"If I had asked people what they wanted, they would have said faster horses." This much-repeated quote, attributed to Henry Ford, epitomizes the meaning of innovation, which is defined as the introduction of new ideas, devices, or methods.
Instead of faster horses, the world got automobiles, and today it's almost impossible to imagine life without this game-changing invention. And while today's cars have come a long way from the first horseless carriage that Ford built in the late 19th century or the early vehicles that came before it, the automotive industry is still banking on innovation in order to gain a competitive advantage.
More than ever, today's vehicle industry is looking beyond the creation of faster and more efficient cars. While these characteristics remain important, automotive companies are trying to find ways to improve the customer experience, making sure that their clients remain loyal to their brands, coming back when it's time to change their cars with newer models.
As Sandra Smith, senior vice president for TeleTech's automotive vertical, notes, the need for customer centricity in the automotive industry has never been greater. Not only are today's customers more informed and are using this knowledge to power their decisions, but they're no longer comparing a company just with competitors in the same industry. Instead, customers expect the best-ever experience from each and every brand with which they do business. Research carried out by TeleTech in 2013 found that more than half of customers consider a good customer experience as highly important in their decision-making. Further, 68 percent note that they would consider doing business with an automotive company based on positive word-of-mouth.
As Jamey Power IV, former senior vice president and strategic advisor at J.D. Power and Associates, notes in this interview, "Powering the Automotive Customer Experience," customer expectations are on the rise, due, in part, to exposure to higher quality of service. "What was acceptable in the past is no longer acceptable today, and furthermore won't be acceptable in the future if the providers don't continuously adapt to those rising expectations," he says.
Some of the most advanced automotive organizations-both manufacturers and dealers-are well aware of the need to differentiate by improving customer experience and aligning their delivery with customer expectations. Experts list the following four innovations as the main ones that are disrupting automotive customers' experience:
1. Connectivity revolutionizes vehicles
Today, almost everything can be connected to the Web, allowing customers to be themselves connected through these devices. As Forbes writer Joann Muller notes in this article, "Connected Cars: 10 Tough Problems Automakers Must Solve," there is little doubt that the cars of the future will also be connected to the Internet. "Web-linked cars are the next digital frontier and key to the auto industry's efforts to attract younger, tech-savvy car buyers." But Muller notes that connected vehicles aren't only about providing email access or the ability for drivers to use social media through their vehicles. "Connected cars will be able to help drivers navigate the best route home at rush hour, automatically schedule maintenance appointments, and even order and pay for takeout food."
In a recent study, "Emerging Technologies: Big Data in the Connected Car," IHS Automotive forecasts that by 2020 there will be about 152 million actively connected cars on the roads around the globe, leading to $14.5 billion of value from Big Data assets like diagnostics, location, user experience and feature tracking, and adaptive driver assistance systems. "Significantly, the technology growth will drive sales, value added services and customer experience in the sector for years to come," IHS Automotive notes.
The report estimates that in 2013 there were more than 26 million connected cars on the roads. General Motors and AT&T recently announced an agreement that will see 4G LTE-connected cars on the market in late 2014.
The benefits of connected vehicles are substantial. Not only does this technology provide information to the driver, for example allowing him to take an alternate route to avoid traffic, but as Smith notes, it can even proactively alert both the owner or the vehicle manufacturer or dealer about an issue with the car. For example, if the vehicle requires an oil change, the owner can be alerted and invited to make an appointment, instead of the dealer sending a reminder by mail. This will have a major impact on customer experience, allowing vehicle owners to remain on top of their car's needs and helping to keep their cars in top shape for longer.
However, in order to make the most of this technology, manufacturers and dealers will have to proactively reach out to customers and alert them about actions they can take to maintain their cars, and then deliver on the experience. One example is making it easy for owners to make an appointment to take their cars in for a service, and connecting the different touchpoints to create a true omnichannel experience.
2. Telematics puts more power in customers' hands
Having a GPS system embedded in the vehicle is not only not a new technology, but one that is actually expected. Today's vehicles have gone beyond just having a stereo and GPS embedded in their dashboard, and instead are providing a wholly connected experience, with backseat television and devices that allow drivers to connect with someone who can help them and answer questions.
But vehicle connectivity goes beyond entertainment. Today automakers are embedding safety features that can even send the necessary alerts when a vehicle is involved in an accident. As 2013 Customer Champion Barry Ratzlaff, Hyundai's executive director of customer support, notes in this article, "Protecting Customers' Interests," the Blue Link system in Hyundai vehicles is able to contact the call center if the car's air bags deploy indicating that the vehicle was involved in a traffic accident. The system is even able to send key information like the vehicle's location in case the driver is unable to provide that data. Drivers can also get emergency assistance by pressing the SOS button on their mirror. Further, the Blue Link Telematics platform led to the creation of Hyundai Assurance Connected Care, a system which proactively sends customers alerts to let them know they're due to take their vehicles in for a service.
