Rarely have so many challenges come together at any one time for the automotive sector. Right now, the typical manufacturer is faced with charting a course through a number of emerging issues on multiple technical, behavioral, and regulatory fronts. The challenges include increasing digital adoption, tariffs, and global trade uncertainty, regulatory mandates regarding vehicle emissions, traffic congestion, ride-sharing apps, and shared ownership, as well as updating automotive manufacturing processes and production methods.
Examining the space further, we’ve identified specific disruptive forces taking hold in the auto industry:
The pressure for cost reduction and improved outcomes
Today, all areas of a company’s investment decision-making are considered “in play” and fair game for detailed impact analysis. All contributors to the bottom line—tangible and intangible—are now examined with a diligence once reserved for profitability as analysts seek to understand available funds and accompanying financial flexibility to make needed investments.
A changing product landscape
The rise in demand and popularity of electric vehicles—a potential precursor to the rise of autonomous vehicles—reflects the progress in new vehicle technology. It also is an answer to increased government restrictions on urban vehicle access, as well as environmental protections, emissions standards, and noise levels. These regulations are backed by taxes on non-compliant, older vehicles in contrast to subsidies and other tax incentives for new electric and hybrid vehicles (EV/HEVs). The effect is a rapid transition among consumers to electric vehicles or moving away from vehicle ownership altogether.
The accompanying rise of ride sharing, shared car scheme membership, and longer lease purchases has led to a drop in vehicle demand and reduction in the effective market for volume production. This makes new vehicle launches more important and impactful for a company’s survival. They must be done in a targeted, thoughtful way to have a positive impact.
Ownership models shift with the automotive ‘gig’ economy
City life is becoming more car-unfriendly with road “diets,” access restrictions, more pedestrians, and bicycle lane redesigns alongside low-emission tolls on central locations. Owners and prospective buyers are now required to navigate a maze of tax thresholds in their new car purchases. It is only natural that buyers are re-examining traditional ownership models and are instead turning to startup “gig” operators to provide “just in time” car-sharing and ride schemes.
In addition, the impact of new self-driving technologies will further divorce drivers from the “thrill” of driving, a central tenet of car ownership, and reinforce the logic of ride-sharing or shared ownership.
Customers want great experiences across all platforms and purchases
Automakers are jumping into the app game for a broad range of tasks, including customer service, remotely starting or unlocking doors, appointment setting at dealerships, and monitoring vehicle performance. These consumers see no distinction between using an app as a portal into their vehicle, the dealer network, or OEM customer service organization, even though to the business they are three distinct entities.
Organizations must adapt to support this omnichannel capability. The context of an interaction with a customer must now be preserved across all channels, from social through vehicle IoT data and app-based support. Failure to deliver any of these components risks the carmaker falling behind in engaging customers who are being targeted by competitors and rival technology apps.
4 ways to harness disruptive auto customer experiences
In the face of so many challenges, the customer experience is what will differentiate one auto brand from competitors. Features and designs can be copied and commoditized, but a strong relationship bond is tough to break, no matter how the industry changes.
The average consumer spends about 15 hours buying a new car, but as much as 50 hours having it serviced during the time of ownership, according to research from Cox Automotive. Strong relationships and loyalty can be built more effectively during the service phase of the customer lifecycle than just in the purchase phase.
As the industry shifts, we’ve highlighted four areas of CX where automakers and dealers can greatly influence customer relationships while keeping costs down: CX technology, analytics and measurement, associate empowerment, and proactive customer strategies.
1. Leverage the power of CX technology
In the European market CX software spending will increase from $34 billion in 2018 to $47 billion in 2022, according to IDC. How is all this CX technology being deployed? Initiatives such as integrated knowledge management or context-aware workflows link an OEM’s relevant back-end systems to support the provision of vehicles, service bookings, and access to dealer and supplier networks. These form a foundation which can be enriched by speech applications and automation to deliver more complex self-service knowledgebases and RPA chatbots for rapid enquiry and resolution of customer issues. Companies can achieve additional benefit by offering these services through apps with gamification strategies in place to drive uptake with less linear CX.
