Reinventing the customer experience

Top five tips for automakers and dealers

  • Share

Australia's automotive retail market is among the world’s most competitive, with over 60 brands in the market. With access to a wide range of quality vehicles and brands, customers are buying more cars than ever before. It's a thriving industry – but one that's ripe for disruption.

To succeed in a world of rapid technological change and shifting customer expectations, automakers and their dealers will need to retire old ways of working and unite around a new customer-centric approach. Organisations who achieve this model will likely overtake their competitors in the long-term.

Although thinking has begun to shift, a product-driven approach still prevails in Australian automotive retail. Automakers and dealers favour short-term wins, sometimes working against each other to achieve them. Without a clear, overarching strategy as a foundation, incentives for automakers, dealerships and sales staff are misaligned and increasingly difficult to administer – and do little to motivate the behaviours that drive customer loyalty in the long term.

State of play: Australian automotive retail market

Technological innovation and shifting customer expectations and behaviours are transforming the landscape, and automotive retail now needs to adapt.

Electrification, connected cars and the emergence and growth of car-sharing are changing ideas and attitudes about personal mobility and remaking the relationship between people and the vehicles they own and use.

Customers are also changing the way they buy. They're making fewer visits to dealerships, instead taking their research online and, often, making decisions about what to purchase before setting foot in the showroom. With grey imports looming on the horizon, Australian customers will soon have new opportunities to bypass dealerships altogether. All of these changes raise the stakes for dealers, who may only have one chance to make the right impression with the customer.

What should automakers and dealers be doing now to make this shift?

In an environment of intense competition and rapid change, the automakers and dealers that prosper will be those that perfect the shift from a product-driven to a customer-centric approach. Automakers are awakening to the realisation that to stay relevant, they must differentiate their brands by crafting customer experiences that generate loyalty – rather than focusing on volume to the detriment of the customer relationship.

Automakers can begin the shift by designing a rich and engaging brand experience that's integrated across digital channels, reinforced in the dealership and sustained throughout the customer's ownership. In turn, the data generated at each touchpoint can be harnessed to improve and tailor the future customer experience.

For dealers, the central challenge is to build trust with customers.

Car buyers are no longer willing to accept an adversarial head-to-head negotiation with sales staff. They expect both a good deal and a good experience – and if they don't get it, they will go elsewhere.

However, because a good experience is different for different customers – even when they buy the same vehicle – dealers also need to leverage the data to craft propositions that speak to customers as individuals.

5 steps to shared success – a cascading balanced scorecard approach

Automakers and dealers that broaden their strategy beyond an exclusive focus on sales volume will find that the effort spent building a better customer experience and a relationship of trust pays dividends when the customer comes to buy their next car – and decides to remain loyal to the brand.

To stand-out from the crowd, the customer experience, automakers and their dealership networks will need to articulate and unite around a coherent strategy. By identifying the concerns that are common to both – like retaining experienced sales staff and creating a rich and consistent brand experience – they can establish shared objectives and the metrics to measure progress. Replacing legacy incentives with a strategically aligned and clear incentive structure will be critical to success.

Progress demands concerted effort, but once automakers and dealers are working towards the same goals within a shared risk and reward framework, fulfilling the overall brand strategy means that the whole network wins.

Five tips for success:

  1. Develop individual automaker and dealership strategies for achieving customer, financial, process and innovation objectives.
  2. Come together to identify the shared objectives in each area creating a joint strategy map that incorporates the issues that matter to automakers and dealers alike.
  3. Design a cascading set of KPIs linked to shared objectives and aligned for the automaker, dealership group, individual dealerships and the sales staff within them.
  4. Match KPIs to a simple, transparent incentive structure to encourage the behaviours that foster customer loyalty and joint success.
  5. Form an alliance team to monitor progress and refresh the approach over time.