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There’s a lot happening under the hood in automotive sales today. It’s a complicated business model to begin with: B2B2C involving original equipment manufacturers (OEMs), wholesalers and national sales companies, importers including retail and large dealer groups, local dealers, and finally prospects and customers.
HEADQUARTER (HQ): R&D, production, marketing and wholesale, financial services
NATIONAL SALES COMPANIES (NSCS) /IMPORTERS: Support marketing and sales, financial services
DEALERS: Buy vehicles from OEMs via NSCs/importers and then sell to the customer. New players are emerging in this role
CUSTOMERS: Research and purchase vehicles, take part in aftersales
The digital age has further increased the complexity of the sales model with the introduction of new sales channels and marketplaces, such as Amazon, Alibaba and Sixt. Among all of the key players in automotive sales, only a few are connected to the broader mobility ecosystem. In short, the process of purchasing and owning a car often leaves something to be desired for customers as channels remain disconnected.
Traditional sales models are not as effective in this new automotive landscape. With more flexible mobility options, many young people are dropping out of the traditional automotive market entirely. Overall sales rates have decreased, whereas competition over the same customers has increased—ultimately driving up marketing and sales costs. The industry is now at an inflection point; to maintain profitable growth, OEMs must adjust to this new environment.
The unprecedented number of concurrent challenges has created a perfect storm of disruption. Without swift and bold action, the OEM marketing and sales business model will face further problems in the form of diluted brands and decreased sales, overall profitability and customer loyalty. While customer acquisition remains important, customer retention and loyalty will be paramount for OEMs, as not only does it lead to a customer re-purchasing from the same brand, but because that customer is also more likely to recommend the brand to others.
Marketing and sales must shift from traditional, “set it and forget it” campaigns to continually optimized, personalized assets, touchpoints and experiences that deliver clear and frictionless value along the entire customer lifecycle. OEMs that remain siloed with a leaky sales funnel, fragmented sales channels and disparate data will miss these opportunities to create customer value and drive growth through existing and new channels.
To get to a modern, integrated sales channel model, automotive sales and marketing organizations 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. Functioning as one organization with shared data and goals will allow for improved customer experience—and ultimately increased sales and loyalty.
When OEMs and dealers consolidate data in one repository, they can establish a customer-centric, experience-driven business. Data management platforms allow OEMs to build the architecture for an inclusive ecosystem that supports all types of stakeholders. Transparent, integrated platforms unlock opportunities to increase both revenue and brand value through personalization, deeper engagement and interactions with customers, and greater relevance along the entire customer journey.
The goal is to have all sales channels (pre-sales, sales, aftersales, used car sales, mobility services, etc.) and off and online touchpoints integrated and backed by dataful decision-making to ensure a seamless experience. An integrated sales channel can be complex – breaking it down into its constituent parts allows for the bigger picture. Each part within the integrated sales channel should have its own set of interdependent key performance indicators (KPIs) in addition to those across the customer buying journey.
Once KPIs are established throughout the integrated sales channel and buyer journey, user feedback will be gathered to inform optimizations that can be made, which will then be tested again and further optimized to improve and personalize the customer experience. Each customer interaction generates data which is captured, acted upon and visible to the entire channel constituting a truly integrated, customer-centric sales channel.
Elevate the customer experience
Customer expectations are rising for all brands, and automotive companies must make car buying a seamless, enjoyable and value-added experience with the brand and the product from pre-sales to aftersales. Eighty percent of customers say the experience a company provides is as important as its products and services. Customers expect consistency, convenience and personalization across all channels and touchpoints, whether shopping for a car on their mobile device or in-person at a dealership. Manufacturers are getting creative, featuring cars in shopping centers and pop-up dealerships. Others are making store formats more appealing by offering small lounges or coffee shops within the dealership. The core idea is to encourage more meaningful and frequent interactions with customers.
Example 1: One global OEM is using digital to make the car buying experience easier for shoppers. Starting with one regional location, the company is creating a digital ecosystem including a concept store. Customers can shop for and even buy a car from the comfort of their home. They can also visit the concept store to test drive a car or learn about features from a mobility ambassador equipped with relevant customer and product data. Visitors may choose to buy a vehicle on the spot, having it delivered to the concept store, a local dealership or to their home.
