The nature of the car industry has changed dramatically. Drivers are demanding far greater levels of flexibility and convenience. The brand and the vehicle itself are becoming less important, and OEM customer loyalty is won or lost in every interaction. In fact, today's consumers are unforgiving when it comes to poor customer experience: 72 percent saying that they are likely to switch companies after just one bad experience.
Some OEMs are evolving their offering from selling new or used cars to mobility services, perhaps also partnering with third party platforms. At the same time, new players such as the tech giants Google, Amazon and Baidu, are quickly entering the value chain. For example, Honda is rolling out vehicles with Google’s embedded Android Automotive OS, which includes Google’s voice-activated Assistant, Google Maps, and other automotive-approved Android apps. The 2022 Consumer Electronics Showcase (CES) conference highlighted the buzz around mobility innovation. Japanese electronics giant Sony offered attendees a glimpse of its second concept car, the Vision S EV, strongly hinting at creating and selling vehicles after forming its Sony Mobility subsidiary. The Bosch Group, known for its power tools and home appliances, invests three billion euros every year in the development of new codes for the automotive sector. The company highlighted its software development activities at the conference, many of which already equip the on-board control units supplied to vehicle manufacturers.
New ways of interacting with customers are coming up and it is not only about selling the car but a lifetime of services, too. OEMs must recognize that driver experience isn’t only about car ownership, but also about the interactions drivers have with the brand.
These interactions range from the physical to the digital and the emerging blending of both throughout the customer journey. Car brands are represented at the dealership, in the call center, during pre-sales, sales and post sales. On the digital side, interactions go beyond the OEM website and e-commerce platform; customers are interacting with the brand via live chat, email, live video, or web page. Social media is also influential in the way customers perceive interactions with an OEM product or service. This perception of the customer amplifies their brand sentiment across the web, whether good or bad.
To keep a positive brand sentiment, OEMs need to address rapidly evolving customer expectations stepping away from just pre-sales and sales to harnessing customer lifetime value – the entire end-to-end ownership period of the customer across all channels, both in-person and digital.
Other industries are far ahead of the automotive sector when it comes to facilitating lifetime customer value. For example, Amazon’s customer retention is through the roof year over year. Amazon Prime members in the U.S. have a 93 percent retention rate after the first year and 98 percent after two years. How did Amazon achieve this dream? There are many aspects to Amazon’s interface, customer experience and marketing that can serve to boost and improve customer retention in the automotive industry. From creating a sense of urgency and fear of missing out to offering free shipping, returns and perks for loyal customers, Amazon has managed to tap sensitive touchpoints with customers that drive a successful and high retention rate.
Examples such as Amazon are driving a need for change in automotive because customers who enjoy positive experiences in other industries with other products, are expecting a similar offering from the auto sector. Some OEMs are reimagining the future: Hyundai is creating a new vision of a car as simply a utilitarian structure that gets people from A to B. Instead, the content of a car can be useful to the way people live their lives. For Hyundai, the future electric vehicle is about unlocking the potential of travel time, enabling drivers to do more than sit behind the wheel – and to sightsee or shop. The brand is using technology and smart modular design so that passing places of interest, such as monuments or restaurants, appear tagged with information to drivers and passengers.
