Getting to the bottom of BMW's pay-as-you-toast subscription failure
Fuming customers steamed as they'd already paid luxury prices
Opinion It's enough to warm the cockles of more than your heart. After an experimental rollout in a few test markets including Britain, posh motor maker BMW has abandoned its subscription plan to activate heated seats.
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Not only were drivers unwilling to cough up a constant stream of cash in exchange for coccyx-centered comforts in cold climes, the plan had attracted a rare degree of outrage. The marque's cadre of owners are normally happy to pay through the nose for everything behind the blue and white badge. Not this time.
For a BMW feature to trigger the value-for-money tripwire among those who splash the cash for status all the time is a remarkable turn of events. It seemed unacceptably, almost offensively greedy. As such, it's a lesson to be learned for any industry looking towards subscription as a significant revenue stream – which is most of the IT services and software industry. BMW broke a cardinal rule of consumer psychology, one that other sectors approach but are too savvy to overstep.
Take the exciting, glamorous world of high tech test equipment. In analog days, companies like HP and Tektronix charged a prince's kidney for very high quality engineering, much like BMW. You, or more commonly your employer, wrote huge checks and got tens of kilograms of mechanical and electronic wizardry that achieved extraordinary levels of precision through palpable class. Upgrades came as comparably expensive plug-in circuits built to the same high standards.
Such notions still exist at the edges of the ecosystem, but digital has changed the rules everywhere else. High precision engineering is limited to whatever bits collect or send out analogue signals, but the bulk of the work is number-crunching software in standard components. Often, production economics compel that multiple models in a range have the same core circuitry from entry-level to executive. It costs too much to make them cheaper. The value differential is maintained by software alone, with more features unlocked as you go up the ladder – or buy licenses as after-market options.
Electronic test gear goes to people who know it works, and they often mumble to themselves about not being allowed to use what they've paid for. There is a lively scene in finding ways around the software limits by hacking firmware, spoofing model IDs to load more expensive system software, or just mucking about with the hardware.
Yet engineers are canny enough to accept that this model allows the cheaper models to benefit from the R&D that powers the top. Your $750 oscilloscope may have much less bandwidth than the $2,000 version, but it has the same look and feel and general build excellence. You may even feel a bit smug at your canny choice. And it is a purchase, not a subscription. There's no crime in enabling features after purchase per se.
Elsewhere, subscriptions are entirely decoupled from the hardware. You might have a cheap smartphone or a sleek net streamer system that costs 10 times as much, but the value of your Spotify or Tidal subscription doesn't feel inappropriate for either. This becomes less so for products like content creation or productivity tools that you used to be able to buy outright, and use until you wanted to change.
You might always be getting the latest version of a subscription package every time you log in, but a significant part of your control has gone. This dissatisfaction increases as your tool provider approaches monopoly status, when they can hike prices and go off to the pub whenever they want. Approaching BMW levels of cynicism, perhaps, but there's still a veneer of value.
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BMW abandoned even that. Once the heated seat is in, the only cost in running it is to the driver who pays for the fuel that energizes the circuit. It's not as if it costs BMW no more to fit the heater than leave it out: it's not a fractions-of-a-cent capacitor or even a $10 op-amp instead of a $5 part. If the customer wants a warm throne, they'll pay for the option at time of sale. There's nothing more BMW can offer – there's no more luxurious, higher fidelity, more entertaining warming-as-a-service, at least any that are appropriate for the public highway. BMW wanted to take your money, and keep taking it in perpetuity, while delivering nothing.
It's more than the 20 bucks a month that jars. As everyone with an ounce of forethought readily realizes: if you tolerate this then your chilled air will be next. Or the broadcast radio. Or anything else that distinguishes the BMW driving experience from that of piloting a 2CV. Rent a thing or buy it, there are good reasons for both. But buying a high-status thing that you have to rent random bits of is making you a supplicant when you want to be king of the road.
Subscription models are hot and getting hotter, but like a car seat they have to fit the fundamental needs of the user. If you burn your customers, they can just switch off, and if you rip people off too badly they never come back. It is to BMW's shame that the idea even made it off the marketing whiteboard, when anyone with empathy for the customer could have told it what a colossally stupid concept it was.
Nobody needs a BMW, just as nobody needs an iPhone 15 Pro Max: they just need to feel like they do. And it's hard to keep that love if your brand is branding you as a dummy. That's an idea to which BMW, and anyone planning a new service, would do well to subscribe. ®