The automotive industry is loosing revenue, yet it’s totally unnecessary

Pål Bakken - Senior Advisor Automotive April 18, 2019
dark-road

It’s time to take back the control of the customer

Did you know that three-quarters of the European consumers consider three or more brands before they purchase or lease a vehicle?

Today’s customers are smart, web savvy, and fickle as hell. They’re swimming in brand choices and it’s never been easier to switch companies. Customer experience (CX) is make or break for the automotive industry and it’s more crucial than ever that automakers and dealers retain their existing customers.

So what’s the solution and how can the automotive industry increase the customer lifetime value?

You need to invest more in CX and communication throughout the customer lifecycle, and to take back the control of your customer data.

According to McKinsey, companies that are leaders in CX achieve income growth of 5-10 percent and reduce costs by 15-25 percent within two to three years. CX is not only the buyer experience at the dealership. It’s the overall picture that is built up through every interaction. This doesn’t simply help customers feel more satisfied. There is significant money for you as a business to save, and to increase revenues throughout the customer lifecycle. But today, many automotives have limited success in creating additional sustainable revenue streams.

For example auto shoppers say that the customers’ maintenance and service experience is the No. 2 influencer of brand loyalty. But despite the fact that service is a key driver of loyalty, 1 in 3 car owners said they serviced their vehicles elsewhere.

How can the automotive industry build brand loyalty throughout the customer journey?

As an automotive company, you’ve most likely already spent enormous amount of money on new marketing technology, fine tuned customer journeys and hired agencies and consultants to develop strategies for customer communication. But what people often forget is that they need to keep the approach pretty simple. To retain more customers, I recommend you to focus on the following steps to succeed:

Step 1. Digitalisation across the supply chain – Take back control of your customer data!

The prerequisite for being able to communicate personalised and timely with customers is to have the right data. But many automotives have large gaps in their customer data, due to the complex ecosystem, making it difficult to deliver relevant communication throughout the customer journey. GDPR, more data and increasingly sophisticated connectivity across the supply chain have impacted the entire industry. The power of digitalisation is substantial. Managed, it can be a major source of competitive advantage. But if unmanaged, it’s a big risk. One way of taking control of your customer data is when you already have a dialogue going, for example in processes such as onboarding, service reminders or leasing renewals. (Click here to see an example of car leasing renewal)

Step 2. Communicate on the customer’s terms

As an automaker or dealer, it’s critical to evolve your messaging with your customers’ changing needs. Your customers are already receiving outstanding experiences from brands in other industries. So why should they settle for less with you?

Everyone talks about offering a personal service. To do that, you must listen harder, act faster and know your customer’s needs before they do. What is the fundamental of a good customer communication? It’s simple. Send the right message, through the right channel, at the right time, to simplify and serve your customers’ everyday lives. This also requires the latest marketing technology.

Here are my top tips on activities that are necessary to enchance CX and retain more customers:

Focus on the customer. Place greater focus on existing customers than new acquisitions. It’s easier, cheaper and more profitable to increase revenue from your existing customers. Sounds like a no brainer, but it’s not.

CX on top of the agenda. To succeed with customer-centricity you need to have the management on board and get the whole company to think and act with the customer’s perspective.

Sophisticated ways of communicating throughout the customer lifecycle. Its great that you’re communicating with your customers throughout the customer journey, but letters and emails are not sophisticated enough. It’s time to take the communication to the next level. Use the latest tech to enable interactivity, increase conversions and deliver outstanding service to your customers at key moments.

Be proactive. Make the everyday life easier for your customers. Be proactive in your communications and you will see immediate results in brand loyalty, efficiency and increase in up-sell/ cross-sell. When you communicate proactively, you answer questions before they’re asked and handle problems before they’re occur.

Be personal and scale. To be able to deliver personal communication you’ll need a way to scale up all the customer interactions in an automated way. With technology developing faster than ever, there’s now tech to make every customer feel like VIP. My recommendation is to start with a small project with the aim to improve a specific moment in the customer journey. Measure the success and optimise. Once that works, scale.

Best of Luck!