Reconsidering cars as a platform for services.
A little while back I wrote about the auto industry obsession with gadgetry, saying that:
“While innovation is good and I’m usually not one to look gift electronics in the mouth, even I start to wonder whether loading cars up with all these extraneous gadgets is helpful.”
My point at the time was that software services could move a lot of the complexity out of the car and create an opening for a disruptor like the Wii to come into the market.
I still think that’s true, but a conversation with Christian today highlighted another way to think about this.
While most of the industry’s attention is focused on the in car experience, time spent driving only accounts for around 6% of the total time spent owning a car. The remaining time is completely fallow in terms of the attention and focus paid by manufacturers yet is incredibly impactful in-terms of satisfaction and repurchase.
When I worked on in the luxury car market, we found that more than 50% of cars sold each year were to current owners and we found that improving our retention rate would yield dramatic sales increases.
Traditional communications are extremely poor vehicles for addressing this opportunity and direct mail has become sullied by mis-use. Services, however, are custom made for enhancing the ownership experience.
Scheduling services can enhance the maintenance and service experience, mapping services can enhance the trip planning experience, and financial services could aid in deciding when to buy a new car or the decision to buy or lease. But the real opportunity is to use services to create a new level of luxury in the way that Lexus created a new level of luxury by re-imagining the dealership experience.
Going to the dealer represents an even smaller slice of the total time spent buying and owning a car. If Lexus could have that much impact by focusing there, imagine how much impact, say an Audi could have by delivering services to enhance the ownership experience. Done properly it could be a great follow up to their Superbowl statement.