Customer experience is the differentiator, but dealers haven’t cracked it yet

Posted by Alex Knight on 23-Dec-2019 08:39:35
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Dealers have long recognised that it is the customer experience which ensures a business stands out and customer satisfaction levels have been a key business metric for decades.

satisfied customer

However, digitisation has allowed consumers to compare and contrast used car prices whilst websites like Auto Trader even indicate whether a car is priced well, meanwhile, aggregate aftersales sites help customers find the best priced or immediate availability for servicing or repairs. Many of these websites will also ensure dealers and repair centres with good customer reviews are pushed to the top of their returned search lists.

The annual Global Automotive Consumer Study published by Deloitte Touche Tohmatsu Limited (DTTL), found millennials, those born in the 80s to mid-90s and fast making up a huge swathe of the automotive retail customer base, value the customer experience three times as much as vehicle design when making their final purchase decisions.

According to a report from McKinsey, millennials will make almost half (45%) of potential car-buyers in 2025. As the largest car buying demographic in just five years, businesses need to appeal to these tech-savvy customers and deliver a seamless customer experience in the digital sphere and in-store.

But, despite the customer experience magnified in a much more intense way than ever before, the automotive sector still isn’t keeping pace with expectations.

The McKinsey report highlights servicing as one area where processes rooted in the past are not delivering for customer. Described as a hassle and expensive, consumers are spending around 15 hours to buy their car and around 50 having it serviced during the ownership cycle. The research identifies several ‘pain points’ which dealers can address now such as making the booking process more straightforward rather than forcing customers to make several phone calls, reducing the waiting time when dropping the car off and improving communication particularly around cost, expected time of completion and collection arrangements.

It can be a similar story in sales, the just published AM 2020 Franchised Dealer Report  highlighted Auto Trader’s  Car Buyers’ Report published earlier this year which concluded that ‘consumers are frustrated by a complex process, and as a result slowing up sales at a time when the industry need them most’. Despite the ‘the customer is king’ mantra, this is not being translated on the forecourt or showroom floors leaving customers frustrated at an overly complicated sales process and less likely to buy.

The AM report incorporated a cap hpi analysis of a used car market realignment in 2019 whereby the first seven months of this year saw average values drop by 12% following high demand pushing prices up during 2017 and 2018. Further pressure came with higher volumes coming back into the market this year following the increase in registrations three years ago. Predicting a continued stabilisation of used car values into 2020, cap hpi also warned of a wider model mix and more electric and hybrid vehicles resulting in an even more complex used car market and additional impact from the political climate, the economy and new legislation.

 Whilst cap hpi advises dealers to keep a close eye on vehicle valuations to ensure stock is bought and sold at the right price, customer service will come into the fore becoming even more of a differentiator. Consequently, dealers would do well to do everything they can to make sales and service a simpler, more efficient and customer-focused journey.

Topics: customer experience, technology, dealerships, customer satisfaction, automotive, consumers, dealer, service, retail

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