Teppo Kuisma // April 01 2019

Car Companies Are Missing Out on Data Monetization. But Why?

When you buy a new car today, you can expect a lot of calls. The repair service calls you about the future maintenance schedule. SiriusXM gets in touch about radio and entertainment options. Uconnect (yes, I drive a Chrysler) wants to hook you up with digital services. The customer experience is completely fragmented and as a customer, you have to sign for each service separately.

Android Auto and Apple Carplay might offer a more seamless experience, but most car manufacturers have traditionally wanted to keep Apple and Google away from their dashboards and cockpit experience in the hopes of being able to establish their own, alternative app stores.

The only problem is they haven’t really been able to do this.

They’re missing out on a huge opportunity.

As a consumer, I’d love to have all the necessary services pre-installed in my new vehicle. If, after 5,000 miles of driving, I got a message on my dashboard from a repair service that suggested they come and pick up my car for maintenance on a day that suits me best, I’d be more than ready to pay a premium for it.

The car manufacturer might take their cut from the service charge, but at least I wouldn’t have to spend my valuable time scheduling the maintenance and taking my car to the service.

Companies to benchmark here are the obvious Apple and Google that currently take 15-30% cut from all app purchases. Car manufacturers have me belted in their store, but they are not able to sell me anything new. If they were able to take their cut of maintenance costs, gas purchases or entertainment services bought through the dashboard of their vehicles, they’d get a massive new revenue stream.

So why are car manufacturers not tapping into this huge monetization opportunity?

Because they haven’t figured out how it’s done.

In many ways, it’s understandable. Building a new ecosystem is hugely complicated. If your business model has been based on selling vehicles for the last eighty years, it’s not easy to switch to an asymmetrical system where you have to share the marketplace with other companies from completely different industries and fields. The sales model is also different. Instead of selling a product, you’re now marketing updates, services, and add-on purchases.

The thing is, car manufacturers would not have to build their ecosystems from scratch. There are plenty of amazing, perfectly functional ecosystems out there that they could easily benchmark. And I’m not only talking about Apple or Google only. Just look at how Amazon was able to grow from an online bookstore to a tech giant that masters not only e-commerce but also cloud computing and AI. Or how travel technology companies like Expedia or Booking.com are selling entire end-to-end travel experiences.

At Digitalist, we’ve been working together with car OEM’s like Honda on the Digitalist Experience Store, a proprietary white label App Store content platform. It’s designed to help companies deliver and monetize digital content and inspire customer loyalty. It’s a powerful ecosystem that fully supports brand customization and provides an additional revenue stream through app purchases, advertising, and sponsorship takeovers.

If you’d like to know more, please take a look at the Digitalist Experience Store product page, or drop me a note in US at teppo.kuisma@digitalistgroup.com or my colleague Tony Grubb in Europe tony.grubb@digitalistgroup.com

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