Axios has a story about how automakers “are embracing a new business model that requires paid subscriptions to unlock everything from entertainment options to enhanced navigation and hands-free driving.”
For example, “Ford recently announced new options for accessing its top-rated BlueCruise hands-free highway driving technology. Buyers can activate BlueCruise at the time of purchase for three years by rolling the $2,100 cost into the financing. Or, they can use BlueCruise for free for 90 days, then activate it later for $800 a year or $75 a month. They can even subscribe for a road trip and reactivate it as needed.”
Other companies pursuing similar approaches include Tesla, General Motors and Mercedes.
Axios makes the point that one of the things that seems to be driving car-related subscriptions is the ability to test out the services first.
“Car buyers are open to subscription add-ons — if they get to try the services first, according to a recent S&P Global Mobility survey,” Axios writes. “It’s difficult for buyers to fork over thousands of dollars at the time of purchase for technology features they’re not sure they’ll use, the survey found. 82% of respondents who had experienced a free trial or an existing connected service plan said they would ‘definitely’ or ‘probably’ pay for it on a future car.”
KC’s View:
In other words, dangle some great-tasting bait in front of shoppers, allow them to nibble a little bit for free, and then offer them the ability to have a great meal.
In essence, it is sampling. I don’t think there’s any question that when retailers offer shoppers to sample products and services – even new technologies – as opposed to forcing them to buy in from the start, they can be more successful at moving the needle in terms of consumer behavior.
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