Aftermarket Telematics: Your Next Profit Center
What is telematics, and why should we care? A few months ago at an AAPEX educational session, a speaker posed this very question to the audience. He summed it up in a 55-second television ad for a Chevrolet Impala connected by OnStar. In just a matter of seconds, flashy images of a shiny Chevrolet filled the screen as a futuristic voiceover lined out the benefits of the connected Impala. “A diagnostic signal flew through your engine, transmission, brakes and a few other systems you didn’t know you had,” boomed the voiceover. “You check your email and see your car is just fine, thank you, but your left rear tire pressure is a little low, your oil life is at 15 percent and you’re due for a new filter. It dawns on you that you live in an amazing time when cars can diagnose key systems and send reports.”
Many of us drive vehicles that already contain OE-embedded technology. We receive marketing messages, and we get emails. It’s all part of a strategy designed to build a stronger relationship with the customer after they drive off the lot. These days, it would be difficult to find an OE that isn’t developing and implementing a telematics or connected car strategy. For example, in 2013, BMW announced that every BMW sold starting with the 2014 model year will have two features —automatic crash diagnostics and remote diagnostics — turned on at no cost for 10 years.
So why should you care?
One of the most recognizable telematics systems, General Motors’ OnStar, is contributing to a 70-percent customer return rate to dealerships. Imagine if this technology could help you achieve a 70-percent customer retention rate, as well.
“They have the tremendous ability to lock the consumer into one service provider,” said Dave Prange of ITW. “The OEs are all going to have a telematics strategy with their newer vehicles. It’s going to provide a challenge as large tire chains and players like Sirius get in the business. Tomorrow’s quick lube operator will have to be prepared for telematics and the impact it will have.”
In our hyper-connected world, where smartphones, tablets and laptops are rapidly changing the way we communicate, companies are recognizing the importance of interacting with the consumer online. OEs are no different.
“Telematics put the OE online with their product,” said Roger Lanctot, associate director, Global Automotive Practice for Strategy Analytics. “They can monitor the vehicle, look at the odometer and proactively send out maintenance reminders.”
Oil life is among the many things an OE monitors through the embedded telematics system.
“The OE knows how much life is left in the oil,” said Malcom Sissmore, North American Sales Director, Tools, Training, Telematics & Service Information and Country Director Canada, Delphi Product & Service Solutions (DPSS). “At the same time, on the consumer side, you may see you have 62 percent oil life left. The dealer is also able to see that, know when someone needs an oil change and is able to go out solicit that business.”
While these connected cars are sending diagnostic signals through a vehicle’s system and email maintenance reminders to the driver’s inbox, the aftermarket remains largely offline, waiting to react.
However, the automotive aftermarket is beginning to adopt telematics strategies of its own.