In our first blog post, we highlighted the current status quo of CRM and took a glance into the future that will be characterized by a central unit within global CRM hubs, called the CRM Service Hub. Our second post investigated the combination of vehicle and customer data to create a true 360-degree customer view. This post will explore some of the ways that new trends are impacting CRM strategies.
Industry trends and changing Customer Behavior
Throughout all industries, consumers have become used to customer-centric business models and convenient buying processes. In the automotive industry, there is a growing demand for an enhanced, convenient online-offline sales journey that matches the buying expectations and service standards of other industries. However, the traditional three-tier sales model does not fully meet these customer demands and therefore the automotive industry is shifting towards agency sales models. Besides shifting sales models, further revenue streams are being explored and established. The automotive industry increasingly offers additional services, such as functions on demand (FoD). Furthermore, evolving consumer preferences – away from ownership to usage – are served by new, alternative mobility models such as subscription or sharing.
New sales models, services on demand and additional mobility offers reshape existing customer journeys and touchpoints. This poses great challenges for CRM, but also offers enormous opportunities.
Shifting responsibilities & Customer Journey Revolution – Implication for CRM
These outlined developments indicate a pivot for both vehicle sales and vehicle usage. In other words: the automotive customer journey is radically transforming.
With agency sales, the OEM becomes the owner of a larger part of the customer journey and thereby also for CRM. It is no longer just about generating awareness and supporting customers during the communication phase with generic product information. Within agency sales models OEMs need to steer and manage customers in the purchase phase, keep interacting during the usage phase and initiate retention.
Retail remains a very important touchpoint, however the responsibility for CRM and the data ownership successively shifts from retail to wholesale. In order to engage, manage and steer the customer along the online-offline journey, a uniform CRM becomes essential for the success of direct sales and overall agency sales operation models. Therefore, the OEM needs to establish or reshape CRM processes, map the processes to an integrated CRM system and set up an operational model, such as CRM as a Service, or as we call it, a CRM Service Hub. These CRM Service Hubs will receive customer data, analyze that data, and provide the customer management with actionable insights to enhance customer relationships.
Raising importance of subscription models and other described changes in the vehicle usage result in many further touchpoints, a diversification of the customer journey and a less self-evident customer retention. In order to meet these changes, CRM in the automotive industry must be rethought, adapted and expanded. In other words, a retention campaign six months prior to a 36-month leasing contract will neither excite the customer nor meet the new expectations and requirements.
Challenges and Opportunities for Campaign Management with the increasing spread of subscription and sharing models
In the future, we expect a significant increase of new players entering the mobility market, such as new car manufacturers and providers of sharing and subscription models. This will result in an even fiercer battle for each customer’s attention and loyalty. Traditional OEMs therefore require a CRM that can drive fully personalized campaigns that stand out of the crowd by appealing exactly to individual preferences. While the major content of automotive campaigns is currently about vehicle sales and service, the future developments require a broader coverage of mobility offerings. Marketing communication of automakers will also need to address FoD and subscription or sharing offerings.
With a further establishment of social channels and in-car applications, the channels on which OEMs interact with users are expected to continuously rise. As we have described in our previous blog post, the integration of car data is an additional precious data source to expand the customer view.
This means that, on the one side, fewer physical touchpoints, minimized switching costs and rising turnovers make it more important than ever before to know one’s customers’ needs and address them. On the other side, it also means that there have never been more opportunities and touchpoints to collect valuable customer data and derive corresponding needs and preferences. The biggest challenges are to orchestrate the countless information with a clear CRM purpose, to keep the messages consistent across all available channels and not to overwhelm the customer. Thereby campaigns, such as movement pattern-based early extension offers for running subscriptions, or even the immediate offer of additional functions, such as adjustments of light settings when entering a left-hand drive country, become feasible.
In order to exploit this tremendous revenue and customer experience potentials, all existing and new data sources must be combined and underpinned by smart analytics so that immediate recommendations for suitable campaign content, appropriate channels and windows of opportunity can be derived. The key to achieving this lies primarily in the appropriate application of artificial intelligence. Once data sources have been integrated, embedded AI will enable automakers to know their customers better, inspire and keep them.
New sales models & mobility offers force OEMs to rethink their Lead Management and make use of the customer data treasure
The previously described shift towards new sales models, such as direct sales, also brings a change in lead management responsibilities along the customer journey.
OEMs have a more direct interaction with their customers and need to cover a larger part of the lead management process. This naturally brings OEMs much closer to their customers and allows them to generate more data and insights.
Additional channels and touchpoints provide great potentials to capture leads and data. Thereby in the future of automotive sales, leads do not result from interests in vehicle purchases alone. With subscription models and functions on demand, the capturing sources multiply, the inbound cadence is shortened and the amount of leads increases tremendously. In order not to miss out on valuable sales opportunities in light of frequently incoming leads, Lead Management processes must be automated. This means, for instance, that lead data needs to be automatically enriched and qualified in a central CRM Service Hub, that leads need to be automatically assigned to the most appropriate processor and that each lead needs to be equipped with Next Best Actions and Next Best Offers to directly suggest an appropriate consumption model, such as subscription, financing, etc.
Laying the foundation early is key to success
In order to prepare for the upcoming challenges and fully exploit opportunities, it is not enough to tick off the basics, such as a sharp CRM strategy, integrated CRM processes, an intelligent CRM system and sufficient operation models. To make use of the tremendous amount of data for campaigns and leads, and also for case management, we recommend five keys to success:
INCENTIVIZE BY TRANSPARENCY: Build end-customers’ willingness to share data by increasing transparency in data use and incentivizing consumer trust and adoption.
CONSENT MANAGEMENT: Set up a resilient consent structure to centrally collect, store and make use of customer, vehicle usage and contract data.
ARTIFICIAL INTELLIGENCE: Manage complexity by setting up an AI-based technology early, before getting overwhelmed with data in the future.
CRM SERVICE HUB: Establish a CRM Service Hub – as outlined in the first blog post – to combine and process data centrally, and to be able to apply smart analytics to personalize communication and offerings.
INTEGRATION OF PARTNERS: Include all relevant partners, such as agents, as early as possible into your CRM ecosystem to ensure seamless data exchange and collaboration.
This blog was co-authored by Thomas Ulbrich, Malte Völkoi and Christopher Rose. Watch out for our fourth blog, where we will examine how OEMs can sustainably retain customers by next generation loyalty programs. Please get in touch if you have questions or need further information. We look forward to exchanging ideas on this particularly current topic.
Director, Customer Transformation, Capgemini Invent
Manager, Customer Transformation, Capgemini Invent
Senior Consultant, Customer Transformation, Capgemini Invent