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Editor's Notebook

Vehicle Subscription Models Put a Twist on Consumer Choice

With a new vehicle representing consumers’ second-largest purchase, their expectation of inherent value, especially on big ticket items, raises the question of whether this move by automakers will be seen as a means to over-deliver on customer expectations, or a way to fuel their revenue pipelines to offset slumping vehicle sales numbers.

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Through the years, clever marketers have successfully helped countless companies introduce products that put a new spin on something old or familiar. One classic example is how subscriptions have evolved from the book or magazine of the month variety, to a host of other pay-as-you-go options all centered around convenience, selection, the element of surprise/discovery, long-term perceived value and ease of use.

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There is everything from meal kits (HelloFresh) to pet products (BarkBox) to personal styling services (Stitch Fix), not to mention the hot sauce of the month, cheese of the month, wine of the month and “you name it” of the month clubs — all aimed at capturing recurring and predictable consumer dollars.

Offering something for everyone, the head-spinning laundry list of subscription services has mass consumer appeal. But, shifting this concept into the automotive space, currently on the drawing board at many OEMs, takes the allure of customer choice to a whole different level, and with no guarantee of consumer buy-in.

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While enhanced vehicle technology and electronics will enable the subscription concept for various safety, security and entertainment features, how many car buyers will be willing to make payments on an on-going basis for these options, versus paying for these features as one rolled up vehicle purchase price? 

A recent NBC News article sheds some light on the range of OEM vehicle subscription service concepts:

  • BMW is contemplating the idea of imposing a monthly charge for heated seats and adaptive cruise control.
  • Mercedes may charge for “soundscapes,” or digitally generated sounds substituting for the engine and exhaust “notes,” for its new EQS electric car.
  • Ford’s Blue Cruise semi-autonomous system already adds as much as $3,200 to the sticker price, but drivers will also have to pay $600 for a three-year subscription to activate the technology.
  • GM’s new Maps+ targets owners of vehicles that weren’t equipped with built-in navigation. For $15 a month, owners can add navigation to existing services on their in-car touchscreens.

With a new vehicle representing consumers’ second-largest purchase, their expectation of inherent value, especially on big ticket items, raises the question of whether this move by automakers will be seen as a means to over-deliver on customer expectations, or a way to fuel their revenue pipelines to offset slumping vehicle sales numbers.

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It’s anyone’s guess as to how many consumers will add vehicle enhancement offerings to their list of subscription services. Regardless of their level of engagement with this concept (those who think they should be included versus those who don’t mind itemization), one thing is certain. They will always need a trusted provider to service and repair one of their most valued possessions, and that’s where your expertise, integrity, professionalism and skill will combine to create an environment that will turn customers into life-long ambassadors for your business where value trumps price on every level.

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