customer experience is the next frontier

Customer Experience: The Next Frontier

Its all about product…right?

NO. The experience the company delivers is now the focal point in automotive.

89%of companies plan to compete primarily on the basis of the customer experience by 2016Source: Gartner

Despite continual heavy R&D investment…

Product parity is increasingly the norm

Features can be copied easily and quickly

Which means that, as time goes by, there is no such thing as a ‘bad’ product

Why is Customer Experience the differentiator?

In an industry where customers are increasingly conditioned to believe that disloyalty is the norm..

Customer experience and brand are inextricably linked “this is how I expect to be treated by a brand like yours”

Why is Customer Experience the differentiator?

Great customer experience… does it really make a difference?

When the going gets tough – a lesson from history

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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

oing

out

of b

usin

ess

2008

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 repurchaseIntuitively we believe that more satisfied customers are more likely to repurchase. This data is from the US NVCS dataset

Dealer satisfaction level

Satisfaction by level

Completely satisfied

47%

Very satisfied 23%

Fairly satisfied 16%

Dissatisfied 7%

Very dissatisfied

6%

100%



Vehicles sold


47% 343

Very satisfied 23% 169

Fairly satisfied 16% 119

Dissatisfied 7% 49

Very dissatisfied

6% 45

100% 726

Impact of satisfaction on repurchaseAcross the industry we can see the split of cars bought across the satisfaction bands



Vehicles sold % customers who boughtnext car at same dealer


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 repurchaseIt gets interesting when we look at whether people came back to buy another car, again broken down by their satisfaction levels



Vehicles sold % customers who boughtnext car at same dealer

Cars sold based on loyalty projections


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

Impact of satisfaction on repurchaseSo across the industry, around 40% repurchase, heavily skewed towards the most satisfied customers

What happens if we move customers up one level on dealer satisfaction?This is the same data for satisfaction from previous charts




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?All we are doing is assuming that each owner moves up one satisfaction band: very satisfied owners become completely satisfied etc





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?The number of cars sold in each satisfaction band is the same as we saw on previous charts




Vehicles sold


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?As is the proportion repurchasing in each band. All that has changed is the level of satisfaction scored




Vehicles sold

% customers who boughtnext car at same dealer


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?




Vehicles sold

% customers who boughtnext car at same dealer

Cars sold based on loyalty projections


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

Because completely satisfied owners are more likely to come back, the impact on repurchase loyalty is huge

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

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Bottom 20% Top 20%

Impact of NPS on GP per vehicle - sales

NPS GP

European data point the same way

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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

• 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

As OEMs you have (the potential) to know

Real-time customer engagement

Opportunity to use in car technology

• 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?Customers want a relationship with the brand. We should not go dark but provide engagement throughout the ownership lifecycle – sharing and receiving data

• 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

The MRS guidelines actively disallow this type of customer engagement

• A 2-way relationship with the Brand where research, CRM and “something for something” brings them a genuinely enhanced experience?

• Where we operate with ethics and governance in place, but without the firm delineation of research and “other”

What if that is exactly what customers want?

In Summary

• CX is the next frontier.

• 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 that traditional CX research potentially stands in the way of.

• Perhaps its time to rethink and reinvent how we as an industry engage with this changing customer world?

Loyalty and CX are changing

Thank You!For more interesting ideas about

CX, please visit, CX Café.

cxcafe.maritzcx.com

customer experience is the next frontier

Leadership & Management