Driving customer loyalty in the Automotive sector: time to step up a gear?

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Like many of us, I consider myself to be a fairly modern consumer. I make use of digital tools and channels to research, shop, and get service or support after my purchase. If I apply the findings of Capgemini’s Digital Shopper Relevancy Report here, we could say I am a ‘Rational Online Shopper’: comfortable with […]

Like many of us, I consider myself to be a fairly modern consumer. I make use of digital tools and channels to research, shop, and get service or support after my purchase. If I apply the findings of Capgemini’s Digital Shopper Relevancy Report here, we could say I am a ‘Rational Online Shopper’: comfortable with researching and transacting online, but by no means a ‘Digital Shopaholic’.

Source: Capgemini Digital Shopper Relevancy Report, 2012

The new normal
And just like many of us, when it comes to more frequent purchases like food, fashion and electronics, I have preferred brands and a choice of places to buy those brands online. But I might sometimes choose a different brand, depending on information like user ratings, functionality and features, compatibility and ease of purchase and delivery. Retailers know only too well that the purchase of a different brand from a different location is often just a swipe away, so they employ increasingly sophisticated strategies to attract our attention and foster loyalty online. In shopping terms, this is the new normal. However, I was struck recently by the disparity between shopping for everyday goods and making bigger, high-consideration purchases. For the automotive sector, it seems, that new normal hasn’t kicked in yet.

A new car is a big deal. We’re spending large sums of money and have high expectations for what we’ll get in return: comfort, longevity, security, even status. But the decision-making process is different: Most buyers already know the brand and type of car they want, often based on budget, brand image perceptions, reliability, and/or earlier brand experience. Where the consumer buys from will be mainly dependent on where they live. So, there are a lot of variables that can be predicted and managed by automotive dealers. In terms of delivering a seamless and consistent customer experience, you could say that a car dealer doesn’t need to invest much. Maybe those sophisticated attraction and loyalty strategies just don’t count here.

Service = loyalty
Have you spotted the pitfall? Not all automotive dealers have. We know that quality of service is the dominant factor in customer loyalty, and this goes beyond just the basics when it comes to cars. Even if decision-making varies from smaller purchase decision-making when we buy a car, our expectations about convenience and personalization of service do not. In my recent case, my car had a defect which would take several days to investigate and fix. I asked the dealer for a replacement car and was given one that I did not like at all—exactly what happened last time I needed a replacement. The result? One unhappy customer, for both brand and dealer.

But what if the automotive dealer had applied some of those sophisticated strategies employed by other retailers, though? The outcome could have been very different. Simply by using the data held about me, my stated preferences and my car, that dealer could not only have improved my experience as a customer, but have also clinched a sale.

Joining up the (data) dots is powerful
If my car dealer had used the information I’d provided previously in feedback questionnaires, they would have known where I work, how long I intended to drive my current car (my lease contract is ending within a couple of months), and what my next car will probably be. That would have allowed them to foresee that this would be the perfect opportunity to offer me a test drive in the car I intended to choose next, by way of a temporary replacement car. What better way to combine service with a sales opportunity? Not only that, but they’d have locked in my loyalty by anticipating my needs. Or enhancing my experience even further: my dealer could have brought the test drive car to the location I preferred, and picked up my own car for service.

In Capgemini’s recent report, Cars Online 2014, we explored how car buyers across the world approach the all-important decision-making process and find that when it comes to ‘Generation Connected’, information and flexibility is key—and that buyers want the same seamless digitally-enabled customer experience they have come to expect from everyday retailers online. But like me, most car buyers want the personal touch, too. 40% of survey respondents said that they’d like car dealers to deliver cars to them for a test drive. And it makes sense.

Source: Capgemini Cars Online 2014
Time to move up a gear
The lesson here is that while buying and decision-making patterns may vary depending on the product, some principles remain. Service and personalization build loyalty. Using data to join the dots and anticipate customer needs increases the chances of conversion. Even a service interaction can be a sales opportunity, if managed well. So perhaps for the automotive sector, it’s not so different after all. It looks like it’s time to move up a gear.

I’ll let you know the outcome of my story once I’ve made a decision about my next car.  Perhaps you have a story to share about the buying process and consumer expectations? I’d be interested to hear. And if you would like to know more about how Capgemini can help your organization improve the customer experience across all channels, regardless the sector you are in, feel free to contact me.

Now, here’s hoping my car dealer is reading this…

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