Q&A with an Expert: Why User-Centric Design is Key to Car Data Monetization?
Connected and autonomous cars generate a massive amount of data, which will form a multi-billion market in the next 5–10 years. Automotive businesses are already looking for ways to unlock these new revenue opportunities. We asked John Strutton from @axitech why the focus on user experience is crucial for successful car data monetization.
— Researchers suggest that automotive players should adopt a market-back approach to creating car data products instead of a product-forward method. What’s your take on this?
— Historically there have been a lot of products/features in automotive that were created product-forward. I think this is because seeking immediate feedback in large scale engineering products is very challenging. However, with the connected cars being predominantly focused on creating sticky customer experiences through software services, there is really no excuse not to focus on the user as part of the market validation activity.
I believe getting close to the customer is a crucial source of competitive advantage, which is why the iterative development methods are so important. There are many ways to emphasize customer experience, but given the global scale of automotive businesses, scalability of these approaches is vital.
Generally, analytics and experimentation tools have been underutilized, and in my view, they offer the best, fastest, and cheapest way to be data-driven in decision making. The industry is only beginning to realize the value of those tools. I am hopeful that with their adoption, we’ll see the emergence of products that achieve product-market fit early in their development cycle.
— Users are ready to pay for car data features as long as a fair value proposition is offered. How does the focus on user experience help to create and communicate the value of car data products and services?
— Marketing and pricing software on a feature by feature basis will always be extremely challenging since customers are generally used to free services. There is some fascinating behavioral science behind software monetization, and all stages of the buying journey need consideration holistically.
UX is essential in the ‘consideration’ stage, not only for communicating the value but for making it easy to go through and purchase something. There certainly is much to learn from the decades of evolution in how SaaS products have been positioned, in terms of marketing, pricing models like freemium and bundling, and importantly conversion optimization.
Automakers have such an excellent opportunity to transform the buying of services and are in a privileged position to have both frequent physical and daily digital touchpoints with the customer. I believe this is one of the critical barriers to monetization, which needs a focus across the industry.
— How does the adoption of UX design principles help to leverage cost reduction, delightful customer experience, and quality of car data products?
— User experience to me is how well the product serves to meet the needs of the customer. So, if businesses focus on UX, they are more intentional with how to design and position products to maximize the value created. There is always a cost implication on delivering high-quality products, but through adopting the lean methodologies, you hope to provide customer value early and often, which builds up a clearer picture on where effort should be placed in to be most effective.
— What impact the use of UX patterns has on the integration of car data related features into an ecosystem of connected services?
— Creating an ecosystem of services is an extremely challenging UX problem because there is an overarching brand that is trying to permeate through the digital experience. Often the best UX patterns are surprisingly simple, but this simplicity is easily spoiled through minor changes attributed to a need for ecosystem providers to differentiate.
I believe the adoption of common UX patterns and taking a portfolio design approach benefits the speed of development, as technical integrations with ecosystem members can be assessed in context with the broader design vision. I firmly believe that the ecosystem with the best UX will always prevail, so careful attention needs to be paid at the boundaries where the integration parties meet.
Being on the other side is also challenging, as customization of services and maintenance of variants for each ecosystem partner presents a challenging commercial situation. For this reason, both UX patterns and SOA best practices are crucial to ensure integrations can be mutually beneficial.
— In your opinion, is prototyping essential for the development of car data products?
— Absolutely! To quote Steve Blank, “No plan survives first contact with customers.” Connected car services are challenging to execute and generally take longer to develop than independent products, so it’s even more costly to get things wrong. There is usually an under-appreciation for customer-validated learning in the automotive industry, and prototyping is just the first step to this validation activity.
Perhaps this is due to a difficulty in getting in front of representative customers to quickly test prototypes. There are certainly ways to get creative with testing an idea, and they do not have to involve any product development, sometimes the best learning comes from just getting out of the office and interviewing people with some well-prepared questions.
— What user retention strategies do you find most useful for car data products?
— User retention is an exciting topic for connected car products. The importance of retention depends on the product being offered to the customer.
From an automaker’s perspective, getting users to renew their connected car services after the initial product lifetime is always going to be difficult because the user expects a breadth of new services to be made available and the depth improvements to the existing services offered to be improved before warranting a repurchase.
I believe subscription strategies are the best way to deliver a development system that incentivizes retention, but also importantly incentivizes the internal development teams to operate using a data-driven approach.
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