Data-driven CX for Automotive Brands
This post can be thought of as an ‘addendum’ to previous week’s Outside In post on ‘CX Beyond the Car – The Mercedes Way” here at:
The seed of this post was laid by the Accenture Customer Reboot report for the Automotive Industry that was used as a reference. One of the important insights that we uncovered while compiling The Mercedes Way article, was the use (or lack of use actually) of Data to shape and orchestrate superior Customer Experiences by carmakers. Outside In decided to pull harder at this thread and possibly uncover some quick Takeaways to deliver better CX… Let’s get our coffee…
Customer Expectations from Carmakers
Today’s (and tomorrow’s) customers are no longer looking at cars simply as a means to get from point A to point B. Vehicles are much more than a transportation mechanism—they are now an infotainment hub and workspace. Carmakers need to understand the wider span of customer’s expectations from them, which now include:
Vehicle Performance
Design and Configuration
Real-time Response
Data Privacy
Transparency
Loyalty
Cost (Management)
(Corporate) Responsibility
And these are the areas where there is satisfaction (or dissatisfaction, if we look at it with inverted lens) among car customers, according to the Accenture Customer Reboot report:
Carmakers seem to be offering a fragmented, and sometimes even irrelevant, brand experience causing multiple pain points across the customer lifecycle. Consumers are experiencing low engagement and satisfaction, particularly in the post-purchase stage. This disconnect and disengagement, among other issues, puts the entire sales model at risk for the automotive industry
Challenges for Automotive CX driven by Data
Most carmakers realize that they need to take a more Data-driven approach to shape CX across the customer journey, especially on Sales and After-sales Activities. To render superior CX, they need to solve for these challenges:
Different silos owning the customer data, creating a disconnect within the organization – including the dealer network
Minimal strategy and few platforms to collect, analyze and transform customer data into meaningful insights
Few organizational processes, management mechanisms and KPIs, to support the customer experience transformation
Many carmakers continue to adopt an incremental approach (launching yet another app or digital intervention), which often goes unappreciated by customers. In fact, close to half of customers do not use an app provided by their automotive company because they are usually designed largely to up-sell or provide features the customer finds extraneous
Aside from carmakers, their dealers face challenges of their own, including a lack of organizational processes or an inconsistent, outdated IT infrastructure – whereby they are unable to keep up the pace of a carmakers ‘digital transformation’ initiatives
“Many of these issues [have] more to do with organizational barriers than technical barriers. Technical hurdles can be more easily overcome than organizational constraints and siloed decision making.” — Head of Customer Relations and Sales, A major premium global Carmaker
“Even if the data is there, nobody is working on the analytics. We are far behind…other industries. We produce hardware, and we don’t think about other things until much, much later.”— General Manager
A major Japanese Carmaker
The problem at automotive organizations is that these companies are normally stacked with engineers and not business-oriented (read: customer-oriented) people.” — Head of Customer Relations & Sales Funnel Management, a European Carmaker
The biggest challenge we face is a lack of data strategy; data platforms and systems that are not well connected in our organization and to dealers. Moreover, there is no discernible ‘plan’—either presales or aftersales. The process is adhoc and not defined by strategy.”— General Manager, A major Japanese Carmaker
Cultivating a Data-driven Approach
The Sales Opportunity
Dealerships are building a seamless and appealing customer experience in the purchasing and post-purchasing periods—a complex process requiring close and seamless coordination with the carmakers
When buying a car, customers want a digital-first experience that combines the flexibility of virtual product interaction with the convenience of buying online and the personal consultancy of a dealer
Many traditional carmakers are piloting direct sales or setting up an agency model under the belief that they still remain the single driver for an appealing customer experience (like we saw for Mercedes in the previous edition of Outside In)
The Aftersale Opportunity
According to the Accenture Customer Reboot report, 71% of consumers would increase their annual spend on aftersales if the customer experience improved. This represents a $210 million annual service revenue opportunity for carmakers, not to mention potential revenues from decreased brand shifting and increased customer recommendations
Investments in Data-driven CX Programs
Carmakers are increasingly pursuing a customer-centric business model, by cultivating a 360-degree customer view. Quality data is only a starting point to derive real customer insights. A structured analysis and interpretation methodology should follow any data collection initiative. Also critical is a strong, overarching, companywide data management system and utilization strategy comprising the following elements:
