From advances in technology to changes in regulation and the growing innovation of competitors, it’s no exaggeration to say that the automotive industry is in the midst of a total transformation. And as legacy Original Equipment Manufacturers (OEMs) grapple with fluid market forces and making the switch from fossil fuels to electrification, they must be certain that these immediate challenges, though critical to overcome, do not allow them to lose sight of the one thing that should guarantee their future success — customer experience.
As competition from direct-to-customer (D2C) brands and digitally driven alternatives to car ownership mount, so do the opportunities for traditional automotive brands to make stronger connections with their customers, building brand loyalty and advocacy. However, to do so means understanding and correcting historical errors.
Put the customer in the driving seat
Historically, the automotive sector has failed to meet the high expectations of its customers. Buying a car is a big financial decision but the end-to-end customer experience doesn’t reflect the importance of the purchase. In many cases, the CX detracts from the car ownership experience.
To address this shortfall, OEMs need to create seamless, cohesive customer journeys that extend beyond the initial purchase. They should it simple for customers to receive ongoing support or access services at the moment they need it.
And as consumer expectations evolve, so should the industry’s approach to CX. OEMs need to actively collect and analyze data and customer feedback to identify areas for improvement and opportunities to increase conversion rates.
The importance of partnerships
In this respect, partnerships with dealerships and other stakeholders are essential. Working together is the only way to ensure a consistent and consistently positive CX over the lifetime of a customer relationship. It will also enable more efficient and comprehensive data collection and sharing that will benefit all parties.
Even if the path to automotive purchase now begins online for the majority of consumers, the physical dealership still plays a critical role in moving individuals from browsing to buying. And if all stakeholders are working together to achieve the same goals, this strategic advantage can be further leveraged while also ensuring that the analog elements of the path to purchase that are showing their age are digitized, automated or eliminated.
The difficulties of the D2C model
Even if they have access to a well-integrated dealership network, many legacy OEMs will find themselves drawn to the D2C sales model that is proving successful with a handful of new automotive brands. But much of the attraction comes from the perception that a 100% digital approach will significantly lower costs. And while there are efficiencies to be gained from using online marketplaces, going D2C demands significant investments in cultural and strategic change, not to mention logistics and distribution.
Changing market forces
But as well as new channels, the industry needs to adjust to new market realities. Economic, geopolitical, and regulatory changes are reshaping the automotive landscape, and this is forcing brands to diversify their approaches to sales and support. What was once a more homogenized market is becoming increasingly fragmented, requiring OEMs to tailor their strategies to regional customer needs.
As such, understanding local markets will be crucial for success as OEMs pivot toward digital services and recurring revenue models. By cultivating a deep understanding of regional customer personas and preferences, they can develop targeted campaigns that resonate with various demographics.
Plugging into EV customer concerns
Gaining these levels of insight and agility in order to serve different markets and expectations will be critical in successfully navigating the shift toward electrification. It’s only with insights and understanding that automotive brands can effectively support existing customers in their transition from gasoline to electricity and help them overcome common concerns around the potential limitations of EV ownership.
In this time of profound change, OEMs must embrace a customer-centric approach, leveraging data and partnerships to enhance customer experience. By doing so, they can meet current expectations and anticipate future needs, ensuring that their products and services remain relevant and competitive.
The automotive industry is going through the biggest change in its history. Read “Driving change: The best practice guide to CX in the automotive industry” and learn how to steer your brand towards future success.