The last time I bought a new car was a while ago, even though I worked and managed digital projects for the world’s largest car manufacturer.
A lot of people are like that. Especially the younger generations, for whom the car is less a status symbol than a commodity. At the same time, urbanization is growing, roads are crowded and the search for a parking space is becoming more and more difficult. As a result, owning a car becomes less attractive.
Alternative mobility offers, on the other hand, are on the upswing. Why own your own car when Car-Sharing and Ride-Hailing allow you to use one exactly when you need it?
This is contradicted by the fact that the modern world is becoming ever faster and more mobile, distances are becoming ever smaller. As a result, people’s need for mobility is increasing.
This must be answered with good products. The automotive industry is desperately looking for answers to the digital services of Uber, Google and Co.
In order to succeed in this, it helps to keep three central principles in mind that lead to better digital products.
- Develop iteratively, close to the customer
- Think motivational, not functional (customers are humans, not machines)
- Divide digital products into phases, don’t think of it as just one big thing
The most successful digital products take these three points into account very carefully. However, this requires rethinking they way digital products are built. The analog way of product development cannot be transferred one-to-one to digital services.
In the following arictle, I will explain the three principles in more detail.
Principle 1: Iterative development, quick testing of hypotheses
Cars don’t just have to function – they have to function as perfectly as possible. It’s unthinkable that the brake will fail even though you’re thundering all over it. If there are any problems, it’s expensive: Recalls and costly repairs must of course be avoided. So the automotive industry plans every new product life cycle down to the last detail, develops, tests, develops, tests, re-tests, and publishes only then.
For analog products like cars, which have countless mechanical parts, this makes sense. But not for digital products.
Make mistakes, learn, improve
When it comes to digital products, however, a totally different approach is completely normal. Products are developed iteratively. More often than not, the initial design looks very different from the final product. The customer is a part of this process.
Instead of planning, developing, testing and then publishing a product, functions are introduced bit by bit. It’s almost like selling the car without lights and windshield wipers, and then handing them over in a later patch. It goes without saying that this is not possible with cars.
But with digital products it is. Because those who first publish the minimum version of what they actually have in mind (MVP) can immediately recognize on the basis of the user data whether the function is actually good and is accepted. New updates can be published daily. That way, you constantly improve your product by making sure it’s the kind of functionality your users truly want.
It’s not about gazing into the crystal ball
Analog product development is like gazing into a crystal ball. You formulate a lot of hypotheses, develop the whole thing for a lot of money, publish it to the customer, and hope that they will actually like it. If your hypotheses were wrong, then well, screw you. Lot’s of money wasted.
Digital product development tests the hypotheses much faster. Instead of first developing everything and then testing it all at once, you can release small improvements and test them directly on the user. If it doesn’t work, those features can be addressed and improved immediately.
Analog thinking companies must first learn this approach. And that takes time. Time that their digital competitors are more than happy to use to come up with better services.
Principle 2: Humans are not machines
Cars are functional. Of course, they should also look beautiful – but in essence they are efficient machines that are trimmed for performance and perfection. That starts with the engine and doesn’t end with the cockpit. Automotive designers invest a lot of time in the logical arrangement of buttons, seats and steering wheel to make driving easy, comfortable and efficient.
In short, thinking in car product development is functional. Which also makes a lot of sense.
But digital products work differently. Not everything has to be functional and efficient, if at all. That’s because digital products that are only trimmed for functionality and efficiency are often terribly boring.
Humans are emotional beings, not machines.
It’s important not to forget that digital products are made for humans, and we are motivational beings. We do things when we are motivated to do them, when they are fun, when they give us a good feeling, when they are fulfilling.
However, many digital products from automotive companies seem to ignore this aspect and therefore do not work very well. It starts with what is actually very essential to their business model. The car configurators on the websites of the car manufacturers are often so complicated, overloaded and detailed that customers give up after the third combi-package change, which is automatically adjusted because they have selected the parking heater, that, for some reason, is not compatible with the Sport Chrono kit.
The configurators are functional, and yes, there are many possibilities to adjust your configuration to your very needs. But they are so incredibly demotivating, complicated and boring that I would really like to know how much money those companies that have particularly bad configurators lose out on.
Others embrace human emotions way better already. Digital services like MyTaxi or Uber are so successful because using their services not only works in a functional way but is also fun. ‘Engagement’ is the keyword here: Digital products shouldn’t just be functional, they have to engage their users. In other words: They have to motivate them to interact more often and with pleasure.
I have written about how subtle these mechanisms that make people want to interact with a digital product regularly can sometimes be, using LinkedIn as an example.
Principle 3: Consider engagement in all phases of use
Automotive companies face the danger of becoming what Foxconn is for Apple: Just a technology supplier in the background. To prevent this, they need to conquer the digital customer gateway and build attractive digital products that reach users.
For this to work, digital products must generate motivation in all phases of use. A customer relationship requires interaction. If prospective customers or drivers of a brand are to use digital mobility services in the future, digital channels are equally needed to bring these services to the customer. To achieve this, automotive brands need digital products that are used regularly. An app that is opened only once a month, for example, is not going to drive much new business.
Every user experience consists of several phases
Digital products consist of several phases, yet many companies neglect that fact entirely. For a user to interact with a digital product regularly, the experience needs to be motivating and engaging throughout all of those phases: When people become aware of the product, when they use it for the first time, but also when they become veterans.
Many digital products, for example, miss out on the first phase: The Onboarding. That’s when they first use the product and are introduced to all it’s functionalities in an engaging and motivating way. But it’s not only that. What’s more, often there is no content for power users – those who use it intensively and are actually convinced fans. If there is too little content for them, the motivation for interaction gradually decreases and the product loses its most valuable customers.
Digital products are therefore more than just the sum of their parts. Analog thinking companies need to adapt these characteristics of digital experiences. The basic question is: How do I build my experience so that it is attractive for first-time users, for regular users, but also for real power users?
For example, if you focus on regular use only, but don’t have onboarding, you lose a lot of users at sing-up, because they don’t understand the product or are simply not motivated to interact with it. Those who disregard power users, on the other hand, do not reach their most profitable customers.
If the automotive industry wants to establish long-term digital services that act as a customer gateway, all phases of use are important – only then can users be reliably monetized and engaged all the way from the initial registration through to frequent use.