6 Questions for the Connected Car Industry

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We all know the statistics – Gartner predicts that there will be 250 million connected cars on the road by 2020.  That means one in every three cars on the road will be connected.  By then digital diagnostics, infotainment channels and enhanced navigation systems are expected to constitute a $270 billion industry, up from $47 billion today.

The connected car has arrived. We have about a year before the novelty of a new car arriving with Wi-Fi and integrated telematics wears off.  We have maybe 18 months before over-the-air updates, mileage-based insurance and semi-autonomous highway navigation become mainstream.

And like practically every industry around the world, the automotive sector is currently in the midst of a broad, systemic shift from transactional sales to recurring subscription services. Companies are finding that real shareholder value lies in actively growing and developing a devoted base of drivers, not simply moving  units.

So far most of the media attention has been placed on competing platforms and applications, but that’s missing the broader picture. Functionality and connectivity is the easy part.  The real question is whether the industry is ready to shift from transactions to services.

Is the connected car industry ready for ongoing customer relationships? Is it ready to compete against the likes of  Google and Apple? Does it have the tools to truly own the contemporary automotive experience, the way Spotify owns today’s music listening experience?

Here are six important questions I dare you to consider when thinking serious about pursuing a connected car strategy that places the driver squarely in the center of their business model.

"Are you selling to the vehicle or the driver?" Rich Becker
  • Most customers are 70% through their buying cycle by the time they’ve arrived at your dealership. Deliver a seamless introductory experience for your drivers across mobile, web, sales, and dealership services.
  • Typically, people are introduced to connected-car services when they purchase a new vehicle from a dealer, and receive their first touch after the free trial period ends. But asking for money is a bad way to start a relationship. Start the conversation earlier.
  • Finally, your customer is a person, not a blank slate. Someone who adds his or her own favorite infotainment services to a compelling new suite of telematic and diagnostic tools is an empowered and invested driver.

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"Are you treating your dealerships like check-out counters or genius bars?" Rich Becker
  • It’s time to reinvent the dealership. Service calls shouldn’t be a hassle. Drivers should be allowed to schedule appointments online, ensuring that parts and loaner vehicles are ready and waiting.
  • It’s time to reinvent the service agreement. Why shouldn’t the cost of known maintenance requirements like tires and tune-ups be woven into a simple monthly payment?
  • What do Apple customers do while they wait for their genius bar appointments? They browse other Apple products in clean, well-lit surroundings. Offer wi-fi, coffee, and a quiet place to browse relevant services and get things done.
"Are you being smart about your drivers’ wallets?" Rich Becker
  • Optimize your payment gateways, allowing you to collect cash quickly. Global gateways vary in fee structures, rates charged, complimentary services and the effort required to use them. There are hundreds of options out there, so choose wisely.
  • Automatically generate fast and accurate online invoices that include a rich set of driver data, usage, add-ons, prorations and more. Turn your invoices into compelling mileage and usage updates (much like Nest’s monthly energy updates) to encourage interaction and upsells.
  • Take advantage of reasonable, consumption-based pricing models. A premium cost to have your car unlocked makes much more sense than a monthly insurance charge.  Consider tying services to miles driven, not time spent.

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"Do you understand what kind of driver you’re talking to?" Rich Becker
  • Gain the right insight into your drivers, enabling everyone in your organization to make smarter decisions and offer relevant services to different driver types: city drivers, long-distance commuters, weekend explorers, etc.
  • Integrate driver data directly into your ecosystem – from CRM to ERP, keeping your dealerships, marketers, and re-sellers focused and connected on driver results.
  • Flag hazardous driving patterns to help your customers become safer on the road, avoiding hard brakes, erratic lane shifts and speeding tickets.
"When your driver shifts gears, will you be ready to shift as well?" Rich Becker
  • Drivers change: they move between cities, jobs, relationships, and cars. So build an infrastructure that allows you to deliver the same driver experience across multiple vehicles, locations and lifestyles.
  • Appify the driver experience. Create a compelling online interface where the driver can manage their account themselves—add or remove streaming services, change their billing methods,  and upgrade or downgrade to various service and maintenance plans.
  • Learn from Tesla. Take advantage of over-the-air software updates to keep drivers happily surprised with new features and functionality. Test constantly to discover the pricing and feature strategies that encourage lasting customer relationships.
"Are you ready to race against Silicon Valley?" Rich Becker
  • If you’re in the automotive space, you’re now competing against Google, Apple and Microsoft. Take aggressive steps to prepare yourself to scale on all fronts: computation, global billing, reporting, integration, and more.
  • Don’t give away your dashboard. Silicon Valley wants to own it the same way they own your drivers’ cell phone. Offer smart relevant consumer apps (Waze, Netflix, Sonos, Spotify, etc)  but protect your ecosystem.
  • Map out an 18-month global currency and payment gateway strategy and make sure your system is built on a secure, scalable technology infrastructure. There’s no more waving goodbye to your drivers as they cruise off the lot. You’re coming along for the ride.

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