Q&A: Nick Pudar On OnStar's Opps, Apps

OnStarGeneral Motors' OnStar security, communications, and navigation service has been moving away from its roots as an installed product only on new GM vehicles. Last August, the company introduced OnStar FMV ("for my vehicle") in Best Buy and elsewhere.

The telematics division also launched OnStar RemoteLink this year, a mobile application that appeared in its first iteration at the 2010 Consumer Electronics Show as an app for Chevy Volt. Chevrolet, Buick, GMC and Cadillac all introduced OnStar mobile apps this year.

Nick Pudar, VP, planning and business development for OnStar, speaks with Marketing Daily about some of OnStar's core virtues, challenges and opportunities.

Q: I would imagine that OnStar's main competition, broadly speaking, is smartphones, since most people can use their phones and Bluetooth in-vehicle technology to do some of the things -- navigation, communication -- that OnStar does. Is this a correct assumption?

A: There are all kinds of substitute products for just about anything you might want to do in any category of any product, so clearly one thing we hear frequently is that smartphones are substitutes for the kinds of things OnStar does.

While there's a spectrum of things you can do and would want to do with a smartphone, OnStar can't be matched when the situation is most urgent, and when safe operation of a vehicle and peace of mind are most critical. The convenience and one-touch live-help aspect of OnStar is something people depend and rely on.

Q: Do consumers understand the benefits of OnStar, or do they think they don't need it as long as they have a smartphone?

A: I would say there's good spectrum of understanding. The one thing we have is brand recognition, and brand presence and alignment around peace-of-mind services. That's very, very high. In terms of depth of understanding of the product and what it does, that does vary, so we continue to work on educating existing customers and new-vehicle intenders.

But again, brand recognition is extremely high, and we continue to build on that. We find that word of mouth helps because more and more it's very likely that someone you know has a compelling personal story to share, so this continues to move the needle in the right direction over time. It's never a job that is finished, though, so we keep at it.

Q: It sounds like safety and security will always be the OnStar differentiators, regardless of whatever technologies you add to the product.

A: It's a clear differentiator from the standpoint of our very robust execution for those services that matter the most to you when you need them the most. In terms of peoples' use of OnStar, I'd say the vast majority of the daily relevant interactions that customers have with it is our turn-by-turn navigation. It's very easy and intuitive, but everything is about peace of mind: safety capabilities; vehicle diagnostics -- having that peace of mind that your vehicle is in top condition; and the navigation space, and the way in which the customer interacts with a live person instead of having to deal with maps, or navigation screens, or thumbprint maps on smartphones. Even hands-free calling. The whole spectrum falls under the umbrella of peace of mind. We have found over the 15 years we have been in business that this resonates with people.

Q: How is the OnStar FMV product doing?

A: We aren't sharing performance numbers at this stage, but I can say it has been very steady and growing. I think we are in around 2,200 different retail locations right now, and about half are Best Buy at this stage, but that is growing and we are looking to expand the distribution points.

Q: What is OnStar looking at next in terms of expanding services?

A: There are a couple of companies with peer-to-peer car sharing that allows you to rent your personal vehicle to someone else. There's a company called RelayRides that offers an inventory and account management rental tool that does matchmaking. You become a member, and put your vehicle up for rent, defining when it's available. To participate, RelayRides will send you a kit that has to be installed in the vehicle so its location can be accessed for the renter. And later on, when the renter comes (once the background and license checks have been done), the keys are actually inside the car, which is locked. But through the company's service, she can send a remote signal to unlock the door and access the keys for the window of time you've agreed upon.

The peer-to-peer business model is very intriguing, it's really interesting, and it's growing. RelayRides has a pretty broad base of customers already in San Francisco where they are piloting. They will go much more national launch, and the intriguing thing -- and some of the friction -- is having to put this hardware in your vehicle. Well, it turns out that existing OnStar in vehicles makes that process potentially very easy. We have a relationship with RelayRides so a customer who owns a vehicle with OnStar and an active account can give the company access to OnStar. And RelayRides will be integrating into their mobile app some of the OnStar functionality.

Q: So the car owner doesn't have to get extra gear…

A: You don't have to put expensive equipment in your car; as a matter of fact, your vehicle is ready to participate in the program immediately. We are looking at new, innovative ways in which customer service and other companies can leverage capabilities that OnStar-equipped vehicles have now. It will launch late first quarter in a more national launch, and GM Ventures, our venture capital arm, has made an investment in RelayRides and is looking at this as an early entry into urban mobility solutions. So OnStar is beginning to look at these kinds of opportunities.

Q: Where might OnStar go next in terms of more intelligent and intuitive in-car technology?

A: What I would tell you is that we are exploring what are the appropriate and relevant applications for this kind of intuitive inference of the driver's intention. One of the great examples -- just imagine getting in your car, getting a very, very pinpointed piece of traffic information, highly relevant to you -- and so that's something that's very important to me if I could have that. It would be like having my own personal concierge who is scouring the Internet, the radio, traffic reports, everything in real-time, and that person knows my schedule, my plans, what I'm thinking, and then tells me that one thing I need to know. I believe the technology that we have today makes things like that become more practical. It's easy, but we are experimenting.

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