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Are These Customer Experience Strategies Strong Enough to Save The Auto Industry From Extinction?

Dayana Aparicio
21 Jun, 2018

On this blog, we repeatedly talk about how fast change comes in the Experience Era. Now is the time for companies to base their leadership and investment decisions on hard data instead of intuition, or face being left in the dust.

This new era deserves new ideas and fresh eyes. The future belongs to those that not only adapt these trends, but get ahead of upcoming ones.

Companies are incorporating new trends as soon as they appear, however, merely adopting the technology is not enough to thrive in the evolving market. We’ve consistently seen that implementing new methodologies of measuring and addressing customer experience is one of the key strategies that yields profitability and loyalty. This is not a trend, but a fact.

LEarn about the A.I. Survey Blizzard uses to measure their cx ›

To know where to start, you don’t need to be a psychic, but you do need to know what is on your customers’ minds. Surveying that incorporates technology offers the most direct engagement with the voice of the customer. By using A.I for example, to identify feedback that is relevant to your industry and holds the greatest potential of actionable insights, it is possible to create a road map of what your future investments should look like.

Through understanding what motivates their customers, the auto industry is taking the lead on drawing from sociocultural shifts to fuel technological advancements that meet the changing expectations of customers. This movement is transforming a centennial industry and changing what customers expect from their vehicles, how vehicles are manufactured, and the available models of ownership.

Today, I want to examine 4 customer experience trends the auto industry is implementing to keep up with customers' speed of change:

  • Rideshare Services
  • Shifts in Traditional Vehicle Types
  • Subscription Models of Ownership
  • Technological Integration and Automation

Rideshare Services

Source: Lyft

Uber and Lyft have completely changed the way people get around. Where before options were limited to taxis, public transportation or hitching a ride with a friend, now users can simply use an app to order a car and go. This collaborative consumption has led car ownership to be seen less as an asset and more as a service.

Now, car manufacturers are feeling pressured to create value for the new generation of car buyers. Both GM and Volvo have enacted strategies to infiltrate this market. Volvo has partnered with Uber to test autonomous cars and GM’s Rideshare 2.0 plans to have a self-driving ride-share service in major cities within the next two years.

Shifts in Traditional Vehicle Types

Worthix Electric

Urbanization has helped rideshare services thrive by providing accessibility without the need for ownership, but it has also helped fuel the movement towards electric and hybrid vehicles.

Despite the relatively small group of customers willing to invest in the high price tag of a zero emission vehicle (out of the 17 million new cars sold in 2017, only around 200,000 were electric) it is still a market car manufacturers are clamoring to compete in.

Nissan, Kia, Volvo, and of course, Tesla are some of the brands offering their own version of all electric or hybrid models. You may find yourself asking, why are these large brands competing if not based on consumer demand?

The fact is, while on one side regulations and barriers are pushing automakers to meet strict fuel economy guidelines, consumers and industries have been moving away from fossil fuels and motivating the industry to evolve.

On the other hand are consumers who are now migrating towards larger vehicles. SUVs and trucks have gained traction as the go to for families, weekend-warriors, as well as the suburban and rural customers who need a vehicle capable of handling tough jobs.

In response, car makers are gradually cutting their slow selling models in favor of SUVs. Fiat Chrysler CEO, Sergio Marchionne, was the industry leader in embracing this change.

Source: Ford

Marchionne cut the Dodge Dart and comparable Chrysler 200 in order to refocus on Jeep SUVs and Ram trucks and more recently, Ford made news when they announced the only car they would continue to make was their iconic Mustang.

There is simply little room for mid-size sedans when SUVs offer consumers greater space for their buck. Rebecca Lindland, an executive analyst at Kelley Blue Book, recently reinforced this when she spoke with ABC news;  “Consumers are willing to pay for the utility they get … which is hard to pass up.”

Subscription Model of Ownership

Leasing has seen a steady increase in the market share as of late. Access over ownership has taken center stage.

A new alternative introduced is the subscription model of ownership, which conveniently  bundles insurance, roadside assistance, vehicle tax and registration and maintenance, far outweighing the (on average) higher monthly fees of leasing or financing.

Companies like Porsche, Cadillac, Lincoln and Volvo each have their own subscription model. Each program is different but offers membership month to month with no long term commitment.

Source: Volvo

Volvo’s Care program easily appeals to early technological adopters seeking convenience, as it includes delivery and concierge services with the subscription. On the higher end of the scale, Porsche’s program, Porsche Passport, allows members up to 22 different Porsche models with unrestricted mileage for around $3,000 a month.

Although subscription models are unlikely to completely replace car sales, it fills the niche for users who want to be independent from long term commitment while avoiding the cons of rideshare services.

Technological Integration and Automation

A customer’s journey no longer starts and ends in the dealership. Today’s auto buyers can compare prices in seconds, research similar models, or even avoid the dealership entirely by going to a service like Carvana. The company has moved the entire process online, with direct delivery and a trial period to ensure customers are happy with their decision.

After the purchase, technology continues to influence how users interact with their vehicle. Ford SYNC  gives users voice activated technology that melds the car with smartphone apps, Waze, and Alexa to name a few.

But by far, the greatest technological integration has been the automation of the vehicles themselves. What was once only science fiction is now being developed by brands like Tesla, Volvo and Ford.

Source: Volvo

A Forbes article notes that this new technology will allow accidents and insurance costs to decrease dramatically in the next 10 years. Saving consumers “upwards of one trillion dollars” and “more than 900,00 lives

The autonomous driving movement has a long way to go, both in advancing the technology and overcoming the regulatory barriers in place. However, it’s clear that self driving technology is the future.

Conclusion

These are just a few examples of how companies that have their finger on the pulse of CX are able innovate and implement impactful change that results in a profitable future.

Kudos to Volvo, who has been a recurring example in this article with their diverse investments to address the changing expectations of today’s market in a profitable manner. By implementing strategies to meet the changing trends, their greatest accomplishment has been to anticipate the waves of change before they crash.

LEarn about the A.I. Survey Blizzard uses to measure their cx ›

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