Opinion: Customer Experience Needs to Be a Car Dealership Differentiator

By Dennis Ephlin Global Leader, Auto CoE: Customer Engagement & Digital Transformation at IBM.

Tom Knighton said it best,

Customer experience is the next competitive battleground Tom Knighton

Customer Experience, the term is everywhere in business and even in society now. As with many business practice movements, the term has been misused and misrepresented. Over the past few decades, the business has used and practiced the art of Customer Satisfaction, Customer Relationship Management (CRM), Customers for Life, Customer is King, and even more mantras. They have all been attempts to put the focus on the customer. But they often based those concepts on technology or a belief that there were tools that make this happen for a business.

Customer Experience (CX) is not the same as Customer Satisfaction. Customer Experience is an emotional attachment and value that the customer owns. I would explain it using something we all understand. Ever have a meal and say “that was satisfying”? Simply asking this to yourself meets basic criteria but does not create a lasting memory. Now if you have ever gone out to eat, no matter how typical or fancy the restaurant and had a great table, fun company, excellent service, fantastic food, tasty beverages and overall enjoyed the event, that becomes an EXPERIENCE. You will likely continue to talk about it and treasure the experience, not just the food.

What is CX Really?

I would also push the concept further that Customer Experience is not the new business practice, technology, department, or business function we simply build. In fact, Customer Experience is not something we as an industry own at all – it is also personalized and individualistic. The customer owns it. The customer experience is what they think, feel, and believe they experience as a holistic interaction. We as a business can merely build and align the business processes, technology platforms, channels, training, and metrics against a good customer experience. We must do it one customer and one experience at a time. We need to stop measuring and driving the industry on a transaction-focused Customer Satisfaction score. We must begin to really understand, align and deliver against personalized customer expectations and needs to deliver a holistic experience.

The Industry Issue

In auto retailing, it is true that all the horror stories of the past and the bad image perception have scarred the current thinking about buying and servicing a car. Perception is reality. You will often hear people get excited about the prospect of the new car, followed by a sigh that they have to make a trip to “the dealer.” In recent research, it has been conveyed that the Millennial generation would in fact rather go to the dentist than visit a dealership. According to several Consumer Reports articles, the main dissatisfiers with the retail process (despite vast improvements) continue to be:

  • The sales representative made the experience a challenging and unhappy one
  • The F&I process was too time-consuming, wasteful and confusing
  • Getting the run around on the phone
  • Not being able to match an offer or vehicle to a real deal
  • All the haggling
  • Lack of visibility, transparency, and trust
  • All the “back-and-forth” and time wasted
  • Not concerned about the customer needs

Now, compare that with experiences we have all had in other industries. The pandemic itself has highlighted and accelerated the ability of many businesses and industries to become more customer experience-driven. Many are offering curbside pick-up and drop off, mobile delivery, omnichannel access, more virtual agents and self-help options, and more personalization to suit the customer needs.

I always like to share one simple CX example from an industry we can all relate to in our lives – pizza delivery. For a $5 pizza order from Domino’s or almost any pizza chain for that matter, you begin a customer experience journey.  The full experience can include:

  • Order through multiple channels
  • Recognized by your name, an account ID, or your phone number as a previous or new customer
  • Able to repeat a previous order with one swipe
  • Given the ability to track your order through multiple devices
  • Receive order updates
  • Ability to change or add to your order up to the departure of the delivery
  • Notified when your driver is on your street or in your driveway
  • Delivered within 30 minutes, as promised in the majority of cases
  • Given a discount or earn loyalty points for your order in many cases
  • Asked (surveyed) after delivery about your experience. Not the pizza, the experience.
  • In some cities, the delivery is being tested with an autonomous delivery vehicle, or to a hot spot or mobile delivery spot of your choice

All of this for a $5 pizza. At IBM we have a saying, “The last best experience you have, in any industry, becomes your standard going forward across all industries.” So we all carry these experiences and increased expectations from recent events and business service levels into the auto retail environment. The stakes have now been raised even further for auto retailing.

