Loyalty and Customer Experience:

the new battleground and some

future challenges

Its all about product…right?

4

89%of companies plan to compete

primarily on the basis of the

customer experience by 2016

Source: Gartner

Despite continual heavy R&D investment…

Why is Customer Experience the differentiator?

Great customer experience…

does it really make a difference?

When the going gets tough – a lesson from history

0

2

4

6

8

10

12

14

16

91 to 100 81 to 90 71 to 80 61 to 70 51 to 60 41 to 50 31 to 40 21 to 30 11 to 20 0 to 10

% d

eale

rs g

oin

g o

ut of

busin

ess 2

008

Satisfaction percentiles

Dealers going out of business in the recession by sat levels

sales Service

Bottom 10% 3X more likely

to go out of business than

top 10% in sales;1.5x in

aftersales

Impact of satisfaction on repurchase

Dealer

satisfaction

level

Satisfaction

by level

Completely

satisfied

47%

Very satisfied 23%

Fairly satisfied 16%

Dissatisfied 7%

Very

dissatisfied

6%

100%

Impact of satisfaction on repurchase

Dealer

satisfaction

level

Satisfaction

by level

Vehicles sold

Completely

satisfied

47% 343

Very satisfied 23% 169

Fairly satisfied 16% 119

Dissatisfied 7% 49

Very

dissatisfied

6% 45

100% 726

Impact of satisfaction on repurchase

Dealer

satisfaction

level

Satisfaction

by level

Vehicles sold % customers

who bought

next car at

same dealer

Completely

satisfied

47% 343 52%

Very satisfied 23% 169 41%

Fairly satisfied 16% 119 25%

Dissatisfied 7% 49 4%

Very

dissatisfied

6% 45 8%

100% 726

Impact of satisfaction on repurchase

Dealer

satisfaction

level

Satisfaction

by level

Vehicles sold % customers

who bought

next car at

same dealer

Cars sold

based on

loyalty

projections

Completely

satisfied

47% 343 52% 179

Very satisfied 23% 169 41% 69

Fairly satisfied 16% 119 25% 30

Dissatisfied 7% 49 4% 2

Very

dissatisfied

6% 45 8% 4

100% 726 283

What happens if we move customers up one level on dealer satisfaction?

Dealer

satisfaction

level

Satisfaction

by level

Completely

satisfied

47%

Very

satisfied

23%

Fairly

satisfied

16%

Dissatisfied 7%

Very

dissatisfied

6%

100%

What happens if we move customers up one level on dealer satisfaction?

Dealer

satisfaction

level

Satisfaction

by level

Satisfaction

by level

Completely

satisfied

47% 71%

Very

satisfied

23% 16%

Fairly

satisfied

16% 7%

Dissatisfied 7% 6%

Very

dissatisfied

6% 0%

100% 100%

What happens if we move customers up one level on dealer satisfaction?

Dealer

satisfaction

level

Satisfaction

by level

Satisfaction

by level

Vehicles

sold

Completely

satisfied

47% 71% 343

Very

satisfied

23% 16% 169

Fairly

satisfied

16% 7% 119

Dissatisfied 7% 6% 49

Very

dissatisfied

6% 0% 45

100% 100% 726

What happens if we move customers up one level on dealer satisfaction?

Dealer

satisfaction

level

Satisfaction

by level

Satisfaction

by level

Vehicles

sold

% customers

who bought

next car at

same dealer

Completely

satisfied

47% 71% 343 52%

Very

satisfied

23% 16% 169 41%

Fairly

satisfied

16% 7% 119 25%

Dissatisfied 7% 6% 49 4%

Very

dissatisfied

6% 0% 45 8%

100% 100% 726

What happens if we move customers up one level on dealer satisfaction?

Dealer

satisfaction

level

Satisfaction

by level

Satisfaction

by level

Vehicles

sold

% customers

who bought

next car at

same dealer

Cars sold

based on

loyalty

projections

Completely

satisfied

47% 71% 343 52% 266

Very

satisfied

23% 16% 169 41% 49

Fairly

satisfied

16% 7% 119 25% 12

Dissatisfied 7% 6% 49 4% 2

Very

dissatisfied

6% 0% 45 8% 0

100% 100% 726 329

Additional units sold * profit per unit = sales uplift

+Additional units sold * service profit per unit = service uplift

Last time we ran this study in 2012, this amounted to

$106,315 additional profit per dealer per year

Doing the maths

1050

1100

1150

1200

1250

1300

1350

0

10

20

30

40

50

60

70

80

90

100

Bottom 20% Top 20%

Impact of NPS on GP per vehicle - sales

NPS GP

European data point the same way

0

200

400

600

800

1000

1200

0

10

20

30

40

50

60

70

80

90

Bottom 20% Top 20%

Impact of NPS on GP per vehicle - service

NPS GP

What does the

future look

like?

A disconnect in what we do today?

Customer wants this We tend to do this

So if customer experience is the next battleground what might it look like?

Customer CX Manager/Provider

On my terms

In my voice

Relationship, not surveys

What’s in it for me?

Omni channel

Text Driven

4 questions not 44

Breaking the MRS taboo’s?

• Of course CATI, SMS, mobile, tablet, PC, even postal

• Outbound and inbound

• Social media integrated

But also…

• Location triggered interaction when leaving the

dealership?

• Using the in car technology and your intimate knowledge

of the customer

Omni channel

23

As OEMs you have (the potential) to know

• Driving characteristics

• Where driven

• How driven

• Regular routes taken

• Used at weekends?

• Used for vacations?

• etc

The opportunities for Big Data and individualised customer

engagement are enormous

24

Opportunity to use in car technology

Real-time customer engagement

• Increasingly it is all

about MY story

• Text analytics is

already becoming a

key driver for

understanding both

survey and social data

• Machine coding

accuracy now

approaching human

coding

Text driven

4 questions not 44

4 questions not 44

Make the survey shorter!

• Don’t ask things you (should) already know

• Don’t ask about your internal processes –

use mystery shopping or internal audits for

that

• Don’t try to cover everything in one go

• Do ask relationship questions – emotions are

at least 3x better determinant of loyalty

• Do put open questions front and centre

4 questions not 44

Nearly 80% of Customers Will Provide Personal

Information to a “Trusted Brand”

Many of us will trade…

Source: SDL Data and Privacy Study 2014

What if this is what the customer wants?

• A non-research purpose is when data is collected for reasons other than to enhance understanding in a robust way

• Generally non-research exercises have one or more of the following characteristics:

– If the data is collected on an identifiable basis, direct action

will, or may, be taken.

– The exercise promotes the aims or ideals of a client or

organisation

– The exercise promotes the products or services of a client

or organisation.

• Source: MRS Regulations for Using Research Techniques for Non-Research Purposes, 2010

Breaking the MRS taboo’s?

• A 2-way relationship with the Brand where research,

CRM and “something for something” brings them a

genuinely enhanced experience?

• Where we operate with ethical and governance in place,

but without the firm delineation of research and “other”

What if that is exactly what customers want?

In Summary

34

Loyalty and CX are changing

CX is the next battleground

CX does drive business outcomes including loyalty

The world of customer feedback and expectations has

changed more in the last 3 years than previous 30

The changing consumer wants something we are

potentially standing in the way of

Perhaps its time to rethink and reinvent how we as an

industry engage with this changing customer world?

Time for drinks!