Published in Automotive

New distribution channels in the automotive industry and its impact on customer satisfaction surveys

The customer base in the automotive industry is changing at a faster pace than ever before.

For a few years now, we have experienced an increasing differentiation of customer segments with different interests and demands. This change does not stop at clients expectations – in particular, with respect to their buying experience.

A credit to this fact is the continuously growing importance of online sales. So one in five German car owners has already bought a car online, half of them even a new car. Platforms like mobile.de benefit enormously from it and contain about 1.4 million vehicles in Germany.

In addition to online sales other channels have also gained importance for setting up initial awareness and for decision-making in favour of or against the purchase of a brand or model. This leads to the classic “sales funnel” no longer being the key process map for vehicle acquisition. There is no longer only one path from the first search for information to final contact closure. Rather, sales organisations need to adjust to diverse ways of creating distinct opinion, individualising experience and coming to a final decision based on much more heterogeneous factors.

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Thus, a few years ago the vast majority of potential car buyers visited several dealers for decision-making. Today, consumers make use of a variety of information sources and sales channels before contract closure. So when entering a dealership for the first time, most clients have a clear idea about product and deal they are looking for.

Some car manufacturers get ready for the new customer expectations and open up new sales channels.

Customers in the premium segment particularly want to have as many channels to choose from, and use, according to individual preferences. An integrated multi-channel strategy (combination of online and offline channels) in sales is the logical response of OEMs and a way to differentiate themselves from competitors.

In addition to direct sales via own websites more sales channels such as brand stores, call centers and specialised field staff (mobile sales advisors or product experts) are used to provide customers with individual added value.

At the same time, Flagship and Pop-up Stores are set up at strategic locations in order to increase proximity to potential clients and to strengthen the emotional connection with a brand. In contrast to a traditional product distribution using authorised dealers and branch offices only, OEMs are therefore more directly involved in the sales process. There are three major challenges with this approach:

1. In contrast to the traditional sales channel – making use of authorised dealerships only – the brand must be immediately present – not just visible. They should shape the sales process of each customer individually and they need to go along with him/her through the entire sales journey. As a consequence, OEMs must build up appropriate structures that define and fine-tune processes to ensure the quality of customer care.

2.  The new triangular relationship between the customer, brand and retail requires a proper alignment – since even in case of a dedicated focus on direct sales the retail organisation will nonetheless play a prominent role in the new sales funnel process: Prospects will still refer to sales advisors at dealerships in order to get individual consultancy; test-drives need to be managed locally and, last but not least, car delivery is actioned by the retail network. Hence, managing a great customer experience holistically requires a seamless interaction and harmonised cooperation between retail and wholesale.

dealership-23.  Even in the future, branded dealerships will have a key role when it comes to Customer Care and maintenance of a proper – and close – emotional connection between consumer and brand.  Customers’ experiences need to be managed appropriately during the entire ownership lifecycle – particularly when heading into the re-motorisation phase. At this stage, the Dealer is the key contact and has the main influence on a client’s repurchase decision. In the utilisation phase before, it’s in the hand of retailers to establish the basis for sustainable brand loyalty.

Customer satisfaction measurement has to adapt to the new environment and to respond to the changed conditions.

Converted customer needs in the buying process, and the respective concomitant introduction of the multi-channel distribution, requires thorough consideration and flexible solutions for lots of new issues in the design of future customer satisfaction surveys.

A multi-dimensional sales funnel concept must accommodate the complexity of individual Customer Journeys adequately. Previous surveying concepts primarily focus on client experiences made at a dealership or are aligned to retail processes after car delivery.

In the case of diversified experiences in a multi-channel sales environment the traditional – rather one-dimensional – survey won’t be sufficiently accurate since respondents tend to merge their perceptions and experiences gained across the different touch-points.  Thus, a precise measurement of satisfaction with each channel as well as the following deduction of operational needs for improvement will be more complex than ever before. For managing these new challenges, conceptual improvements are required:

Compared to today’s surveys, interviews in future need to be arranged much earlier in the purchase process and need to track prospects and customers through all phases – starting at information search and ending with car delivery. By scheduling a brief feedback loop shortly after each touch-point allows for a precise evaluation of channel-specific experiences and the resulting state of mind.

Survey contents need to be customised individually per sales channel. This is compulsory to refererence the different criteria defining performance and related success at each relevant touch-point.

Furthermore, future surveys need to have a more flexible approach (i.e. the possibility to start at various points of the sales process) and should be aligned with the special expectations pertinent for a particular sales channel.

As a consequence, there is need for a stronger linkage of all the survey results. We must be able to connect all feedback and information gathered at different stages of the buying process and across channels used: level of satisfaction, needs and resulting state of mind. Data needs to be merged intelligently in order to take a snapshot of the current situation and to derive proper follow-up interaction. All in all this is the key to map strengths and weaknesses of each sales channel accurately and to enable effective improvement action.

In reality, it means much more information is needed to conduct a customer satisfaction survey.  While today excerpts from customer databases or transactional data of retailers are sufficient, more information about each individual customer journey will be required in future. Besides a clear (and timely) identification of the each sales channel used, in particular those initiatives obtaining clients’ opt-in will be affected.

Bottom line and conclusion

A multi-channel sales strategy in Automotive involves a number of challenges, both for the design of the sales processes as well as for customer satisfaction surveys. “Customer Experience Management” needs some kind of re-design – particularly in order to address above mentioned issues – plus included varieties – and to offer appropriate solutions. Those facets presented in this article are only the tip of the iceberg, since each contains a high level of detail and requires a dedicated treatment.