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Offer Flexible Mid-Term Lease Upgrades—allow customers to switch to a new EV after 18 months.

Introduce an “Early Lease Exit” Option—where customers can extend, swap, or exit early for a fee.

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B) Scalable End-of-Contract Experience

Beyond renewal rates, another critical challenge is enabling a scalable and seamless end-of-contract process.

Hypothesis

Prioritisation Approach

The biggest quick wins lie in: 🚀 Automating lease-end reminders via email/SMS – Providing clear return/buyout/renewal options before customers explore competitors. 🚀 Enhancing lease-end communication – Improving FAQs and self-service options to reduce confusion and support volume.

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End-of-Contract Hypothesis Analysis

End-of-Contract Hypothesis Analysis

Hypothesis

Likelihood

Supporting Data

Immediate Opportunities

Other Opportunities

Lack of Clear Customer Communication on Lease-End Process Customers don’t fully understand their lease-end options (return, buyout, renewal, or trade-in).

🔴🔴🔴🔴🔴 (Very High)

📌 Octopus EV FAQs: Customers must return vehicles for inspection, but buyout and renewal options are not clearly communicated.

Source

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📌 Trustpilot Analysis: 36.7% of negative reviews cited delayed responses and unclear lease-end options.

Source

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🚀 Automate lease-end reminders via email/SMS with clear renewal, buyout, and return options.

Create a Lease-End Portal so customers can check their options in real-time.

Lease-End Cost Estimator Tool to compare renewal vs. buyout pricing.

No Strong Incentives for Customers to Buy or Extend Lease Customers are not actively encouraged to buy their leased EV or extend their lease, leading them to explore competitor deals instead.

🔴🔴🔴🔴🟠 (High)

📌 Reuters: EV residual values are dropping, making new leases appear cheaper than renewals or buyouts.

Source

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📌 Fleet News: Customers prefer buyouts if pricing is competitive, but lack of transparency leads them to return vehicles.

Source

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Introduce a Buyout Option for customers who don’t want to renew.

Unexpected Lease-End Fees Cause Customer Friction Customers face unexpected charges for wear & tear or excess mileage, leading to negative brand perception and disputes.

🔴🔴🔴🔴🟠 (High)

📌 Trustpilot Review Analysis 16.7% of complaints referenced unexpected wear-and-tear charges at lease-end, with some customers feeling blindsided by fees.

Source

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📌 EV Lease Forums: Customers report dissatisfaction with unexpected lease-end fees from leasing companies.

Source

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📌 Octopus EV FAQs: Excess wear & tear fees are assessed post-return, meaning customers don’t know their costs in advance.

Source

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🚀 Enhance the FAQs and Help Centre to provide clearer guidance on lease-end fees and return conditions.

Lease-End Cost Estimator Tool to help customers understand potential charges.

Minor Damage Fee Waiver for renewing customers.

AI-Based Damage Estimation via customer-uploaded photos.

Operational Bottlenecks in Vehicle Inspection & Processing Returned vehicles take too long to be inspected, refurbished, and resold, reducing profitability and slowing fleet turnover.

🔴🔴🔴🟠🟠 (Moderate)

📌 Octopus EV FAQs: Customers must return vehicles for inspection, but timelines and details are unclear.

Source

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Redesign return & inspection workflow to shorten turnaround times.

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What is the Action Plan?

Project: “Lease-End Optimisation: Increasing Renewals & Improving Vehicle Return Process: “

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Problem Statement

❌ Low renewal rates (~20%) – customers switch before receiving renewal offers. ❌ Competitor incentives make new leases appear cheaper, driving churn. ❌ Poor lease-end communication – unclear process for return, renewal, or buyout. ❌ Weak financial incentives – no compelling reason to stay. ❌ Unexpected lease-end fees – causing customer frustration and disputes.

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Measures of Success

📊 Engagement Rate – 60% of customers interact with lease-end communications. 📊 Renewal Rate – Increase from 20% to 30% within 6 months. 📊 Reduction in Support Queries – 25% decrease in lease-end inquiries while maintaining CSAT levels.

