How dealerships and OEMs can
leverage the power of vehicle connectivity

Tap into service alerts to build both customer trust and service revenue

The availability of over-the-air services in connected vehicles runs the gamut, from remote location and control, to entertainment and navigation; from usage-based insurance, to mobile payment and concierge support. Many of these services are of high value to vehicle owners (for example, being able to remotely lock and unlock doors or finding the nearest gas station). However, some services – such as remote diagnostics and maintenance reminders/scheduling – provide significant benefits to OEMs and dealers and, one might argue, are of even greater value to them.

Leverage service alerts to drive profits

Many connected-vehicle services are offered through free trial periods that start immediately after the vehicle purchase. At the end of the trial period, many OEMs implement an all-or-nothing strategy, focusing on short-term gains but missing out on the larger opportunity to strengthen the relationship with their customers and generate higher revenue and profits in the long term.

What OEMs and retailers can do RIGHT NOW

Both OEMs and dealers can significantly benefit by proactively planning and executing strategies and tactics that meaningfully engage auto buyers throughout the ownership cycle.

For OEMs, that means executing an articulated strategy that provide owners with the opportunity to experience the benefits of the entire gamut of connected vehicle services during the free trial period, but then have a more nuanced approach when transitioning customers to a pay-for-service model. They can do this by segmenting their offering between services that primarily benefit customers – charging a subscription after the free trial period – and those that provide more benefit to the OEM and dealers (e.g., service alerts) by providing them at no cost to their customers.

Many OEMs implement an all-or-nothing strategy, missing out on the larger opportunity to generate higher revenue and profits in the long term.

For dealers, it means not only turning their attention toward collecting and harnessing connected-vehicle data, but also leveraging its power though prompt follow-ups and timely reminders. In that way, they can nurture relationships and build customer trust – and it starts at delivery. According to our research, only 32% of auto buyers currently rely on salespeople at dealerships to learn about new-vehicle features and specifications.

That presents both a challenge and an opportunity: a challenge, given everything a salesperson is required to do at delivery; and an opportunity to point out the many service, safety, convenience and infotainment advantages built-in to their connected vehicles.

Across all industries, customers are increasingly becoming accustomed to life in a digitally connected world. If manufacturers and dealers fail to inform and convince customers of the value of connected-vehicle services and trade away long-term opportunities in exchange for short-term gains, they risk missing the mark on building valuable customer loyalty and not delivering on their billion-dollar revenue promise.