E-bikes are changing transport in cities all over the world and present a huge opportunity for bicycle retailers. With the increasing share of e-bike sales, however, the profile of their clients has changed as well. The e-bike prospect has different expectations than someone who is in the market for a race bike or someone who regularly tours the countryside.

Davy Louwers is CEO of Online Bike Group, which is located in one of the most mature bike markets in the world: The Netherlands. In the spring of 2019, he announced that their prime brand, Fietsenwinkel.nl, would change its strategy to adapt to the new market reality and go all-in on e-bikes. “It’s not enough to be the cheapest anymore; client centricity is our main priority. 44% of our e-bike sales are commuters, who are way more demanding. They want a good and fast bike with a great service offering. They choose an e-bike over a company car, so they expect replacement bikes, roadside assistance and flexible financing.”

A similar response can be heard from Internetstores CEO Hans Dohrmann: “The customer who is looking for a high-quality e-bike to commute, or the family who wants to buy an expensive cargo bike, must be offered the service level that they expect according to the price.”

Across the five largest European countries, the number of bikes  that get stolen can be estimated 2.5 million and 3 million per year.

In the quest for value-added services, insurance is definitely one of the lowest-hanging fruits available to retailers. Across the five largest European countries, the number of bikes   
that get stolen can be estimated 2.5 million and 3 million per year. E-bikes still require a substantial investment and tend to be used on a daily basis, which makes theft a real nightmare scenario that buyers want to hedge against.


Insurance as a dealmakerA Roland Berger survey in The Netherlands showed that new bike sales account for 70% of the gross margin of bike retailers, while workshop fees account for 25%. There is very little diversification in the revenue source of bike shops. On top of that, the survey found that an average shop makes a profit of about 9% on capital and that 40% of the shops surveyed were not profitable enough to pay shop owners a salary of €40,000 per year.

This means bike retailers should be extremely creative about developing new sources of revenue that don’t eat into their margin. Guarantees and free maintenance are a popular sales incentive to sweeten the deal with a consumer, but they have a real impact on cost structure and margin. Offering one year of free assistance, on the other hand, doesn’t have this side effect, and it’s a valuable offer to someone who is going to be biking to work every day.

LoyaltyThe survey also identified another pain point: client retention. Bike retailers don’t invest in loyalty, which has a huge impact on customer lifetime value. To grow the bottom line of a business, you have three options:

  1. Increase the number of prospects
  2. Increase the number of transactions
  3. Increase the value of each transaction
Increasing the value of each transaction is by far the easiest option. Not only do bike retailers earn a commission on every insurance contract that is sold, but Qover’s bike theft insurance, for example, gives policyholders a voucher for a new bike in case of theft, which would double the revenue earned by the bike shop.

Don’t be evil

Unfortunately, shop owners are no insurance experts. The result is that some bike insurances offered to clients exclude theft at night, the policy includes an extreme  depreciation of the bike for up to 15% of its value, and some premiums only cover damages but include a high excess. It goes without saying that this is not the way you build a sustainable relationship with a client. The goal of offering insurance is to provide peace of mind and remove any potential friction during the sale of a new bike. An important aspect in that regard is a seamless experience. At Qover, we are able to integrate with third-party CRM systems, provide mobile onboarding flows, or integrate seamlessly with a simple tick-the-box process during checkout. All of this results in an extremely high conversion rate of insurances sold.Screenshot 2020-03-16 at 15.20.41

ConclusionIf executed well, insurance can be one of the most valuable tools for any bike retailer. On top of generating additional revenue for the retailer, it increases loyalty, customer lifetime value and adds true value to the client’s experience. To maintain low costs and limit time to market, it’s important to have a plug-and-play solution that can be integrated with any shop. An insurance provider that is able to provide you with a pan-European roll-out will also allow you to benefit from scale and thus decrease the cost of acquisition. A good example is Cowboy’s insurance program, which is 100% integrated into the purchase flow of the bike and the app. No depreciation of the bike and no excess for damages above a certain amount.If your organisation chooses to focus on client experience and wants to provide real value, let’s connect. You’ll see why we have a 94% customer satisfaction rate.