Experience is the new battleground

Retail and big tech leaders continue to raise the bar for customer experience, and the auto industry must adapt. New generations of car buyers are not just more digital; they bring high expectations of buyer and owner experience from outside the industry. Auto companies need to think beyond the initial vehicle sale. 

In order to come out on top, companies will need to move away from the traditional manufacturing model with dealers that own the customer relationship, and transition to becoming a technology company with retail that owns and develops the primary relationship with customers through a winning experience and a digital ecosystem.

Convenience has changed how consumers make purchases and value brands. People expect simple, available and personalized shopping options at all times. In fact, 97% of consumers have abandoned a purchase because the service wasn’t convenient enough. Car companies are starting to adapt. For example, websites and apps allow car owners to quickly find the dealer closest to them and book an appointment—it’s as easy as booking a dinner reservation. 

Creating platforms that make things like an oil change simple and frictionless is one effective way that car companies can engage with vehicle owners in a personalized way. Retailers can send coupons after recent purchases, targeted toward items customers prefer based on past purchases or seasonal change. Car companies can send out a reminder that it’s time for a 30,000-mile checkup and include a coupon good for use at any certified dealership. Or, perhaps, they can recommend a car-sharing platform membership to someone who hasn’t been driving much lately. Additionally, if they have recently moved from the suburbs to the city, car companies can offer them a coupon for an electric bike. All these things are possible with data. The original equipment manufacturers (OEMs) that use data to understand and predict needs and behaviors and create seamless experiences will build a sustainable competitive advantage.

Tesla has found success in reinventing the customer experience journey and building an ownership ecosystem. Its success lies in the core of its business model—it’s not a car company but rather a technology company. OEMs must build a core discipline in developing digital products and services to be able to deliver best-in-class customer experiences. This will require auto companies to beef up their investment and talent in core digital capabilities and often includes putting in place a new digital product operating model. Bringing digital experiences to customers requires a different way of developing products than building vehicles. 

When someone buys a car today, the purchase is just the beginning of a new relationship between the shopper and the automotive brand. OEMs that transform to become experience-focused and change how they engage with customers will build a sustainable competitive advantage and ultimately drive shareholder value.