1) Data Skills: The right talent and skill-sets working harmoniously across technology, sales and marketing with committed support from the C-suite. Check the kind of team structure and skills that Mercedes is nurturing, with their own Vision and Mission no less…
2) Powerful AI and Analytics Technologies to support Data Engineering: For instance, CRM is a must-have for a new CX, and some carmakers have been quite successful using AI technology to enhance their traditional CRM systems. Check the launch of Space Auto’s CRM Software launch with AI responses for Auto Dealerships – that tracks the entire customer journey from first click to close, and uses AI-generated responses to create personalized interactions for car shoppers – here at: https://www.globenewswire.com/news-release/2023/05/10/2665738/0/en/Space-Auto-Launches-Game-Changing-New-CRM-Software-With-AI-Responses-for-Auto-Dealerships.html
3) A flexible and scalable Platform: For example, a platform on a scalable cloud stack with an API strategy to integrate different data, thus allowing various departments and market units to address specific data utilization needs. Having an API strategy is important so as to not attempt to build everything into one system, but rather integrating different data via different interfaces, thus interconnecting different systems as well as possible
4) Ensure Data ‘Activation’: There is a usual disconnect between data ‘gathering’ and ‘activating’ the data for CX impact. Carmakers must ensure a merger of data from sales, aftersales, etc. which can help create the right interventions, for the right customers, at the right time, in the right channel for its customers. For instance, Holoride hopes to make every ride more interesting by combing real-time vehicle data with XR. From gaming to educational tours, Holoride harnesses the data and idleness at hand and transforms them into time well spent. Also, check the process adopted by Mercedes to identify data-driven use cases, integrating it with their business model, deploying them and measuring results below
5) Collect Only What You Need: Rather than gathering all customer information, limiting collection to the areas that facilitate the relationship can truly benefit the customer experience. When brands aren’t overly possessive with customer data, the exchange becomes natural. Overall, 80% of customers are fairly open to sharing car-related information such as maintenance, driving patterns and ownership. However, when it comes to sharing personal information, customers are relatively less open. Check the detailed graphic below
6) Redefine KPIs: One of the most critical pieces of revolutionizing the customer experience is redefining KPIs— from short-term financial KPIs to customer experience KPIs. Transform the front-office to a customer experience engine. Measure CX-focused targets: share of wallet, including the full value of money covering all business units, new car sales, repurchase from existing customers, financial services revenues, aftersales revenues, connected car revenues and other revenues, such as giveaways and events. Check Nissan’s efforts below
7) Loyalty and Engagement Strategy: Find potential and future customer value based on factors such as customer profiles, loyalty attrition risk and future value beyond cross-selling. Change the traditional customer segmentation and how it is calculated: create a customer engagement index (how much the customers interact and use OEMs’ and dealers’ services— similar to how the airline industry gauges miles per customer, calls per customer, etc.)
8) Build a Data Culture within the Organization – Check a Mercedes illustration (again) below
In Conclusion
This post represents an overarching trend in which carmakers are essentially organizing their entire business around delivering exceptional experiences to customers. They understand that these experiences must respond to customers’ new, typically unmet and frequently changing needs and enable them to meet their goals and desires
As carmakers seek to provide more multi-layered experiences, the customer- and vehicle-related data that’s generated, processed and transmitted in cars will rise dramatically. This also requires carmakers to embrace a more forward-looking software and data strategy. They can learn from companies such as Google and Apple by adopting the “customer value first” concept, turning data into experiences. They can also partner up across industries to create an open data strategy plan. While the past was about secrecy, the trend toward multiparty systems provides a shared data infrastructure to enhance trust, transparency and collaboration
Carmakers must rethink their entire ecosystem, particularly their relationship with dealers. And cohesively engaging customers across all touchpoints—physical and digital— also require an intelligent data-driven approach, including monitoring and analyzing information across the entire ecosystem.
As carmakers gather critical data that can lead to customer insights, they must also have the tools in place for structured analysis and interpretation, requiring comprehensive, robust data management systems and utilization strategies
References & Sources:
1) Accenture – Customer Reboot Report: https://www.accenture.com/_acnmedia/PDF-169/Accenture-Customer-Experience-Reboot.pdf
2) Mercedes Data & Analytics at Scale: https://www.slideshare.net/WalidMehanna/data-analytics-at-scale
3) Space Auto CRM with AI: https://www.globenewswire.com/news-release/2023/05/10/2665738/0/en/Space-Auto-Launches-Game-Changing-New-CRM-Software-With-AI-Responses-for-Auto-Dealerships.html