The Second Era of the Connected Vehicle is officially underway. The convergence of 5G infrastructure, artificial intelligence (AI), and the Internet of Things (IoT) have created a new reality where drivers, vehicles, and Original Equipment Manufacturers (OEMs) are interconnected in a continuous innovation loop. The challenge for automotive companies is that software and services, which will soon be valued more than the sum of a vehicle’s mechanical parts, are best sold through flexible offerings such as a subscription model, and many OEMs have yet to build up this expertise.
That’s the realization one of our most strategic clients, a major automaker OEM, had when they first decided to market a wide range of in-vehicle connected services. They had mastered the technology, but they were still uncertain on how to monetize it. Enter the Subscribed Strategy Group (SSG), the division of Zuora exclusively responsible for helping companies succeed in the Subscription Economy.
As the leader of our client’s connected services team explained, “There is information overload in the subscription space. Trying to find something specific to your industry is hard enough, but it is especially difficult to find information applicable to your maturity level as a subscription business. We were looking for answers, and Zuora’s SSG team just kept coming up.”
“There is information overload in the subscription space. Trying to find something specific to your industry is hard enough, but it is especially difficult to find information applicable to your maturity level as a subscription business. We were looking for answers, and Zuora’s SSG team just kept coming up.”
Providing a 360° View of New Mobility
SSG initially focused on executive orientation. Zuora’s team of subscription strategists delivered an overview of mobility-as-a-service that educated our client’s leadership team on the latest trends in the world of “new mobility” and the various monetization options they had at their disposal. This introductory know-how was delivered before subsequent drill-downs on specific features and services.
The executive orientation attracted so much interest that our client asked SSG for insights specific to connected services. “We recognized that one of the biggest opportunities for us, given our size and brand awareness, was monetizing connected services—anything from premium navigation and entertainment to assisting driving capabilities,” said the executive.
In response, SSG issued a formal Request For Information (RFI) to better understand the current state of their technologies, go-to-market strategy and operational readiness. SSG’s request included artifacts such as service taxonomies, customer journey maps, market sizing research, target customer personas, and the full list of current and planned (pipeline) connected services. After processing the inputs, SSG delivered a “Launch Strategy Package” that shed light into specific strategies covering freemiums and free trials, pricing, packaging and bundling, memberships, driver engagement, performance management, and transformation management. This transfer of know-how lasted approximately four weeks and served as the foundation for taking the next step: identifying the right opportunity.
“We recognized that one of the biggest opportunities for us, given our size and brand awareness, was monetizing connected services—anything from premium navigation and entertainment to assisting driving capabilities. ”
Identifying the Right Opportunity
Our client now had a solid understanding of the landscape and what it would take to be successful in the Subscription Economy. They were in a position to assess all monetization options to decide where to start, and that case-study was none other than ADAS (Advanced Driving Assistance Systems), the next generation of driving autonomy. ADAS combines a suite of distinct features, like adaptive cruise control, levels of autonomy, enhanced parking and towing conveniences.
Collaborating to Execute the Launch
Our client and Zuora’s SSG engaged in a two-month long launch project, building deep trust in one another via continuous collaboration and brainstorming. Together, they rationalized the ADAS capabilities based on the outcomes they delivered (an outside-in view), identified and defined Key Performance Indicators to inform decision-making, and developed alternative pricing and packaging scenarios feeding multiple recurring revenue projections. The scenarios helped the team balance the need to keep a clean balance sheet, increase driver loyalty, and stay ahead of competition. The team also designed tactical action plans to keep both prospects and existing drivers constantly engaged and ensure they realized the value they were paying for. A major part of the toolkit was Zuora’s Unified Subscription Adoption Model (USAM). USAM helped our client prioritize connected services and estimate both the adoption potential as well as the maturity of the market. The team ran numerous internal workshops to make sure they were viable and competitive subscription offerings.
“The assistance we received in how to deal with the vast amounts of data in order to manage a potentially huge subscription offering was quite impressive. Identifying leading and lagging KPIs along the journey, and combining those with attitudinal and behavioral insights to inform decisions both at the strategic and tactical levels, was definitely one of the top three wins for us. We knew how to measure and manage what really matters in a subscription business,” explained the executive.
“The assistance we received in how to deal with the vast amounts of data in order to manage a potentially huge subscription offering was quite impressive. Identifying leading and lagging KPIs along the journey, and combining those with attitudinal and behavioral insights to inform decisions both at the strategic and tactical levels, was definitely one of the top three wins for us. We knew how to measure and manage what really matters in a subscription business.”
ACHIEVING A SUCCESSFUL MARKET ENTRANCE
Ultimately, SSG helped our client clearly define what the ADAS packages might look like. As a major player in the space, the OEM was uniquely positioned to monetize hundreds of innovations; however, in absence of a clear subscription strategy, any launch is at risk. Miscommunication of benefits, targeting the wrong segments, bundling incompatible features, lacking subscriber engagement tactics, not measuring causes and effects, could fatally undermine the success of one of the most critical initiatives in the company’s history. The continuous strategic support from Zuora’s SSG team made their launch a success, enabling them to pivot from a sell-and-forget model to one of continuous value delivery.
As of today, our client is among the automotive leaders in connected services. They are progressing to the next stage of their Journey-to-Usership, which we call “Optimize”: iterating on offerings to maximize subscriber acquisition and adoption. They continue to work closely with SSG. “We’re on a journey to better serve our customers,” says the executive. “And we’re looking forward to continued sharing and continued partnership with SSG.”.
