Insight

COVID-19: What’s Next for Automotive?

While OEMS have made some inroads in the services space, they are still vying for business models that are profitable and scalable in the long term. Audi’s concierge-based car rental service, Silvercar by Audi, is one mobility service that has succeeded in test markets due to reasonable rates, an app-based reservation system and fleet of well-equipped silver Audi A4s and Q5s. Additionally, platform-based companies like Sixt and Fair.com have entered the automotive market along with existing platforms like Zipcar in the U.S., offering user-friendly apps and subscription services for vehicle rentals, car sharing, ride-hailing and leasing. Alyssa Altman, senior vice president, transportation and mobility, Americas, advises that OEMs focus on what customers expect, and then exceed those expectations. She says, “Customers are looking for flexibility and there are several new players entering the market to meet this need. OEMs have to catch up in the services space in order to maintain market share as well as the connection to the customer.”

Once in-person channels are operational, pre-sales, sales, after-sales, used car sales and mobility services across online and offline channels must be integrated to provide a frictionless customer experience. At the same time, OEMs are facing cost-cutting measures internally, increasing the importance of efficiency and better decision making. In order to spur growth with less resources over time, OEMs must lean on data and analytics to inform targeted investments in activities, content and channels across the customer buying journey.

One way to achieve this is through a customer data platform (CDP) to collect, store and unify customer information in order to:

1. Impart deeper customer insights fast enough to outperform broad-scale marketing
2. Enable an omnichannel experience while maintaining data privacy
3. Infuse customer-centricity throughout teams, departments and channels

By combining their customer relationship management (CRM) platforms, data collection systems and analytics tools under one CDP, OEMs will have access to a 360-degree view of their customers where every customer interaction and touchpoint is informed by and generates customer intent. The conventional focus on sales transactions will shift to a focus on experience and ultimately customer lifetime value.

According to Matthias von Alten, global head of strategy, transportation and mobility, OEMs have to take a dual approach: 1) centralize and analyze data across all touchpoints into one data lake and one tech platform and 2) break down siloes between channels and key players from headquarters down to dealers. “This is not easy, but it is essential. When OEM headquarters, national sales companies, importers and dealers all work towards the same set of key performance indicators, we’ll start to see better collaboration and greater efficiencies. Functioning as one organization with shared data and goals will improve customer experience and ultimately increase sales and loyalty”, von Alten says.

The COVID-19 crisis comes as the automotive market has already set the wheels in motion for business transformation due to legal requirements and increasing standards of customer experience. While people will always have the need for mobility, they will also have higher expectations when it comes to service and will choose the OEM based on the experience and value they provide. While new customer acquisition remains important, customer retention and loyalty will be paramount for OEMs, as loyalty leads to customers re-purchasing from the same brand, and those customers are more likely to recommend the brand to others. By focusing on customer lifetime value, OEMs stand a better chance at recovering swiftly from the crisis, driving future growth and building resilience into their businesses. OEMs shouldn’t wait until the COVID-19 crisis is over, they should start their engines now.