So Why is CX So Important?

In my last article, I wrote about the possible future outlook of 2030 in the industry and auto retailing. The fact is that it is quite unknown. Will retailers become less relevant? How will the service and parts business be sustainable in the current footprint with more electric and autonomous vehicles in the sales mix? What will be the new car sales levels in the next few years with the pandemic effect and more at-home workers (less commuting)?

These are unknowns but the constant for the industry or at least the shifting of the industry from new car vehicle transactions to a mobility enabler will be the customer. Traditional new car sales will not sustain the industry forever. The customers will. Customer expectations and customer needs will continue to shift, but we must adapt and be the provider of the experience. If you follow the customers, you will follow the revenue and profits. Their needs and their journey are what the industry will transform around. Auto retailers must build and become a “Customer Network Platform” for mobility, providing access, services, and experiences… whatever they may be. An engagement, a bond, and connection must be fortified between retailers and customers to transform together and not focus on the product, or the transaction, but on the delivery of a mobility experience. That will secure the sustainability of a retailer in the future.

As mentioned in the opening quote by Tom Knighton, “Customer Experience is the next competitive battleground.” Businesses who deliver upon an experience will find the right products, services, and value bundles to offer and deliver to customers. The customers value the experience and they will drive their needs into the industry, or others will come in and deliver upon it.

Five Action Steps to Take Now

I don’t want to paint a total doom and gloom picture here. Many retailers have taken great strides to improve customer processes, customer engagement, and the overall experience. Much work has been done by many to improve system integration and data availability to help support a holistic customer experience. More focus has been placed on this issue and that is a good thing.

Here are 5 areas I suggest be constantly focused on to continuously improve and keep customer experience the driving mission in your business. The recommended actions are:

  1. One view of the customer
    Continue to integrate systems and data to have one single view of the customer. A service experience should not be a separate incident from a sales transaction or part purchase. It should be one single journey of that customer with personalized engagements along the way. Work to get one single source of truth of customer information across all channels, all departments, and all engagements.
  2. Focus on need, not the sale
    One of the major reasons customers are so dissatisfied with the sales and service process is the lack of understanding, empathy, and fulfillment of their actual needs. Customers are often not asked about their needs for a new car, or their needs around timing or availability of a service experience but are rather mandated their options. Don’t reward and measure metrics that only focus on transaction volume or transaction satisfaction. Make the customer experience the focus, the priority, and the mission.
  3. Channel Consistency and Information Access
    The customer process across any channel at any time should be one of consistency. Starting this process over and over each time they access a new channel or talk to a new person should not be part of the journey. The ability to quickly access information and find value is of utmost importance. Leverage virtual agents, chat functions, and self-help functions to assist customers to access what they need quickly and easily. Examples include service updates, price information, and inventory availability.
  4. Personalization
    Don’t lose sight as you begin building tools and capabilities to deliver customer experiences – they need to be adaptable to individuals. Each customer is unique and the focus should be on building and delivering capabilities that can adapt and personalize each and every experience. Customer recognition, customer-specific need fulfillment, and unique treatment will make each customer experience special. It keeps customers coming back, no matter the actual product or service of the future.
  5. Create “Wow” Factors
    Find, develop and deliver experiences that set your dealership apart. What will make your dealership relevant and differentiated from the rest? Become known for something special that you can “own” and deliver. A “wow” builds the overall experience.

The Customer Experience will be what defines the future of our industry. The product, the transaction, the specific service will matter less. Why will they come and do business at your dealership? It cannot just be because of price or product availability, it must be more holistic and meet the customer’s needs. Build and deliver a customer experience on each engagement, with each specific customer, over and over each time. This experience will define your dealership as being relevant and differentiating to a customer’s mobility needs. This experience will sustain your business through the unknowns of the future of the industry.

Source: Auto Retailers: Customer Experience Needs to Be Your Differentiator