Manufacturers hold a clear advantage over "upstarts" in the race to monetize customer data, Ford CEO Jim Hackett told Freakonomics Radio podcast host Stephen Dubner.
Released on Nov. 8, "Can an Industrial Giant Become a Tech Darling?" is part of a series on "The Secret Life of CEOs" and is available at the Freakonomics website and through podcast providers.
The conversation touched on a number of topics, including the effects of a trade war ("The winning state is a state of equilibrium, not a constant fight," Hackett said) and the mass-marketing of autonomous vehicles, for which Hackett proffered the term "self-driving system" or "SDS."
"Because autonomous is a little too scary," Dubner asked.
"I think so," Hackett said. "And you know — I call it, it's not human-centered. You know, it's making the vehicle the celebrant, and we want the people inside."
Knowing the data those people generate can be of great value to factories, Hackett said the vehicles themselves are the key to monetization.
"We have 100 million people in vehicles today, that are sitting in Ford blue-oval vehicles," Hackett said. "That's the case for monetizing opportunity versus an upstart who maybe has, I don't know, what, they got 120 or 200,000 vehicles in place now. And so just compare the two stacks. Which one would you like to have the data from?"
"I hear you entirely," Dubner said. "But I also think, 'Well, who are the companies that have been good at monetizing customer data?' And we can name them. There's Facebook, there's Google, etc. And have they already mastered or owned that market? So what makes you think that Ford can monetize that in any significant way, enough to invest in developing that whole scenario?"
"They don't own the healthcare data market," Hackett replied. "They are not controlling aviation data today, you know. Now let's let that just be an argument that says they're not everywhere. The issue in the vehicle, see, is: We already know and have data on our customers.
"By the way, we protect this securely; they trust us," he added. "We know what people make. How do we know that? It's because they borrow money from us. And when you ask somebody what they make, we know where they work, you know; we know if they're married. We know how long they've lived in their house, because these are all on the credit applications. We've never ever been challenged on how we use that. And that's the leverage we got here with the data."