As published in Automotive World.
Personal is Profitable: Monetising Not Just Data But Identity
The opportunities from monetising mobility data could reshape the industry landscape and the way in which car manufacturers design their products.
Drivers are increasingly looking for personalised treatment in everything from their HMI to their reception at a dealership. For automotive companies, knowing who your customer is and predicting their preferences could prove a game changer. Personal data can be found in many places; the key is to access it and use it effectively. McKinsey has been looking into ways of monetising the data that comes out of the connected technologies in vehicles. “In these last three years, we heard an increasing number of our clients – automotive manufacturers, Tier 1 suppliers, high tech players and service providers – trying to get a better sense of the economic opportunity related to car data,” Michele Bertoncello, Partner at McKinsey, told Automotive World.
Overall, McKinsey estimates that the global revenue pool from car data could reach between US$450bn and US$750bn by 2030. “Besides the number itself it is worth noting that the set of opportunities related to monetising data from mobility could significantly reshape the industry landscape and the way in which car manufacturers, Tier 1 suppliers, and service providers design their portfolio of services and their products. It’s a big opportunity,” he emphasised.
Amido is a technical consultancy specialising in customer identity, search and cloud services. It views customer engagement as the Holy Grail, and a trend that will be in force for years to come. It is helping companies make the most of customer data. “We are by no means experts on the automotive industry, but we are experts in identity,” Amido Chief Executive Alan Walsh told Automotive World. “It is an exciting time for the manufacturing and automotive industries as there are so many new opportunities for companies to get closer to customer in order to grow their business and their revenue.”
The main goal, in Amido’s view, is to understand who the customers are and what they are doing, drawing on real-time information.
The potential insights and benefits touch many aspects of the automotive value chain. “It is very much around how well the manufacturer knows the people driving their cars. As far as I’m aware they don’t really know them,” Walsh suggested. With the technology and the data available today, this doesn’t need to be the case. “When the companies start putting out information about the people driving their cars, it will allow them to upsell, to cross-sell, to sell them the next model,” he said. “There is no need for a separation of the manufacturers from the customers because the data is possible. This is potentially where the next stage in the evolution around technology with car manufacturers will go.”
Customers are looking for a personal experience at all points in the purchase journey.
The benefits can trace all the way back to how the car is designed in the first place. “If you can study how your vehicles and services are being used, you can better tailor their design and choose the most appropriate materials,” observed McKinsey’s Bertoncello. “You can reduce the over-engineering on certain parts and maybe focus on something that turns out to be more critical for the customer.”
This only comes from understanding who your customer is. “Identity is key,” emphasised Walsh. “I think we’re missing a trick. All these connected cars mean there’s a lot of data that’s available to know who the customers are and how they’re using the cars they’re driving. Automotive companies are missing an opportunity to link identity and customer information. They need to engage with the customers and figure out not only who they are but how they behave.”
And that could help provide them with a piece of the US$450bn-US$750bn pie predicted by McKinsey. “Car manufacturers already have an enormous amount of data at their disposal but, more often than not, they do not have a complete map of their data assets,” observed Bertoncello. “When they do, it normally lies in the IT department, not in the strategy department. It’s almost like the IT guy knows whether we have the number of kilometres driven by our customers.”
Some players are starting to take notice, though. In Bertoncello’s opinion, automotive companies are making rapid developments on this front. “Most progressive car manufacturers and Tier 1 suppliers have started developing use cases, putting a dollar value behind it. They have also started realising how complex it is to bring all these use cases to the market, and started challenging their internal processes and organisational structures,” he commented. “There are quite a lot of different answers to that question, but they are trying to find an answer.”