This means Value Added Services (aka bundling of services with the device) provides opportunities for a lower marginal cost with a higher perceived/ actual customer value. While the Cost of the device can only go down so much, the lever to manoeuvre could be the Service. Rest of the content in my post would attempt to understand some of the considerations that determine the business model.īusiness 101 tells us that that for any Telematics business model to be successful, it must equate to:Ĭustomer Value > (Cost of the device + Price of the Service offered) Of course, each Insurer has their own strategic priorities, their own customer base and their own context with which they will need to come up with their own business model that works for them. While that is good news, its crucial for an Insurance carrier to understand - what’s in it for them and what should be their going in strategy. And please beware, this is a long post ……īackground: Connected Car concept has passed the trial phase and is now going mainstream with the entire ecosystem of OEM’s, Insurance companies, service providers and technology companies jumping into it. Focus of the current post is on the potential business models Insurers can leverage for Connected Car / Telematics. I promise these would form a part of my future posts. Some of you commented on my not covering Connected Health and Smart Cities. Thank You for your overwhelming response and insightful comments on my last post.
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