Why telematics needs better consumer marketing

Why telematics needs better consumer marketing

Research from Altman Vilandrie & Company finds that consumers' preference for automotive features generally correlates with their familiarity with those features. In other words, you don't know if you want something until you try it. Altman Vilandrie is a strategy consulting group that focuses on sectors including communications, media and the smart grid. The study of 1,000 drivers revealed a strong demand for new in-car technologies, including wireless communications and advanced navigation.

The survey asked consumers about 20 high-tech features, from displaying phone apps on the dashboard and streaming video to voice-controlled navigation and satellite radio. The most preferred media features were voice-controlled navigation and real-time traffic updates, while 70 percent of drivers were interested in the opportunity to turn their vehicles into Wi-Fi hotspots, despite a clear or compelling use case for doing so.

"We did not find a lot of awareness for things that are not already in the market today," says Jonathan Hurd, who led the research and is a director at Altman Vilandrie & Company. "The thing people were most familiar with is satellite radio, and Bluetooth connectivity is right behind it." Hurd says that many survey respondents were familiar with voice-controlled navigation, thanks to TV commercials showing people speaking to their nav systems.

Education required

Roger Lanctot, senior automotive analyst at Strategy Analytics, says the problem automakers have is "getting the word out that they have it, it works, and why it's so cool and makes sense. You wouldn't even know Kia is shipping the Uvo, and nobody is talking about Blue Link. There's a big education effort required."

Even Ford, which released SYNC in 2007 and has installed the tech in more than three million Ford vehicles to date, found that many drivers were unaware of some of the features. It also has dropped prices and just simplified the MyFord Touch interface to make it easier to use.

Michelle Moody, cross-vehicle marketing manager for Ford, says the company has seen positive reaction from the subset of consumers who need navigation for work or personal driving. "The jury is still out on how many people have that need. We have not found that space yet; we are still seeing growing demand," Moody says. Ford has lowered the option price, while paring down the feature set. Moody says the company is still working on how to connect with consumers, especially the "waders, people who stick to the shallow end of technology."

The Altman Vilandrie study found that income was not a driving factor for interest in telematics services. The three characteristics that tended to drive increasing interest in automotive media features were length of commute time, age and smartphone ownership. "Being 18 to 34 years old, a smartphone owner and having a daily commute greater than 60 minutes total was the sweet spot," Hurd says.

Skewed market view

Is the auto industry deluding itself about consumer appetite for automotive telematics? Maybe, says Hurd. While OnStar has charged a premium for its long-established high-touch safety and security services, it's not clear how much most drivers want telematics options, nor how much they might pay. "Emergency-type safety and security service is highly valuable, but most people don’t think they will need it," Hurd says. "It's always a challenge to charge a monthly fee for something you don't use."

Perhaps, in part because awareness is already high, Altman Vilandrie found that consumers desire and are willing to pay for advanced navigation services, including real-time traffic. "A navigation-focused offer would do the best, that's the clear takeaway," Hurd says. "There is so much interest in navigation that if you can find a way to create really compelling navigation, anything that's innovative with a great user interface that allows people to interact, that increases the value [of an offering] without it's necessarily being the focus of the offer.

According to Lanctot, OEMs should do more to entice their dealers to promote telematics and connected-car services. He says part of the awareness gap is that dealers are not really behind safety and telematics features because they don't see what's in it for them. Safety and infotainment systems need to be embedded in the OEMs' strategy and marketing. "The people writing checks to ad agencies and the dealer relationship guys have to start spending some bucks on messaging to the consumer and to the dealer," Lanctot says.

Susan Kuchinskas is a regular contributor to TU.

For more on telematics and marketing, see Consumers and UBI: The power of value-added services.

For more all the latest telematics trends, visit Consumer Telematics Show 2012 on Jan. 9, 2012 in Las Vegas, V2X Safety & Mobility 2012 USA on March 20-21 in Novi, MI, Content & Apps for Automotive 2012 on April 18-19 in Germany, and Telematics Detroit 2012 on June 6-7, 2012.

For exclusive telematics business analysis and insight, check out TU’s reports on In-Vehicle Smartphone Integration Report, Human Machine Interface Technologiesand Smart Vehicle Technology: The Future of Insurance Telematics.


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