Example 2: Audi City transforms the physical buying process into an experience where buyers configure their dream car. Audi City limits the number of models in the show room, but offers a world of opportunity for shoppers to experience every possible combination of configurations in the Audi portfolio. Potential buyers use multi-touch tables to select features and colors and view a life-size image of their Audi on the showroom wall. Shoppers can “see” under the hood to experience Audi engineering, and pricing and vehicle availability is accessible in just a few clicks. Audi City London drove a 70 percent increase in sales and optional equipment sales increased 20 percent.
Example 3: Tesla has the most loyal customers of any car company with a satisfaction rating of 90 percent; 80 percent of their customers buy or lease another Tesla for their next car. The company controls the entire customer journey, from the website and other digital channels to production, sales and aftersales. After test driving a car, potential customers can configure their car at the dealership or at home, putting them in control of their purchase with the option of consulting a delivery team to guide them through the process. The car is then delivered to the dealership, the customer’s home or at a delivery parking lot using what Tesla calls “touchless delivery.” In terms of aftersales, 80 percent of repairs can be done outside of a service center, mobile repair is free, repairs are made four times faster than traditional repair shops and software updates are made overnight.
Create efficient and effective marketing and sales
To remain effective in the face of disruptive new players and business models, the sales network will require a ground-up transformation that focuses on connecting the people, technology and operations across all of these participants. Integrated data platforms allow each entity to connect meaningfully with customers who have rising expectations. Whether they sell directly through key account managers, online or rely on a multichannel ecosystem built upon third-party partners, OEMs must manage the feasibility and profitability of each channel—and that is no simple task. The key question is how to optimize investments depending on a brand’s specific business model, product lifecycle, target audience, market and competitive landscape.
To meet these expectations, marketing and sales will need to create optimized and personalized digital assets and touchpoints informed by data and insights. It’s important to move quickly and flexibly with the market–at this stage, sales and marketing must shift to a mindset where experimentation and innovation are encouraged, gathering customer feedback along the way. Teams must listen, test, learn and iterate in real time; feedback from customer interactions not only results in the creation of better assets that meet specific needs, it allows them to get into market faster and refine as they go. And this must happen along the entire sales and marketing value chain, from headquarters to national sales companies and importers to dealers.
Once measurement, optimization and goals are implemented across the sales channels and buyer journey, the question of where and when to invest funds in things like marketing tactics and incentives will become less risky and more predictable. However, decisions on investments must be made considering various forces in the market, competitors and automotive lifecycles across all channels.
Key challenges faced today occur on a global scale and include duplicate work, lack of measurement, disconnected experiences and inconsistencies. This new approach to sales and marketing drives transparency, speed and flexibility through multi-disciplinary teams armed with data, allowing for the creation of global frameworks, standards and best practices that can be adapted locally.
What needs to happen next
It’s time for OEMs, national sales companies, importers and dealers to bridge the gap that will allow them to collaborate more effectively to create a data-driven, seamless experience for their customers across all the channels and buyer journey. The value chain needs to transform into a consumer-focused ecosystem to cater to the emerging consumer needs. OEMs must develop trust-based collaboration with dealers to learn together, pilot new ideas and decide what to do next to impact the bottom line for both entities. Collaboration and smarter ways of working can ultimately lead to profitability for all.
Define targets and goals for integrated sales marketing for the entire sales funnel.
Develop an integrated KPI framework backed by transparent data platform and dashboards.
Train employees on how to use the data platform.
Create a road map with value cases.
Set up an environment for dynamic content development.
Listen, test, learn and iterate on new ideas and share best practices within the sales and marketing ecosystem.
Develop a self-fulfilling ecosystem (processes, people, technology, data, workflows, etc.) to manage future sales.
Accelerate the change.
OEMs may hold the key to the automotive ecosystem, but true partnerships are essential. Digital has strengthened the connection between OEMs, national sales companies, importers, dealers and customers via online channels. However, digital has also made it so that customers expect the same level of innovation and personalized experience at the point of sale as well as aftersales. Marketing must prioritize experience and sales must make customer lifetime value the focus.
However, digital is only an enabler to modernizing marketing and sales. It’s one part of a broader effort to improve sales channels both online and offline. OEMs must fix disconnects by creating new ways of managing sales channels, building trusted relationships with dealers where data sharing is encouraged, collaborating with the automotive ecosystem to innovate, and by testing and gathering feedback on new ideas that have the power to transform ways of working.
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