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Can telematics actually deliver on its customer experience promise?

The telematics vision is broad: to enable the vehicle to become the experiential hub through which customers fulfil a wide range of lifestyle choices. If OEMs want to fulfill this vision then they need to future-proof their offer when it comes to connected technologies they need. Otherwise, the car as the ultimate expression of a unified, well-designed customer experience may remain just a dream.

 

Why Now?

Connected consumers continue to raise their expectations for mobile technologies in making their lives easier and more fulfilling. They’ve decided how and when they want to interact – and it shouldn’t require effort on their part. Technology must be ubiquitous and enabling, working in real-time for them.

Outside the car, customer-facing technology is progressing at a rapid pace, offering nimble companies innumerable opportunities to engage and fulfill customers’ needs. Amidst this progress, the car has long stood as a potent symbol of expressing one’s individuality, occupying a uniquely central position in our lives.

 

The ‘not’-car

But OEMs risk losing touch – and their competitive edge – to those who acknowledge and embrace the fact that the car by itself is no longer the center of their customers’ universe. Rather it’s what the car can do for them – by way of very ‘non-car’ things – that will win the day. Consumers and their mobile needs are now front and center, and OEMs must design their ecosystem accordingly. The car is just one (important) part of this ecosystem. OEMs need to focus on how to reinvent the car so it can step up to its new role.

This may be heresy to the engineers among us or to those schooled in marketing cars through traditional attributes of bodyline, power and performance, and visual appeal. But this is the fast emerging reality of the new telematics, where connectivity is sexier than horsepower. Unfortunately, the connectivity customers are demanding is not the same as what OEMs have delivered to-date.

 

Go ‘open’ to get ahead!

As it stands, cars just aren’t appealing when it comes to telematics; they are instead dull, outdated, and frustrating. This is primarily because vehicle product development cycles and timelines have historically shaped the OEM business model and approach to technology solutions. As a result, telematics development has failed to keep pace with the wider market.

Just like the computing industry in the 90s saw its reliance on proprietary hardware and machine-specific operating systems fall to the wayside, so too is the auto industry learning that ‘closed’ systems no longer cut it with consumers.

In short, OEMs’ proprietary solutions and strategic vendor relationships have given rise to a plethora of feature functionality which is frequently baked into the car platform years before it hits the market. As a result, it should come as no surprise that OEMs’ attempts to stay abreast of (let alone lead) the market have been stymied.

Not only are telematics components out of date by the time of launch, but they are also locked in at an inflated cost-base which fails to take advantage of subsequent cost cuts. Consequently, price at the time of launch is too high in real terms as well as being seriously out of step with consumers’ relative perceptions of price/value. Worse still, consumers are increasingly looking to their experiences outside of the car to set their expectations of technology value.

An example of the OEM’s commercial dilemma is the current debate over what customers get (and are prepared to pay for) in terms of in-car head unit functionality and subscriber fees. In many cases, consumers expect this functionality to be free and competitive with what is available on their handsets. But the telematics software features and functions, hardware, and business model are established years before vehicles reach consumers. By the time it gets to customers, the telematics solution is no longer relevant and comes with the need to download updates just to get the kinds of services consumers already have via their mobile apps.

 

Get with the program

OEMs need to recognize that they have become hamstrung by reliance on over-engineered, on-board systems that have been outmoded by cheaper, more flexible cloud-based technologies.

At the same time, OEMs need to continue to focus all their efforts on their core competency: making the car platform itself the very best it can be. Instead of trying to master the telematics technologies themselves, they should simply ensure that the car comprises the necessary ‘connective tissue’ into which broadly available hardware components can be readily selected from the market and integrated at the time launch.

If OEMs open their cars up to the software vendors who are leading innovation and capturing market share in the out-of-car world, their in-car experience will surely benefit. This approach would also future-proof telematics by providing a modular vehicle platform that can be upgraded without the need to guess what technologies will be popular in three years. In this way the car becomes capable of staying automatically in-step with those technologies as they develop and make their way into customers’ everyday lives.

It won’t be easy. Under this scenario, connecting all these moving and constantly changing parts across a broad spectrum of vendors and service providers promises to be a massive challenge. But the prize of enhanced customer experiences that drive loyalty is worth pursuing and is doable. However, OEMs must enlist partners who share this vision and are qualified, capable, and ready to step-up to the challenge of fulfilling the telematics customer experience promise.

Michael Dorazio