TIOT Iss.5 - The rare feel good story

Source: Volvo

I’m still cheesing from reading an interview with Eric Severinson, conducted by Lorenzo Curatti just a few days ago. For those unfamiliar, Eric Severinson is Volvo’s Chief Commercial Officer—just one step below the top spot at the company. He plays a major role in shaping Volvo’s strategy, particularly when it comes to monetization.

While other premium automakers are nickel-and-diming customers—like BMW’s infamous heated seat subscription—Severinson is standing firm in his belief that, “someone spending about $80,000 shouldn’t be asked to pay another $5 a month for basic functions like heated seats.” I couldn’t agree more. He also went on to explain, “the goal remains to make the customer feel like they’re getting a premium, hassle-free experience—that’s what creates value and, in turn, profit.” This is exactly the kind of thinking that's missing from the auto industry today! Just because you’re not squeezing every last penny (or should I say nickel?/RIP to the penny) out of your customers doesn’t mean you can’t be profitable. Buyers are often willing to pay more upfront if it means avoiding a lifetime of subscriptions that make the car cost more in the long run. Even though Volvo's more recent cars haven't impressed me, I must say their next-gen models with new features and a revenue plan that doesn't turn your car into an insatiable leech for your wallet interests me.

Pretend to be automotive executive and ask yourself this question - would the public rather pay a lower price upfront but pay more over time in subscriptions, or would they prefer a higher initial price that doesn't come with subscriptions? I can’t wait to hear your thoughts and to catch you next Tuesday!