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Part 6 – Aftersales: A collaboration between automakers and dealerships

By September 29, 2014February 6th, 2017Think Tank

In last week’s blog series, we discussed about how two-thirds of vehicle service is lost after the third year of warranty, and how Aftersales processes needs to be improved in order to retain customers.

In this week’s blog article, we will continue to discuss how customer retention can be improved when automakers and dealerships form a more collaborative partnership in order to achieve brand solidary and a standard customer engagement process.

“The big issue with us is that we have hundreds of franchised operators and apart from our standard dealership agreement, we have no control over their behaviour.”

Starting from Now

In recent years, automakers have initiated global campaigns to improve dealership Aftersales. While this is a step in the right direction, there are still many improvements to be made. Customer attrition rates range from 50 to 70 percent after the warranty period lapses. While modern customer lounges and ‘free Wi-Fi’ are appreciated by a few, these haven’t changed the attrition percentage. Customer engagement processes remain discrete tasks that have a high degree of variability and an insufficient capacity to establish deep trust in the dealership.

Automakers are aware that customers’ dealership experiences strongly influence their next vehicle purchasing decision and loyalty to the brand. Accordingly, good Aftersales functions are perceived to be a key pillar to customer retention and brand loyalty. Currently, dealerships are at varying levels of implementing changes to their Aftersales processes that will increase Aftersales retention. It is accepted that more emphasis must be placed on creating cohesive dealership-customer engagement processes, but costs are tight for new tools and changing habits comes slowly.

Vision of the Future

In 2020, automakers and dealerships will be drawn more closely together, united by a common need for brand solidarity and increased productivity in the face of greater competition. The Aftersales strategy will become part of core product planning, instead of sitting on the side as an afterthought. Just as designers and engineers plan every aspect of vehicle production and service maintenance, the ownership experience will also be planned, facilitated, and managed from start to finish and beyond.

Automakers and dealerships will create an effective ‘customer loyalty loop’, sharing information and collaborating for the greater good of customer retention and profitability. Future vehicle owners will expect nothing less. The standard has already been set with the way consumers interact with many technology customer service departments.

For the consumer, Aftersales will be part of the product they buy and real-time access to vehicle information related to service, parts, and warranty will be a given. This will mean fully automated service forecasting and reminders, the convenience of 24/7 service quoting and booking, communicating in their preferred language, and interaction between the vehicle and the dealership. In short, the customer experience will mean being fully informed, in control, acknowledged, and appreciated.

Bridge to the Future

automaker-collaboration-handsBridging the current state and future vision comes from achieving a close alignment between automaker and dealership customer engagement strategies. This shifts both parties to a more collaborative approach that focuses on creating a great customer experience at all levels of customer interaction.

Competitive forces will compel automakers and dealerships to stop the perennial argument about ‘whose customer the vehicle purchaser is’. The purchaser is the customer of both at the same time. They will acknowledge that the customer doesn’t accept they are owned by any merchant, and their patronage is solely given based on the level of satisfaction and trust they experience with a vendor each time they make contact. As automakers and dealerships reconcile to fully cooperate on the delivery of a consistent global brand promise, they’ll increase their interest and commitment to the owner/prospect.

Accordingly, customer engagement processes inside and outside dealerships will become structured and supported by process guidance tools and smarter data and information – Big Data. Automakers and dealerships will support a standardised industry data pool to be used by trusted ITPs, which will enable innovative solutions and dealerships to provide very targeted and personalised customer engagement.