The constant advances in technology are also allowing drivers to tap into the functions of their smartphones while driving. In March 2014 Apple announced that a number of automakers are rolling out its CarPlay, a system that connects a driver's iPhone to the vehicle's built-in display, allowing him to make calls, send text messages, get directions, and listen to music without having to look at his phone's screen. As Greg Joswiak, Apple's vice president of iPhone and iOS product marketing, notes in a press release, "iPhone users always want their content at their fingertips and CarPlay lets drivers use their iPhones in the car with minimized distraction."
The technology based functions in today's vehicles tend to need to be updated before an owner is on the market for a new car. Dan Smith, Outsell's vice president of product, notes that on average people are taking longer to change their vehicles, which is also due to dramatic improvements in vehicles that require less servicing. This makes it essential to keep the technology up to date. As Paul Mascarenas, Ford's chief technical officer, notes in this interview, the automaker launched Ford SYNC in partnership with Microsoft in 2007, allowing for the car's technology to be updated regularly. For example, the automaker mailed USB flash drives to owners of SYNC-equipped cars allowing them to install the software updates themselves rather than going to a dealer, providing a more convenient customer experience.
As Power notes in the above-mentioned interview, automakers need to make sure that the technological interfaces in their vehicles aren't too complicated for consumers. "We've seen time and again that some automakers release sophisticated technology that isn't ready for prime time," he notes. "When it's not ready, car companies frequently pay the price. Car makers can underestimate the need to have the features, the product, and the system ready for the customer, and not assume that a salesperson at the dealership can educate the customer on how to make it work."
3. Data improves dealers' efficiency
Information is essential to help dealers provide an optimal experience to their customers and be top-of-mind when the same clients are back in the market for another vehicle. First, this data needs to be used to proactively reach out to customers and let them know when their vehicles require a service, which, as mentioned earlier, can be done automatically using the vehicle's connectivity functions. This proactive outreach is essential to make sure that owners maintain their vehicles in tiptop condition and also maintain an ongoing relationship between the dealer and the customer.
Outsell's Smith explains that dealers have a lot of information about their customers, including purchase history and also their service needs and habits. "Dealers can harvest this data and send very targeted messages based on both lifecycle and customer behavior," he notes. Without these regular interactions it would be very difficult to retain a warm relationship since there are years-long lags between purchases. While today's purchasing journey is very fragmented and customers tend to do a lot of research before their first contact with a sales person, Smith notes that dealers can use predictive analytics to identify the moment an individual customer might be on the market for a new vehicle, and reach out with the most suitable offer. Messages need to be relevant to both the client's finances and his life stage, for example does he have young children and need a family car or is he recently retired and might be on the market for a sports car.
Jenna Lotter, business development manager at Patsy Lou Automotive Group, notes that most buyers enter the sales funnel when they're still a few months or even a year away from making a purchase. She notes that it's imperative to be able to provide them with all the information they need to answer their questions. Further, Lotter notes the importance of using data to follow up with individual clients, providing them with relevant information and keeping top-of-mind. For example, the dealership monitors shoppers who visit its website and uses banner ads to invite them back to the site.
4. Social and customized webistes change the buying journey
With information at their fingertips, today's customers are able to do ample research before they need to speak to a sales person. The availability of information makes it much easier for prospects to compare different companies and narrow down their choice. In fact, automakers and dealers are leveraging the Web to make it easier for customers to get information about vehicles they're interested in, and even purchase online. Patsy Lou Automotive Group launched the Shop, Click, Drive function for its Chevrolet, Buick, and GMC brands, allowing customers to buy a car online without even visiting a dealership. "We want to embrace the fact that our lives are extremely hightech," Lotter says. She notes that more than 100 customers have made an online vehicle purchase since the pilot was launched in 2012.
The advent of social media has brought another shift to the decision-making process, allowing customers to communicate with each other and share their experiences. Customers no longer need to know someone who has already done business with a particular company in order to get information about that brand, but can simply go online and read reviews or even ask another customer about their experience, both before and after money exchanges hands.
Apart from using social media to communicate with customers, automakers can leverage these channels to better understand what customers need. As Mascarenas notes, Ford is leveraging social channels to gather and evaluate potential new feature ideas and technologies for the company's cars.
Because they have access to so much information and are able to make a more informed decision, prospective buyers are willing to drive further to get the vehicle they want, notes Outsell's Smith. "While some years ago most were only willing to go up to 20 miles away from their homes, now they're going up to 100 miles to get the vehicle they want," he explains.
Additionally, advances in web technology is allowing customers to customize their own vehicles online and know what they will look like, giving them time to play with the different choices before going to the dealership. Ford has this online customization function for its Mustang cars and Porsche also allows customers to build their own vehicle.
Even when it comes to asking for support, customers are using different touchpoints. Lotter notes that more customers are leaning towards live chat and texts, preferring these modes of communication even over email. "We see customers want instant gratification, which is offered by live chat and texts," she notes.
Finally, in order to improve the customer experience, automakers and dealers need to work together to help inform customers on ways to make the most of their vehicles. As TeleTech's Smith notes, vehicles are becoming more complex, and it's imperative for automakers and dealers to make sure customers know how to operate complex vehicles and make the most out of their functions. "Give them the tools, like online videos, helpdesk access, or share materials over social media, to understand how to get the best use out of their cars," she says.