Data monetization presents a huge opportunity to the automotive industry, and many OEMs are sitting on potential data goldmines. But, the lure of additional
revenue in the short-term may cause OEMs to forget their number one priority - creating happy and
loyal consumers. An organization that prioritizes revenue generation (i.e.
monetization) over customer satisfaction risks damaging their brand image.
Some automakers, such
as Volvo Cars, have publicly turned their back on monetizing vehicle data. Its CEO, Håkan Samuelsson, said last year, "If we focus on trying to make money with driver data,
I don’t think we're delivering what consumers want in their cars."
Tesla is another example of an automaker that has not (as yet) pursued the potential revenues offered by vehicle data monetization. However, it has found many ways of using data to empower the customer experience. One recent example is the ability of Tesla’s vehicles to diagnose a fault which, if unable to be fixed over the air, can be aided by the pro-active ordering of replacement parts. As detailed in SBD’s 2018 - Remote Vehicle Data and Diagnostics Report, automakers can make huge savings if they find creative ways to use vehicle data. Therefore, SBD advises that business use cases should first and foremost be drawn up with the customer at the heart of them. Any revenues from the data following that should be seen as a convenient by-product.
There are lucrative options that can benefit both automakers and consumers. By
charging third parties for access to vehicle data, new and useful connected
services can be created. This could include enabling trunk delivery, turn-key
UBI, predictive traffic alerts, predictive maintenance scheduling, or lease
value maximization. These types of services are likely to be appreciated by the
customer and will engender greater loyalty.
cases should be thought of in terms of the value that they bring to the
customer, creating long-term brand loyalty (and hence revenue) and maximizing positive consumer
interaction. Any additional short-term revenue should be considered a bonus.
successful data monetization program requires executive representation to
ensure budgets, resources, and priorities can be maintained within the wider
organization. The most successful programs are represented through a CDO or
similar executive position. Without this representation, the program is likely
to be judged against short term revenue trends which can be difficult to
establish. A longer-term view is required to allow technical obstacles to be
overcome and for 3rd party relationships to be established.
Each time that a third party integrates with an OEM data platform, they need to make a rational decision on the likely returns relative to the integration effort. Data consumers will want to be sure that their necessary
integration overhead is justified by the value of the data. The OEM’s program
should offer a large quantity of connected vehicles as compared to other OEM
programs and the data catalog for each vehicle should be sizable, offering the
data consumer unique, high-quality data sets.
automotive data monetization industry is still nascent with new opportunities
arriving just as quickly as existing ones disappear. A scattered or frantic
approach to data monetization will lead to the proliferation of unsuccessful
products and services. Set a goal and create a strategy to reach that goal,
allowing progress to be measured regularly to ensure the program isn’t straying
from the path.
privacy and right-to-repair legislation is evolving quickly in the Western
hemisphere. Failure to comply with the laws can lead to enormous fines. To
ensure that an OEM’s monetization program is compliant with upcoming
legislation, legislative activities should be monitored closely. Furthermore,
OEMs should make cooperative arrangements with each other to lobby relevant
governments to ensure protection of critical program rights.
it may require more resources up front, creating an open, scalable data
monetization back-end will ensure simple integrations in the future and enable
compatibility with a wide variety of 3rd parties. As examples, PSA and BMW have
created open APIs for their monetization platforms, allowing any 3rd party to
quickly and easily integrate, test, and scale without additional effort from the
OEM. Consider making your data available on a data marketplace to further
reduce integration effort.