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Scope

In-Scope items:

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Action Plan

Timeline overview

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Phase

Task/Activity

Details

Owner

Timeline

Outcome/Deliverable

Discovery

Data gathering & analysis

Interview key stakeholders (Sales, Customer Ops, Finance, Tech, Vehicle Ops); analyse CRM data and customer feedback; research competitor pricing; update project intake document.

Rob (Lead)

Weeks 1–2

Discovery report with insights and recommendations; updated project intake document.

Kick-off Meeting

Stakeholder alignment

Present discovery findings; outline project scope, objectives, and success metrics; define roles using the RAPID framework; finalise timelines and resource allocation.

Rob (Lead)

Week 3

Department heads’ buy-in and resource commitment for the pre-approved renewal initiative.

Renewal Offer Implementation

Offer details and messaging

Rob to collaborate with Finance to finalise competitive renewal pricing and incentives (e.g. price-match guarantee, renewal-only perks); develop clear, upfront messaging that addresses EV lease cost perception versus new deals.

Finance, Marketing, Business Ops

Weeks 4–6

Pre-approved renewal offer with transparent pricing and incentives.

Automated Lease-End Reminders

Workflow design & integration

Design automated reminders via email/SMS: • 6 months before expiry: Send personalised email with renewal offer details and trigger CRM alerts for Sales and Customer Support. • 3 months: Follow-up email/SMS with FAQs; trigger follow-up actions. • 1 month: Final reminder with urgency; provide non-responder list for targeted outreach.

Tech, Sales, Marketing, Customer Support

Weeks 4–6

Automated lease-end reminders with integrated CRM triggers and proactive follow-up from Sales and Customer Support.

FAQ Updates

Review & update content

Review existing FAQs on lease-end options (renew, extend, buyout, return); update to include clear details on the pre-approved renewal offer, pricing structure, and next steps; collaborate with Customer Success and Marketing.

Customer Support, Marketing, Vehicle Operations, Sales

Weeks 4–6

Updated FAQs on the Help Centre clearly explaining lease-end options and the new renewal offer.

Launch & Monitoring

Soft launch and iterative review

Roll out the process to a test group; monitor key metrics (engagement rate target: 60%, renewal rate target: 20%→30%, 25% reduction in support queries); hold regular review meetings to refine messaging or strategy and CRM triggers based on feedback.

Project Manager, Data Analytics, Sales, Customer Support

Weeks 7–8 and ongoing

Validated process with iterative improvements; performance data to guide further refinements.

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Customer Journey Map Overview

Customer Journey Map Overview

Timeline Stage

Customer Experience

Team Actions

KPIs

Additional Notes & Risks

6 Months Before Expiry

- Receives a personalised email with the pre-approved renewal offer, including detailed benefits and competitive pricing. - Clicks through to view updated FAQs.

- CRM triggers automated alerts for Sales and Customer Support. - Sales review customer profiles for proactive follow-up. - Customer Support prepares to address initial queries using updated FAQs.

- Email open rate - Click-through rate

Risk: Low email deliverability or engagement. Mitigation: Test email campaigns and utilise multi-channel notifications.

3 Months Before Expiry

- Receives a follow-up email/SMS reinforcing the renewal offer and clarifying lease-end options. - Accesses additional content highlighting early renewal incentives.

- Sales initiates direct outreach to responsive customers. - Customer Support monitors incoming queries and provides prompt answers. - CRM logs interactions for follow-up tracking.

- Response rate - FAQ engagement rate

Risk: Customer misinterpretation of the offer. Mitigation: Refine messaging or FAQs based on customer feedback.

1 Month Before Expiry

- Receives a final, urgent reminder with a strong call to action and clear contact details. - Understands all lease-end options and any fee implications.

- Sales targets non-responders with personalised outreach using CRM insights. - Customer Support deploys approved scripts to resolve last-minute queries and escalates issues if needed.

- Renewal conversion rate - Reduction in support queries

Risk: Last-minute confusion or unresolved queries. Mitigation: Ensure robust FAQ content and ensure training and scripts are available for support.

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Appendix: TrustPilot Reviews Analysis

Octopus EV has an impressive

4.8 Trustpilot rating⁠

with thousands of positive reviews. However, to ensure a scalable and seamless end-of-contract experience, I wanted to find areas of opportunity where small improvements could make a big impact.

Here’s what I found: