Digital KPIs for the Automotive Industry of the Future

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Car companies are now moving further afield in their digital transformation journey, and are setting new metrics and goals to measure how successful they are in pursuit of their digital future. As a close observer of this growth trajectory, I have been particularly interested in understanding the digital key performance indicators (KPIs) they will adopt to test the effectiveness of their efforts.  Some of what I have learnt is summarised below.

Customer is Still King

The automotive industry needs digital KPIs across its value chain, both upstream and downstream. These are also required across all departments from supply chain management, R&D, production, and sales & marketing, to vehicle life cycle management.

To my mind, the killer KPI that OEMs have never tracked—and could never track in the past as they lacked access to vehicle drivers—is the Customer. This entity needs to be their No. 1 focus. Customer satisfaction, which was consistently identified as the most important management KPI in previous years (and has now been substituted by Net Promoter Score), will now organically transform into a more sophisticated metric. In this avatar, it will not be a single, monolithic KPI.  Instead, multiple customer-focused KPIs will offer more granular or nuanced insights into specific segments like customer spend or loyalty.

Another of my findings is that vehicle manufacturers’ goals for setting digital KPIs need to evolve in line with industry vision. In other words, their KPIs need to mirror a changing landscape: from current digital services to car-as-a-service and, from there, to mobility-as-a-service, in which the car becomes a part of a larger, multi-modal transport solution.  Eventually, KPIs will need to reflect the role of a car as an integrated element of connected living solutions. Such connected living KPIs will include elements like energy management solutions, in-vehicle media access, and connectivity to smart home devices like Alexa.

My research also shows that there need to be two types of KPIs:

1. Current (analogue) business practices that are optimised through digital infusion. This could take the form, for instance, of devising digital KPIs for existing finance or business operational metrics.
2. New digital functions and business models that create or require new capabilities and KPIs. For example, a connected car would mean that, as car companies move their sales online, they will need to embrace new digital KPIs like digital leads, or the conversion ratio of online inquiries into actual purchases.

With these two types of digital KPIs, it will be important to measure performance metrics that differentiate results between the new digital model vs the non-digital one.