Automotive Industry Transformation = Disruption or Opportunity?

Over the past two decades we have witnessed a massive transformation in the automotive industry, driven primarily by advances in technology.  Where once the value in vehicles was 90% hardware-based, this has shifted to more than 50% software-based1.  Not surprisingly, this has dramatically changed the experience of buying, owning, driving, and maintaining a car.  The team at SuiteCX has been working in lockstep with automotive Manufacturers for over 20 years, helping navigate through this changing environment, and ensuring the companies evolve to achieve competitive advantage through customer experience excellence.

Disruption in the Industry

As technology has taken a front seat in the new generation of vehicles, the industry has undergone a tremendous amount of change.  This has set off a chain reaction of events, which have significant impact on the car Manufacturer and customer.

1.  50+% of vehicle features are now software driven

The shift toward software-based features means the car has essentially become a rolling software platform, capable of delivering services based on data, sensors, and analytics.  While this has translated to significant benefit to the customer in most cases, it also results in significantly more complexity.  As a result, Dealers have had to hire and manage entire departments of digital trainers and managers in order to support their customers.  In addition, due to the nature of the software, there are more recalls and unplanned events that create a need to communicate quickly to resolve problems and in some cases prevent dangerous situations.

2. Disintermediation of Dealers

The increase in software, which is often developed, supported, and billed by a 3rd party (think SiriusXM, OnStar, etc), has resulted in the disintermediation of the Dealers.  These 3rd parties have their own objectives especially around service and accessories, and often the Dealer is not in the loop.  Though the Dealer would like to be the primary point of contact for the customer, often times the customer goes directly to the 3rd party service provider, who may or may not be able to resolve the issue.  This can result in the customer being bounced around between the 3rd party and the Dealer, and/or the Dealer is never informed of the issue at all.

3. Many new entities touching the customer

In this new automotive dynamic, there are many more people, departments, and companies looking to engage with and communicate to the customer – Dealers, Manufacturers, 3rd party service provides, and more.  Car Manufacturers typically utilize many agencies to manage the brand, design, creative, execution of campaigns, onboarding, and after market activities.  These disparate teams are typically not coordinated in terms of outreach and communication to the customer.  Even within the Dealer there are different departments – Finance, Warranty, Service, etc – that are marching towards different objectives, metrics, and incentives.  Each department typically creates its own communication plan to achieve those objectives.

So what does all this mean to the customer?

Unfortunately, all of these changes have resulted in a fairly challenging experience for most car customers.  First and foremost, customers have been overwhelmed by inconsistent, irrelevant, and poorly timed communication.  Inside this blizzard of communication, the customer is unable to differentiate between the communication from a branded entity (corporate or Dealer), and other senders.  The customer assumes they are all integrated and coordinated.

Customers are bombarded with messages (typically via email), which often result in email unsubscription or the customer simply deletes the messages.  Compounding the issue is the fact that there is no ability for the customer to manage or change their notification preferences.  So, even if they wanted to continue to get a select set of communication, they have no way to do that.  Once the customer has unsubscribed, they will now miss the really important communications about issues, or worse, recalls.  And leased vehicles may not be maintained to standards, resulting in higher trade in costs.

This brave new world has presented challenges to the car Manufacturers as well.  Media channels cannot be optimized in this environment, leading to inefficient and ineffective advertising spend.  In addition, due to the heavy reliance on email, once a customer unsubscribes (or simply stops reading) the messages, the car company loses the ability to communicate upgrades and additional services.

Opportunities & Solutions

As is often the case, with disruption comes opportunity, and in this case there is an opportunity for automobile Manufacturers and Dealers to improve their bottom line, while simultaneously improving the customer experience.

Strategic Opportunity

By understanding the holistic customer experience, including how the customer interacts with the Manufacturer/Dealer, moments of truth and pain points, we can suggest improvements in terms of people, process, and data sharing.  Through the use of consultative workshops, we can pull disparate teams together to solve existing customer experience issues.

Through the use of structured analysis and customer journey mapping, we can present the Manufacturer with a visual representation of the interaction, clearly showing them where they are pushing the customer away versus engaging them.  This allows the Manufacturer to understand how and when messaging is most likely to be effective.  Sharing this information with the Dealer enables the Dealer to know what is happening at each lifecycle step, so they can also coordinate and optimize their mind-share and spend.

Revenue Opportunity

Manufacturers and Dealers need to begin working together to develop a holistic view of their reputation, sales, and post sales efforts.  This must be a collaborative and comprehensive endeavor that will result in improved coordination at critical customer milestones such as onboarding, first service, lease renewal, and new sales.

Once a holistic view is in hand, Manufacturers and Dealers can effectively use technology to surprise and delight the customer with relevant content such as tips and techniques, as well as to notify and remind customers about sales and promotions.  The ability to text (or otherwise notify) customers about promotional information is critical to a good experience.

Beyond basic marketing promotions, Manufacturers and Dealers that understand the customer journey can begin to anticipate future customer needs.  For instance, if a customer has locked himself out of the car three times in the past month, that data can be leveraged to trigger communications to that customer with tips to avoid getting locked out.  And, the Dealer knows to give the customer a quick lesson the next time that particular customer comes in.

Risk Management Opportunity

For Manufacturers and Dealers, the ability to provide timely and relevant information to customers isn’t just important for marketing efforts, it can be critical to the safety of the customer.  Most basic are reminders for planned maintenance and service.  Unplanned events, especially those for software issues, can have serious consequences for customers.  Those events that are communicated quickly and proactively are much better received by the customer.

Knowing the customer’s primary communication channel(s) is of utmost importance, and having permission to provide a notification via text or mobile application increases the effectiveness of communication.


1 Don Butler, Ford Motor Company, “Digital Transformation and the Automotive Industry,” CXO Talk, 8 May 2015, https://www.cxotalk.com/connected-vehicles-automobiles-technology-platform-don-butler-ford

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