Like it or not, we're living in a subscription-based society. You know,  Netflix, Apple...BMW?

That's right, the German automaker made headlines this week when some internet sleuths discovered that in a number of countries, including the United Kingdom and South Korea, BMW has begun charging for monthly access to features like heated seats. In other words, while the car may come equipped with the necessary hardware, new customers will need to to pay a subscription fee (or a larger one-time fee) to unlock features through software.

As customers take to social media to express outrage, business owners can take a major lesson from this debacle. That's because by stealthily introducing these features in various countries, BMW made a major mistake: It underestimated the emotional impact it would make, and the potential hit to its reputation.

This is a great case study in emotional intelligence, the ability to understand and manage emotions. Let's break it all down and see what companies everywhere can learn from it.

(If you find value in the lessons presented here, you might be interested in my emotional intelligence course, which includes 20 more rules that help you develop emotional intelligence in yourself or in your organization. Check out the course here.)

How bad is the subscription model?

Let's play devil's advocate for moment. Is a subscription model for cars really as bad as it sounds?

Let's say you live in an area that's warm all year round -- or, at least, that has really hot summers. If you're the type of person who only keeps a car for a few years, you might save money by subscribing to a feature like heated seats only when you need it.

Add to this the possibility that BMW could make the cost of unlocking the heated seats feature about the same -- or even less -- than it currently charges for that feature on the car. Then, customers could actually save money with the new model.

But how would such an arrangement benefit BMW, you might ask? After all, if it's spending to equip all cars with the same equipment even if some don't pay to use it, won't it lose money?

Possibly. On the other hand, the earnings from a subscription model could prove to be more profitable, considering that production processes could be made more efficient when all cars are made to the same specs.

As you can see, it's a bit more complex than it seems on the surface.

The emotional intelligence lesson here, though, is how BMW managed its rollout of these features.

Specifically, that it made these three mistakes:

BMW lost sight of its brand.

There are plenty of car buyers out there who are looking for ways to save every penny, and who might be willing to engage in a subscription model to do so. But those customers are typically looking for more budget-friendly cars, not BMWs.

In contrast, BMW is a luxury brand. Its target customer is looking for the "all-inclusive" feel. With this model, BMW is sending a message of nickel-and-diming customers, similar to a budget airline that charges for every meal and drink on a flight. But BMW customers are looking for first class.

A subscription for such basic features as heated seats risks sending potential -- and even loyal -- BMW customers running towards competitors.

BMW let others write the narrative.

Through a PR campaign or even a press release, BMW could have provided details on these features and explained how they could help customers save money, and that it would only move forward if test markets proved that the model made sense for both the consumer and the company. This would have allowed BMW to lessen the negative emotional impact of the story.

Instead, the carmaker introduced the new subscription model without fanfare. A press release from a couple of years ago did share a vague description of how the program would work, but it misses a major opportunity to control the narrative, allowing the media to do it instead.

BMW had horrible timing.

In most cases, car companies want to be innovators. But this is an example of how letting others lead the way can produce better results. That's because most customers hate change -- especially if that change results in a perceived loss of value for them.

However, the car industry is changing rapidly.

Tesla is leading the charge when it comes to subscription-based services. And the long-awaited "Apple Car" will expectedly have multiple subscription-based features, especially since Apple has staked its entire business model on subscription revenue over the past decade.

By simply playing the long game, BMW could have kept a subscription model as part of its future strategy while waiting to see how other automakers to show their hand first. If car service subscriptions do become commonplace, many customers still won't like the idea -- but they'll be more used to it than they are now.

The takeaway

So, what's the lesson for you and your business?

Remember that change management is all about exercising your emotional intelligence. So, before you introduce a radical change to your customers, ask yourself:

  1. Is the change worth it? How will it affect the emotional impact on my brand and reputation?
  2. How will customers react? If the reaction is negative, can I talk to them to learn what would soften the blow, through either communication or strategy?
  3. Is now the right time for this change?

Answer those questions right, and you can avoid repeating BMW's recent mistake. You'll be using emotional intelligence to manage change effectively, and make customers' emotions work for you, instead of against you.