Automotive OEMs’ plans to create an ‘Apple-style’ customer purchase experience have, so far, been largely unsuccessful. A single price with no negotiation may appear customer-centric but the actual vehicle research, buying and ownership experience is far more than this. What is the optimal digital and physical customer journey? What is the best approach to positioning Part Exchange, Financing, Insurance, EV specific products & services, Accessories, Vehicle Servicing, Warranty and Maintenance packages? How does an OEM segway from high level brand-building, to creating a powerful direct consumer relationship that extends from initial interest, to true brand loyalty?
Irrespective of whether the go-to-market model is Traditional Franchise, Agency, or something else entirely, the biggest problem is that many OEMs fail to understand the complexities associated with customer purchase and ownership journeys. If confidence in the market is to be rebuilt, the current confusing and inconsistent approach must change.
David Cumberbatch, Associate Partner – Customer Experience at MHP Consulting UK explains why a better understanding of prospect & customer behaviours and personas is vital if OEMs are to create a go-to-market model that truly delivers a consistent, high quality customer lifetime experience...
Stalled Strategies
Consumer attitudes to car ownership have changed radically in recent years, yet questions continue to be raised about the Automotive OEMs’ response. From buying journeys to financing, online research to physical test drives and, of course, the diverse perceptions of EVs, the end-to-end car purchasing experience is complex and nuanced. As a result, planned shifts in go-to-market (GtM) strategies have stalled with moves to an Agency Operating Model being postponed by several Manufacturers.
A few OEMs have pushed ahead with Agency transitions only to encounter challenges, whilst other new entrants have launched with a full Agency model in multiple markets, unincumbered by a legacy GtM construct. With some Manufacturers now reverting to a long-term commitment to Dealerships, the market is in a state of flux. The onus is on the industry to simplify and streamline car buying and ownership by delivering a consistent, high-level experience. OEMs should be inspiring confidence in new vehicles and leveraging the quality of the entire customer experience to reinforce brand value.
Complex Dealership Customer Relationships
So, what is going wrong? The long-discussed shift from traditional Dealership to Agency model makes sense at a high level for both OEMs and consumers. With direct access to the customer, an OEM can, in theory, create a new level of control over the entire process. Many now realise that the importance of controlling customer data is vital when it comes to the delivery of seamless, frictionless interactions. In addition, by providing a single vehicle price, the OEM eradicates the need for daunting and time-consuming negotiation with one or multiple dealers, transforming the customer experience.
The reality, however, has proved extremely different. OEMs do not have the same level of experience as Dealers in building, maintaining and managing a direct customer relationship – something that is very different to high level brand strategy. Some have poor insight with regards the level of demand creation undertaken every day by Dealership networks, the on-going reinforcement of relationships that occur through servicing & repairs or the very real challenges of working in a retail environment.
Some OEMs also lack insight into the financial complexities facing Dealerships under the traditional Franchise model. OEMs are only now discovering the complex and multi-layered nature of the Dealer: customer relationship. The shift to Agency and /or direct is far from straightforward – and without access to the right expertise, OEMs will struggle to build a GtM model that is truly customer-centric.
Prioritise Customer Experience
At a time of unparalleled change and disruption, the importance of concentrating on how every interaction can support both current and potential future customers is key. There is nuance to delivering a consistent customer experience; it can be delivered in a variety of ways that don’t necessitate a ‘one size fits all’ GtM approach. Every Brand has its own idiosyncrasies and appeals to different customers with varying expectations. In addition, many are coming from very different legacy situations – unlike new market entrants with the luxury of a clean slate – and this must play a part in determining the best approach for the OEM.
The priority should be to attain a far better understanding of customers’ buying behaviours and how these have evolved. OEMs need to invest time in the understanding of both digital & physical behaviours of their prospects. Where are customers seeking out information to help them make informed decisions? What are the frustrations inherent in this process and how can points of friction be engineered out? Where are the obvious or hidden pain points that need to be removed to deliver a better, more coherent prospect experience? How can data be best utilised to engage, personalise and tailor the journey? Perhaps as, if not more, importantly, what is the existing systems landscape in place (across both Dealer Network and OEM) and can it effectively support the delivery of the experience vision an organisation is striving for – irrespective of GtM approach? Thought must also be given to consumer demand for choice – ever present in their general retail engagements.
Mapping Journeys & Customer Personas
To create the optimal customer experience, it is vital to map the end-to-end journey, remembering that it is non-linear, omni-channel in nature and likely to involve multiple stakeholders interacting with the customer. At each touchpoint it is vital to understand who is responsible for delivery – something that will change across the different GtM models. The activity needs also to consider different customer personas and how they want to interact with a brand. As an example, the journey of an EV sceptic is different to that of an early adopter – the information each persona is looking for; the content they are served; and the acknowledgement of their personal situation through a tailored experience that resonates with them specifically is key. Only by highlighting the gaps, pain points and opportunities can OEMs begin to design the best solution.
It is also essential to consider the customer experience beyond initial vehicle sale. The ‘sell and forget’ approach – pushing customers down the sales funnel to purchase and then largely ignoring them until the sales push starts again – is not good enough. We are seeing an evolution in car ownership models and the onus is on OEMs to transform their approach and think about customer lifetime value in a far more careful and considered manner. It is only once the entire customer journey has been mapped and understood and different personas identified that an OEM can truly determine the best way to deliver the optimal end-to-end customer experience – be it a traditional Franchise model, via an Agency approach or even Direct.
Conclusion
The car buying experience should be positive, even uplifting – after all, it is typically an individual’s second biggest lifetime purchase. Yet today, far too many consumers feel lost and confused – the strategy may be to deliver an optimal customer experience but a lack of understanding of the complexity of car buying and vehicle ownership means that it is far from a reality for most consumers.
With vehicles becoming ever more homogenised, customer experience is now at the heart of brand differentiation. The onus is on OEMs to create a seamless, frictionless route to market and, by doing so, leverage the opportunity to reinforce a strong brand experience. This can only be achieved by mapping customer expectations to design and then deliver the best go to market strategy.
