When BMW announced its plans to charge car owners $18 a month to use the heated seats in their cars, drivers and the media reacted with anger and incredulity. Charging drivers – who have likely paid tens of thousands for their vehicles – to use a feature that is considered standard by many car owners highlighted an old-fashioned understanding of commerce in the automotive industry.
Cars have become smarter, better equipped, and easier to drive in recent years. Yet it seems the industry is still in the dark when it comes to offering post-purchase commerce opportunities.
The idea of using subscriptions and microtransactions itself isn't a bad one, but in the case of the BMW example, the focus is on the wrong types of products. Manufacturers should be thinking about how they can enhance the experience of owning their products, rather than leaving owners with a second-rate experience which leaves them stuck in first gear.
The key to achieving this is a smarter approach to commerce that is customer-led and not OEM-led. Much like a satellite TV service may sell you a regular subscription on-top of which you can add packages such as movies or one-off sports events, the automotive industry needs to expand what it offers to create new revenue streams.
Here are three areas where auto companies can thrive.
- Supercharged navigation: One option for automakers to improve the lives of their customers and raise revenues is through enhanced navigational services. This could include a package with smarter route planning to cut time off journeys or help save fuel. Automakers could even offer features based on learning drivers' regular trips and enabling smart notifications for when to leave, or even more advanced lane guidance features.
- Entertaining journeys: In-car-entertainment has long been a focus for manufacturers to raise revenue. Whether it's a premium sound system or bigger screen, customers are often tempted by technology that improves the in-car experience. But with today's focus on content, there's a distinct opportunity around dedicated offerings that are integrated into the car's in-car entertainment system. Giving users access to music, podcasts or even audiobooks through a streaming subscription managed by the manufacturer can add value for users and revenues for manufacturers. Making such systems independent of the car owner's mobile data plan and guaranteeing better connectivity -- for instance through the integration of mobile and satellite data plans -- can help to make such a service a success.
- Smart carpools: Many car-owners don't use their vehicles every day, therefore, manufacturers could create a subscription service that allows car owners to offer up their car as a local pool vehicle with an approved list of drivers. Essentially the system would act as an Airbnb for cars while manufacturers can take a cut of the profits for offering the service. Tightly integrating and managing such an offering to owners directly means manufacturers can ensure the security of vehicles, without owners having to hand-over physical keys -- thus reducing friction and making owners more likely to sign up for the service.
There is a world of potential for automakers, and all this can be done without alienating customers and making them pay for features they expect as standard. To succeed, automakers just need a little imagination and a better understanding of what makes their customers tick. In addition, making sure these services are easy to access will also help pave the road to success.
Making use of flexible, composable commerce platforms will ensure drivers can use these features without being frustrated by the process of enabling and paying for them.
If automakers can successfully implement a composable approach, they will quickly find there are ample opportunities to offer new services that positively impact their bottom lines, while improving customer satisfaction in the vehicles they buy.
