Reimagining automotive customer experience in the post-COVID world
18 Aug 2020

Automotive Customer Experience is undergoing a paradigm shift at all stages from information and brand discovery to purchasing and after-sales. Traditionally, Customer Experience had been primarily driven by core product and features of the vehicle, but the rise of digital technologies provide new avenues for OEMs and auto dealers to address pain points, increase personalization, deepen customer engagement and win on the competitive battlefield. Penetration of digital technologies are increasing at a rapid pace due to COVID-19 related movement restriction and purchase behavior change.

The typical Automobile customer journey can be broken in four broad phases. First is information and product discovery, second is a contact that includes dealership visit and test drive, third is a purchase, and fourth is post-purchase including repair and maintenance. The duration and involvement of the customer across each of these phases depend on an individual’s affinity for cars, ticket size, and available medium to engage digital media. In the exhibit below by PGA Labs Research, we can see the various customer pain points across touchpoints and how digital technologies are helping solve these.

Exhibit 1: How digital reduced pain across customer touchpoints

Phase 1: Information and discovery

Vehicle purchase is one of the large financial purchases for most individuals and customers often research deeply while shortlisting. A recent survey indicated that over half of car purchases are digitally influenced, meaning the buyers browse for information over the internet, on platforms such as social media, car comparison platforms, and company websites.

The quantity and quality of information on automotive products is not a challenge in today’s digitalized world, rather the problem is the abundance of unstructured information and the lack of personalization and expert guidance in vehicle discovery. Platforms are evolving to provide a one-stop tailored solution and concise information personalized to individual needs. Such platforms can also connect potential customers to existing buyers of the model to address specific queries and get feedback on products via reviews and contacts. Under such a system, users can have feedback on what is most relevant to them from customers that have similar expectations and match their behavior. Further, these platforms can be integrated with the dealer network and the OEMs to generate leads.

OEMs can engage customers on interactive mobile applications and websites that allow customers to explore products using VR and AR technologies and customers can provide their preferences. OEMs need to deploy targeted marketing activities to identify potential customers and need to have strong visibility on social media and search. Personalization can further be increased by understanding mobility preferences deriving from the digital footprint from other apps such as navigation and ride-hailing services.

Phase 2: Contact

Most dealerships today limit their outreach activities to traditional methods such as bulk SMS, print and banner ads, database calls, etc. which have little to no personalization. The majority of customer walk-ins are cold in the sense that dealers do not have information regarding the preferences of the customer in advance and this often leads to friction for customers. Customers often fear sales pushiness and worry that they are being sold that might not be best for them.

Digital provides promising solutions to dealerships to address these pain points. It can help identify the right customers at the right time and provide them with the right information that is tailored for them. Apart from vehicle platforms mentioned earlier that can provide relevant information on customers’ preferences, dealerships can leverage targeted social media advertising based on demographics, online behavior, etc. Taking customers from seeing ads on the web to the manufacturer’s website to confirming appointments with a local dealer can be achieved in minutes. Information regarding customer preference can enable sales staff to become customer experts as they would be aware of customer’s preferences and can provide customers with products that suit them the best.

Dealerships can better interact with their customers even before they visit the dealership and understand their needs and build trust, they can offer virtual reality or 3D projections of a personalized catalog of select models rather than sharing brochures with a long list of all cars. Customers can be given the option to explore and interact with various features and configurations. The catalogs can be made live to reflect the configurations selected by the customer at the dealership. Thus, digital provides a great opportunity for dealerships and OEMs to identify and connect with customers, knowing their specific needs, and building strong relationships with them. As per the exhibit below by our market research wing, PGA Labs, digital and on-ground mediums generate maximum leads for car dealers and shows trends for all mediums used.

Exhibit 2: Digital and on-ground media generate maximum leads for car dealers

Phase 3: Purchase

For most people, arriving at a final purchase decision, deal negotiation and contract signing is a rather exhausting and painful process. Firstly, the decision is huge from a financial standpoint and involves a lot of paperwork. In this phase, it is important that customers feel comfortable and in control. They need to be provided with a stress-free and non-judgemental environment and must be guided and informed in detail about the contractual terms and the various fees associated and all their questions need to be answered without delay. The process can be made more suited to customer sentiments by using digital media such as sending interactive quotes for the combination of features including add-ons like finance and service bundling packages, as well as contract and legal documents that can be accessed by the customer at will. Customers can be provided with a chat support service to address any further queries as they need time and space to make the decision. All these measures make the customer feel comfortable and in control of their purchase decision and eliminate any stress.

After the purchase has been made, handover of the vehicle may take anywhere from a day to 2-3 months depending on the car production cycle, distribution strategy, and administrative process. During this period, customers often complain about a lack of proactive communication from the dealership about the status of the delivery which can be frustrating given that it is such a major expense. Digital can help dealerships and OEMs to use this time as an opportunity to address these pain points as well as acquaint the customer with all the features of their brand-new car. Customers can be provided with a tracking interface where they can occasionally be provided with pictures and can check the real-time estimate of the handover date. This will support transparent, timely, and proactive communication. Further, this channel can be used to tune the car systems to customers’ profiles and preferences, which will become more prevalent as cars become increasingly connected. This will enable the creation of a highly personalized and enjoyable experience for the customer.

Phase 4: Post-purchase

Customers often feel disconnected from the dealerships after the purchase has been made. This may come due to poor follow-up on customer’s satisfaction with the purchase, lack of interest, or failure to identify new needs, and failing to interact with customers at further touchpoints. Also, there is low personalization of after-sales repairs and maintenance. Dealerships often use an untargeted approach of sending generic repair and maintenance invitations or newsletters. While visiting dealerships for repairs, staff often fail to recognize their existing customers due to this reactive approach towards after-sales services

As cars of the future become smarter and increasingly connected, digital will provide a way for proactive after-sales services. OEMs will be able to gather real-time information on the status of various parts of the car via smart sensors and IoT devices which will enable predictive maintenance. The information can be shared with dealerships and customers can be intimated when a repair is due. This will help bridge the gap currently existing in the after-sales services by making the process proactive. OEMs can equip their vehicles with online connectivity and in-vehicle info and entertainment systems. Additionally, OEMs can provide system/software updates with new features including integration with third-party telematics provider)over the network and collect user feedback to cater to the current and future needs of customers which will help build a continuous relationship.

Changing customer preference and competitive landscape require OEMs and dealerships to employ digitalization across all phases of the automobile journey. Digital provides opportunities to eliminate pain points, increase personalization, and deepen customer engagement. Companies need to invest to build data and analytics capabilities to enable this digital transformation to stay competitive and unlock the lifetime value (LTV) of their customers.

Authored by:

Sanjeev Garg, Practice Leader, Automotive

Aryaman Tandon, Practice Director, Automotive

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