For the global automotive industry, innovation in the digital customer experience is just a short drive away.
The global auto industry has been threatened for some time by digital and tech-native disruptors like Tesla. But are traditional automakers about to lose the battle if they don’t accelerate digital innovation and focus on building a leading customer experience ecosystem?
I believe the massive overhaul of the automotive industry will continue, and only manufacturers with incredible application experience will win. Here’s why:
1. The eternal physical-digital connection problem is getting worse
Research from Forrester in its Automotive Customer Experience Index highlights that manufacturers continue to struggle to bridge the digital experience (primarily pre-purchase research) with the physical dealership experience (e.g., visiting a dealership for a test drive ).
However, in terms of the overall customer journey, that’s really only part of the interactions car owners have with a manufacturer. Customers today expect not to be treated like new customers at every point of interaction they have with a brand.
In automotive, these touchpoints include automotive financing, often through the manufacturers financial services team, maintenance, warranty and subscriptions or similar extras, through to the installation of charging stations. home electric charging, and more broadly the entire customer onboarding experience.
Too many of these elements require often heavy human intervention. Just think about the last car you bought and try to figure out what the different buttons on your dashboard do without someone at the dealership explaining it to you.
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2. Siled organizations lead to siled customer data and experiences
Many traditional automakers tend to separate purchasing, financing, and service organizations, resulting in inconsistent customer experiences and costly in-person interactions (for automakers, these are the most expensive).
Too often, the impact of different silos on the customer is overlooked. The lack of a clear, single view of the customer also enhances an already broken experience.
Many companies, including in the automotive sector, are investing in Customer Data Platforms (CDPs) today, and the benefits are clear:
- Move operational tasks online and significantly reduce the cost of service, leveraging customer data and insights.
- Focus on high-impact, high-impact personal interactions.
- Bridge the gap between physical and digital interactions where dealerships could access website, configurator behavior data to create high-value point-of-sale visits for a customer supported by AI and ML in time real.
3. Beyond car manufacturers
Despite the limited launch and scale of new automakers to compete with traditional OEMs (Original Equipment Manufacturers) so far, the competitive landscape for automakers goes beyond their own species:
- Tech companies like Apple and Google are investing heavily in automotive technology, and Amazon through Zoox in self-driving vehicles.
- Mobility companies (Uber, Lyft or Grab in Asia) and Mobility-as-a-Service from disruptors like Gogoro (Taiwan), GetAround (USA) and ShareNow (Germany) which already has more than 3 million customers.
VW only recently announced a major technology investment to be “more ambitious” against tech players like Apple and Tesla.
Ultimately, however, the ecosystem in which automakers operate will become increasingly complex, and it remains to be seen whether auto and mobility companies are successful in meeting these challenges.
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4. Create an automotive open data ecosystem
We are already seeing changes in consumer ownership preferences and a culture that seems to be shifting towards car sharing and subscription-based models. McKinsey believes that “up to one in 10 cars sold in 2030 could be a shared vehicle”.
Particularly in the field of electric vehicles and car sharing, we will undoubtedly see innovative models based on the use of payment per kilometer. And just like disruptors in other industries (food delivery, anyone?), these innovators will own customer data and make data monetization a core part of their business model.
Certainly in Europe it is predicted that we will see something like an open data directive for car manufacturers, potentially similar to the Payment Services Directive (PSD2) which could force companies to open their products (cars and apps ) for third-party services and technologies.
Opening up access to data and technology for third parties will of course require additional security considerations in an industry that moves people, to both secure and protect the car’s systems (against hacking, for example) and personal data from being compromised.
Automakers that haven’t yet prioritized data access between their own systems at a minimum are already behind the game.
5. Why are apps central to the customer experience?
Manufacturers who can create an open digital ecosystem and deliver a seamless app-based experience to their customers will dominate the market in the future.
We all already have too many apps. However, the banking app has already replaced the physical branch in many countries and in certain age groups and demographics. For automotive, application has the potential to be just as important.
A single connected app should allow you to view your auto finance account, book your car for service, provide you with a car health check, locate and pay for parking, use the smart connectors of the city, find those EV charging points, and let you select those “Best Road Trip Songs” playlists.