However, the launch of new technologies must always serve a business need and drive a delivered outcome and benefit. For example, bots can be an expensive asset if launched as a “Big Bang’” customer-facing solution. A less cumbersome and more impactful use of bots is to enable associate training first. This builds associate experience and tunes the bot’s system performance prior to the launch of the solution to customers.
The use of technology should follow a repeatable cycle of assessment, design, testing, deployment, and evaluation. This ensures any new design is fit for purpose and a proven “positive” for the customer at launch.
2. Move from reactive to proactive CX metrics
Data analytics around customer interactions are often limited to the assessment and reporting of operational effectiveness. Operational metrics measure efficiency, but not the quality of the customer experience. There is no insight into why customers contact a company or what might influence them to increase share of wallet.
A more profitable use of targeted analytics is to understand customer intent and propensity to remain a customer, buy future vehicles and services, or even recommend the brand to others.
Further, companies can get more predictive by deploying propensity models, measuring customer sentiment, or developing customer personas around common issues and needs. Machine learning and AI-enabled technology within customer systems may also be able to identify customer patterns across channels and business units to determine root causes of customer interactions that can be fixed. This will allow brands to prevent customers from contacting the company in the first place.
3. Empower associates to focus on meaningful experiences
Automation, RPA, and AI are emerging as ways to move customer interactions to a lower-cost model of customer engagement. Aligned with this shift, the human element of customer experience remains critical. It is important to alleviate pressures upon the existing associate community to encourage them to be at their best during customer interactions.
Most associates perform against metrics reflecting production-line values: average handle time, time to answer, average hold time, etc. This results in a high burn-out rate as associates wrestle against unrealistic expectations. In addition, success is often rewarded with additional volume-based tasks. In an industry where the longer tenures lead to higher associate retention, it is critical to move associates up the value curve into more challenging roles so they are inclined to stay and grow with the company.
We recommend empowering associates with targeted training and adaptive technology so they can confidently own the customer relationship and manage transactions from receipt to closure. A mix of product knowledge, technical acumen, and soft skills are needed to create the “super agent” of the future who can serve customers in multiple digital and traditional channels with empathy and expertise. Automation can be used for simple tasks so the associate is free to be more consultative with customers.
4. Anticipate customer needs to prioritize elements of successful CX
Enhanced use of data analytics will provide the foundation for the move to more focused and impactful customer initiatives. Create a new, layered view of the customer experience based on moments that matter to individual customers. By anticipating the reasons and timing of interactions, generated by known “triggers” or events within vehicle ownership (servicing, parts, recalls, etc.), automakers can deflect contacts to manage interactions more effectively and even prevent them from occurring with proactive outreach.
This ambitious approach to contact deflection can be aimed at reducing calls and moving toward digital channels and self-service. What’s more, moving to a proactive model of CX allows for economies of scale to be achieved.
A new service design for a new CX paradigm
In a changing world where every step (and misstep) is measured for cost impacts, a resource-intensive customer experience model raises alarm bells for management and investors in the automotive sector. Utilizing smaller groups of cost-effective resources in a “hi-lo” mix of agents and automation boosts loyalty and generates revenue. These rich digital and self-service solutions delivered according to customer needs and predicted by data analytics allow the organization to manage customer contact volumes through its lowest-cost channels.
By adding predictive insights as a multiplier, these can be anticipated and outbound contacts substituted with automated channels. This changes the customer experience dynamic, building customer confidence that their carmaker or dealer truly “knows them” and will always contact them when the time is right.
The aim must always be to free funds for investment and to build an aware, cost-conscious, right-sourced automotive strategy that can tackle changing market dynamics. The industry may be at the center of a perfect storm, but it has know-how to track its ferocity without harm and align itself on the right path for future success.
