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Why microtransactions put BMW in the hot seat

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Why microtransactions put BMW in the hot seat

BMW heated seats

When you live in a country like Canada, where it feels like sub-zero temperatures are the norm for much of the year, you can easily understand the appeal of heated seats in your car. Hopefully that doesn’t mean BMW will bring its controversial subscription model here.

Earlier this month I began to see angry, almost unhinged posts on social media services like Twitter that BMW was going to be charging customers monthly for heated seats. It took some digging (and reading more than the headlines) to learn that this particular subscription is only offered in South Korea so far.

So far, it will cost BMW customers there roughly $18 a month to keep their butts warm. However they also have options for an annual $180 subscription, a three-year deal for $300 and $415 for unlimited access. This is hardly the only such service, however, as noted in an article on The Verge:

Other features that BMW is locking behind subscriptions (as per the company’s digital UK store) include heated steering wheels, from $12 a month; the option to record footage from your car’s cameras, priced at $235 for “unlimited” use; and the “IconicSounds Sport package,” which lets you play engine sounds in your car for a one-time fee of $117.

These were dubbed in the article (and I gather by the auto industry as a whole) as “microtransactions.” For many car buyers who once found it easy to pay a one-time fee to get a “fully loaded” vehicle, of course, it represents a degradation of the customer experience.

The on-demand economy in overdrive
Advancements in technology are partly to blame here. Car makers would once have had to engineer the hardware of a vehicle specifically to offer extras like heated seats. As the auto sector joined other markets in layering applications into their products, it meant brands like BMW could take advantage of the software-as-a-service (SaaS) model.

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In this case, though, instead of a streaming service where you watch content on demand, the software is simply activating features already built into the car. You can probably imagine the internal meetings where someone at BMW argued this was creating a VIP-style experience for it target clientele. Based on the social media reaction, however, there are a number of existing or potential BMW customers who feel the move makes them feel like its least important people.

I wouldn’t rule out microtransactions in the car industry, or any other. It’s just probably better to ensure that what’s offered are net-new enhancements to the customer experience, or enhancements that have traditionally been at such a premium (vis-à-vis other players in the same market) that a subscription offers significant cost savings and convenience.

To put it another way: microtransactions should make customers feel as though you’re putting the experience you deliver them into high gear. Otherwise you risk driving them away in droves.

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