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Product-centricity vs customer-centricity

Last updated on 
September 23, 2022
Introduction

Introduction

Sourcing Vehicles

Sourcing Vehicles

Procurement

Procurement

Financing

Financing

Acquiring Customers

Acquiring Customers

Above The Line

Above The Line

Point of Sale

Point of Sale

Key Value Propositions

Key Value Propositions

Discounts & Promotions

Discounts & Promotions

Lead Management

Lead Management

Inbound Lead Generation

Inbound Lead Generation

Outbound Lead Generation

Outbound Lead Generation

Managing Customers

Managing Customers

Customer Onboarding

Customer Onboarding

Customer Service

Customer Service

Customer Experience

Customer Experience

Legal Agreements

Legal Agreements

Receivables & Arrears

Receivables & Arrears

Collection & Handover

Collection & Handover

Delivery

Delivery

Fines & Tolls

Fines & Tolls

Breaches & Reposession

Breaches & Reposession

Insurance & Claims

Insurance & Claims

Eligibility

Eligibility

Claims Management

Claims Management

Incident Management

Incident Management

Fair Wear & Tear

Fair Wear & Tear

Fraud Risk & Prevention

Fraud Risk & Prevention

Managing Vehicles

Managing Vehicles

Subscription Structure

Subscription Structure

Profitability & Performance

Profitability & Performance

Despite what the marketing boffins may tell you, the automotive industry has been product-centric since the very first Model T rolled off the production line 1908.

Since then, automakers have been competing to develop the most powerful, most efficient, safest, most reliable and most technologically advanced cars on the market, and then sell them en masse to consumers.

There's nothing wrong with a product-centric approach, however as we move away from a one-size-fits-all approach and toward more tailored customer experiences, the automotive industry will also need to adapt with more customer-centric business models.

What is product-centric?

A product-centric company will invest heavily in developing new and advanced products that appeal to the widest possible market of buyers. This could be a single product, or a range of products aimed at serving specific market segments.

Rather than working on a principle to meet the individual customer needs and challenges, a product-centric company will instead operate by highlighting a perceived need that its product can fulfill.

The performance of a product-centric company is typically measured in sales volume - with poor performing products culled from the business.

Ironically, the automotive industry to date is the textbook example of a product-centric company.

Figure 1. A product-centric business will focus on developing products to meet the widest potential market.

What is customer-centric?

A customer-centric company places the individual consumer at the centre of their strategy, maintaining a greater emphasis on the customer journey and customer loyalty.

Especially for commodity industries where product innovation and differentiation may not be possible or immediately apparent, customer-centric companies rely on generating business through repeat customers by maximising recurring revenue and increasing customer lifetime value.

In a customer-centric space, companies compete on service, retention and loyalty by aiming to provide the best value and customer experience.

Figure 2. A customer-centric business will focus on solutions and services that cater to individual customer needs.

How does car subscription create a customer-centric experience?

Traditionally, the automotive industry has been focussed on single transaction customer experiences with the vehicle as the primary focus. Essentially, the key metric for the automotive industry is vehicle sales volume.

In contrast, car subscription places the customer as the centre of the value

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