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.
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.
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.
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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