A new car is no longer simply a ‘product’ or a commodity delivered to the customer marking the end of a high-value transaction. Instead, the delivery of each and every new car represents a pit of customer data just waiting to be mined. This is all thanks to the connected car revolution – the surge in the number of cars equipped with internet access (and usually also with wireless LAN (Local Area Network)).
A brief history of the connected car
In 1996, General Motors became the first automaker to bring connected car features to the market and according to the latest connected cars report, we can expect 125 million cars on the road to be connected to the internet by 2022, including with 5G connectivity.
With a grand total of 1.2 billion cars on the road around the world, 125 million connected cars may seem like small fry. But actually, in countries like Germany, France and the UK, we can expect to hit almost 100% connected car penetration by 2020.
The connected car as a CRM tool
In 2019, a car is more than just a car. It’s also a channel for fast, personalised marketing and Customer Relationship Management (CRM).
As ‘connected’ and ‘smart’ devices continue to grow in proliferation, we must constantly reassess the way technologies we interact with on a daily basis add value to our lives. The Internet of Things (IoT) is now incorporated into so many everyday appliances, including fridges, toasters, washing machines and home thermostats, all of which can learn your preferences and make adjustments to deliver a personalised service to you.
The potential of the IoT is enormous, with conservative estimates predicting between 25 and 50 billion connected devices around the world by 2020. These devices are evolving into channels to upsell and/or cross-sell third-party services and products for an enormous potential market. In cars, this can involve things like car upgrades, parts, servicing and diagnostics, and even opportunities to bring a customer back to a dealership. So it should not come as a surprise that cars have joined this increasingly important connected technology revolution. But beyond the ‘in-car assistance’, what is the impact of connected cars on automotive marketing?
To address this question, it’s worth rethinking the value that the IoT adds to our lives. Yes, connected devices can provide monitoring and control of devices and applications to perform specific tasks, but it is analytics and predictive AI that are the most potent capability of all this data collection.
Data collection on an unprecedented scale
Connected cars have the capability to push service reminders, be integrated with booking systems and feature built-in WiFi/4G/5G that can connect between the customer, car and dealership. These connected features are constantly collecting user data by the way drivers interact. Amongst the data collected by a connected car, businesses can find a number of real gems like customer purchase patterns, geographical location, drivers of satisfaction, usage / driving patterns and habits, or even demographic / driver profile information such as age and income. The purpose of predictive analytics is to identify specific patterns (predictive models) and use them to predict future behaviour or anticipate the future needs of customers – from a service to new tyres or even a new car – and literally everything in-between. Dealerships can then act on this insight – through impeccably timed sales and marketing.
Prediction is everything – almost every principle of business has an element of prediction to it. But without valuable predictive insights, the likelihood of poor decision making is increased. Statistics are key to making good predictions, and the advances in statistical analysis and machine learning that are implemented in connected cars make it possible to make accurate predictions of individual customer behaviour.
So the biggest impact of connected cars, in relation to changing the course of automotive marketing, is to mine and aggregate operational data to make predictions about tastes and behaviours, and then use these predictions for a number of purposes. And it is this powerful prospect that businesses can take full advantage of with the help of the expertise of AlphaGraphics.
Connected cars and sales potential
The IoT, and all the analytics that come with it, is changing the way people interact with car manufacturers and dealerships. New in-car assistance technology enables drivers to remotely connect with operators to get assistance with issues like navigation, security and breakdowns. But there are many other benefits of this technology for automotive manufacturers to improve their CRM, as well as opening doors for new mutually-beneficial arrangements with third-party companies.
For instance, any automobile connected through 4G can offer mobile WiFi and excellent vehicle maintenance and diagnostics opportunities. This allows for targeted, relevant marketing that is of direct benefit to the consumer, as well as the manufacturer. Customers can use this technology to find nearby hotels and make reservations, making use of geolocation and collected data about the customer. Incidentally, AlphaGraphics can help automotive businesses leverage this to maximum effectiveness with the creation of highly personalised marketing campaigns.
The trend of connected cars shows no sign of slowing
There is a growing shift amongst drivers from being ‘owners’ to ‘users’, with car leasing and financing options providing more and more people with access to cars whose price tags would usually be too prohibitive. As things stand, to the masses connected cars still are a relatively new technology, and the majority of consumers are priced out of being able to buy them outright.
However, with increasingly competitive financing options, cars are being marketed in a different way, and connected cars are thus available to a wider audience. This is great news for car owners and dealers alike – who can both benefit from the convenience that data collection can bring.
Ultimately, the devices we use today are more than simple applications, and the developments in the automotive industry are some of the most important. We are going to see more and more cars that are more than just a means of transportation for consumers. They will become a means of communicating with both peers and manufacturers, paving the way for further innovation. Expect to see new partnership opportunities between car manufacturers and other businesses for which marketing through connected cars will make sense on an upsell or cross-sell basis.
Mass adoption of the Internet of Things is already happening, and the business world is banking heavily on this growth. Car manufacturers are racing to get their connected vehicles on the road, and other industries are exploring ways to integrate the IoT into their products/services.
The age of in-car customer experience is nigh, and AlphaGraphics is here to help implement effective marketing strategies that will leverage this exciting future for the automotive industry. Contact us to learn more about the work we do in leveraging new technologies to improve marketing for the automotive industry.
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