Last year, BMW faced significant backlash from the media and customers due to its controversial decision to introduce a monthly subscription fee for heated seats. Although the subscription included various other features, the heated seats option drew the most vehement criticism, primarily because it involved hardware already installed in the car at the factory. After enduring months of relentless customer dissatisfaction, BMW has ultimately chosen to discontinue the practice of charging recurring fees for hardware-based functions.
Speaking to Autocar, BMW’s marketing chief, Pieter Nota, stated, “What we don’t do any more—and that is a very well-known example—is offer seat heating by [monthly subscriptions]”. He emphasized that it’s a straightforward choice now – whether the feature comes with the car from the factory.
BMW’s Dual Approach to Heated Seat Integration
BMW’s decision didn’t revolve solely around introducing monthly charges for heated seats. Instead, the luxury automaker aimed to optimize its manufacturing process and cut down on expenses by integrating heated seats into all of its cars. This was driven by the fact that approximately 90% of BMW customers choose to purchase cars with seat heaters as an option. Consequently, those who initially didn’t select heated seats during the vehicle’s purchase could later activate them digitally through either a monthly subscription or a one-time permanent purchase option. Notably, some still believe this was a sound strategy.
Note informed Autocar, saying,”We thought that we would provide an extra service to the customer by offering the chance to activate that later, but the user acceptance isn’t that high. People feel that they paid double, which was not true, but I always say perception is reality. So that was the reason we stopped that.”
From a different perspective, some critics argue that BMW’s approach to heated seat subscriptions appears to be a case of “double-dipping.” The company initially ventured down this path as a means to cut production costs and streamline the manufacturing process, which seems like a reasonable strategy. However, what raises eyebrows is that these reduced production costs didn’t translate into lower Manufacturer’s Suggested Retail Prices (MSRPs) for buyers. Customers ended up indirectly paying for heated seats whether they wanted them or not.
Evolution in Subscription-Based Services of BMW
To make matters more contentious, BMW not only charged an additional fee for using a feature already integrated into the car but also implemented a subscription-based billing model for it. This decision seemed puzzling to some, as seat heating is a static hardware feature that doesn’t evolve or require ongoing improvements.
Customers voiced their discontent, and their concerns were entirely justified. It’s commendable that BMW ultimately heeded the public’s feedback, but it raises questions about whether the automaker’s board members truly comprehend the underlying reasons behind the initial outrage.
As we advance, BMW has outlined its commitment to continuing subscription-based services. However, there’s a notable shift in strategy – these subscriptions will be limited to software options exclusively, encompassing features like driver assistance and digital assistant services. This shift in focus is understandable and responsive to customer preferences.
Under the new approach, customers will have the flexibility to choose between two payment models. They can opt for a monthly subscription plan, providing a convenient pay-as-you-go model, or they can choose to make a single upfront payment for access to these software capabilities. This flexibility in payment options is a positive step in catering to the diverse needs and preferences of BMW’s customer base.
Perhaps the most reassuring aspect of this decision is that BMW seems to have learned from its past mistakes. The automaker has stated its intention to step away from any hardware-based subscriptions, at least for the foreseeable future. This shift away from hardware subscriptions reflects a willingness to listen to customers and adapt to their demands.
