How can OEMs and Retailers improve customer loyalty in an ever-changing landscape?

By next year, almost half of potential car buyers will have grown up as digital natives – using services such as Amazon, Uber and Netflix. They’re used to best-in-class digital customer experiences – which centre around truly personalised interactions between them and the brands they choose to build a relationship with.

?

In general, the automotive industry has not yet evolved at the same pace. The complex nature of the relationship between the OEM and the franchised dealer network, as well as the age-old battle of “who owns the customer data and in turn, the customer

relationship?” has meant that our sector has lagged behind others. These data siloes and challenges have led to an experience that often feels outdated and inferior for the consumer.

So how can OEMs and Retailers “change the game” together and start to close the gap between the car buying and servicing experience – and the other types of digital-first customer experiences the younger generations have come to expect in the rest of their lives?

?The answer lies in better use of data. The reason consumer tech brands are able to create truly personalised interactions is almost exclusively due to their incredible customer understanding through data – and then using that data to power 1:1 customer journeys throughout their entire relationship with that individual.

?

Let’s consider how this could be applied to the automotive retail industry.

?A great example of a customer experience disconnect that could be remedied by better use of data and more personal communication is vehicle servicing and repair.? This should be a highly personalised, routine and seamless experience. Communications should be timely, relevant and entirely specific to that unique customer, and their unique vehicle need either at that moment, or in the near future.

?However, for so many vehicle owners, this is still not their reality. The experience is often perceived as a hassle, full of mistrust and uncertainty, and involving a high cost and time commitment from the car owner. The hours that are spent booking the service, trying to understand pricing, waiting for updates about the vehicle status, or worse again, waiting for relevant parts to arrive and being told you will need to come back for another appointment, are endless opportunities for disappointment and frustration.

?Let’s be clear. This experience, could, and should, look very different. A better use of customer and vehicle data could transform this experience, delight car owners and in turn increase their loyalty. And it starts with creating a data strategy that is laser-focused on your customers.

?The first hurdle, however, is that there are potentially limitless disparate sources of data generation, from connected vehicle telematics, multiple-DMS, CRM data, OEM systems (such as recall and warranty) and of course, hundreds of approved third-party point solutions. And even within an OEM, departmental siloes can exist - each one potentially holding the key to unlocking a better customer experience – and yet perhaps unlikely to ever even meet the other.

?

Changing this status quo requires a centralised data platform that gathers all this disparate data together. This is step one of the process.

?Step two is acknowledging that creating a better customer data strategy is not just about collecting data; it's about standardising, cleansing and enriching that data, to create a solid foundation for customer communications.

?Once a centralised data platform is established, only then can it be used to power truly personalised, timely and relevant customer communications at scale, making car owners feel like their needs and preferences are understood and in turn greatly increasing the chance that they will choose a main franchised dealer for their service or repair.

?Step three is to increase transparency and build trust.

?With 71% of consumers reporting that they expect to see a detailed cost estimate at the time of booking[1], it’s surprising how rarely this is offered. But being price transparent is dependent on accurate, VIN-specific make and model data, which is so often disconnected from customer booking systems. Connecting these systems can remove one of the biggest consumer pain points in the service experience as it stands today – uncertainty around costs and the feeling that they may be asked to pay for more work than they really need.

?Step four is to harness the power of predictive AI for better parts and service forecasting.

?By having better data about what part a vehicle is likely to require (for example by combining connected car telematics and other relevant data sources), more parts could be pre-ordered, making sure your customers are not left waiting or asked to come back another day. Better forecasting could also improve service operations overall, resulting in not only an enhanced customer experience, but also increased aftersales efficiency.

?Step is to relentlessly analyse and optimise your customer retention statistics, across your entire network.

?You can’t improve what you can’t measure, so better data visibility on everything from customer satisfaction to service retention, at every single dealer site, is crucial to identifying issues and acting quickly to resolve them.

Remember also that customer retention can be enhanced by looking outside the traditional “up to four years old” vehicle owners most found in franchised dealerships. When your analytics data covers your entire tech ecosystem, it’s much easier to identify lost and lapsed customers who own older cars, and target them with highly personalised and relevant offers in order to win them back.

?

So, to summarise, creating a customer-centric data strategy is the single biggest change OEMs and Retailers can make to transform the aftersales customer experience. But why making this change has never been more important, or more urgent?

?This is because right now, there has never been a more pivotal or defining moment in the automotive industry. From ever-advancing software-defined vehicles, electrification, autonomous driving, the agency model, new market entrants and the growth of AI – there has never been so much dynamic change in such a short space of time. But one thing is certain, these forces have combined to create an unprecedented level of competition for both acquiring and retaining customers.

The majority of eyes are focused on the battleground of the in-car experience, better tech or infotainment, better features, better performance. And whilst no one can question that this is essential to “winning” the customer, “retaining” them is another matter.

?A disappointing ownership experience is a key driver for 1 in 2 customers to consider a new brand for their next vehicle purchase[2]. On average, a driver will spend 15 hours buying a car, but over 50 hours having it serviced during their ownership of the vehicle[3].

Yet three years later, when they come to look for their next car, the purchase experience will likely be a distant memory – but the reliability of the vehicle, their service and repair costs, their aftersales experience in general will absolutely be front of mind.

?So, to create genuine customer loyalty to your brand, the aftersales experience deserves just as much focus as the purchase and in-car experience. Whilst that may not be where we are today, it is most certainly where we need to be. ???

?As we move forward, let’s embrace the amazing opportunities presented by so many new technologies. Because together, we can create customer data strategies that not only drive both OEM and Retailer success, but also contribute to a more transparent, trusted, and customer-centric version of our entire industry.

?

?

?

[1] Bearing Point: Connected Aftersales - towards a new customer journey, 2022

[2] Accenture, a customer experience reboot, 2022

[3] McKinsey, Addressing Automotive Customer Experience, 2019