👉 Background: We all know BMW, the German multinational luxury car maker. This crew has been kickin’ since 1916, but its latest move shows it's definitely keeping up with the times.

👉  What happened: BMW is testing a new biz model in certain countries. Yep, it’ll now cost you to access your BMW’s heated seats. As if the price of a luxury BMW wasn't enough?!

👉 What else: BMW owners can choose between a monthly fee or an annual fee to access heated seats. Some customers reckon the extra fees are a cash-grab, but it’s all part of BMW’s long-term strategy of embracing recurring revenue.

What's the key learning?

💡 The auto industry is adapting to the 21st century by trying to become more like the tech and telco industries. They’re thinking: why just make money when you sell a car… when you could keep charging customers for services month after month?

💡 Chasing recurring revenue is generally a smart business strategy, but BMW risks alienating customers by restricting access to features they expect. And that’s because there’s a big difference between tech companies who offer software as a service and car companies who offer hardware.

💡For example, when you subscribe to the premium version of an app like Spotify, you’re also paying for continuous improvements. But paying for heated seats is very different because the hardware isn't getting any better. It will be interesting to see if car customers embrace this approach to subscriptions.

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