Customer service will be central to auto firms' competitiveness in future

22 May 2018 Consulting.us

As digital firms look to edge in on the auto market, current manufacturers will need to match their customer service to that of customer-centric firms like Apple and Google. A recent study looks at the shape of customer expectations and preferences in terms of customer service within the automotive sector.

Businesses are beginning to realize that customer service is a key part of firms’ attractiveness to customers, and can be a deciding factor in whether one brand is chosen over another. As ‘customer-oriented’ tech firms like Amazon, Google, and Apple continue to lead the market in terms of customer experience and service – while banking profits hand-over-fist – other industries are taking notice. With the distinct possibility of Apple or Google cars on the horizon, the automotive sector is particularly concerned about crafting a competitive customer service experience.

Global IT consultancy Capgemini recently released a report on the customer service landscape in automotive as part of its Cars Online 2018 study. The survey gathered responses from 838 people in the US, China, and Germany, while also interviewing car manufacturer executives. The study uncovered insights into the importance of customer service, as well as consumer expectations and their preferences in channel mix, company contact, and data sharing. The study also revealed the regional differences in automotive consumer preferences.Reaction to bad customer serviceCustomer service is something that no automotive firm (nor most companies) can ignore. Indeed, over 50% of US respondents in the Capgemini study said that they would look for another dealer if they experienced poor customer service. This likely reflects the American market’s preference for dealerships as a primary contact point, as opposed to other countries where OEMs interact more directly with customers. Furthermore, almost 40% of Chinese respondents said they would change car brands in response to poor customer service.

Customers can’t be relied upon to contact companies about the service issues, with less than a third saying they would contact the dealer or manufacturer. Fewer still are willing to accept the poor service – in the survey’s case, a ‘delay’ – though German clients are slightly more likely to take it on the chin.

Previous Capgemini research reveals that 61% of customers who receive a positive shopping and service experience are willing to spend more money – up to 24% more. Taken with the above results, it seems that good customer service can have a direct impact on a firm’s sales. Indeed, according to the study, the customer service effect on a firm’s bottom line could even approach the importance of product quality.The customer service of digital leaders vs automotivePeople’s customer service expectations have risen as a result of the customer-oriented policies of leading digital firms like Amazon. With the potentially entrance of some digital firms into the automotive market, car manufacturers need to step up their game. “OEMs need to learn from internet companies such as Apple and BAT,” said Lu Ting Head of CRM and BI, GM Shanghai. “In particularly they should imitate their corporate culture, with its strong focus on customer experience.”

The study results show that auto firms are good at customer service basics, seen by respondents as having polite and competent employees, as well as good service performance. However, ‘innovative’ customer service criteria which differentiate a firm are more associated with digital leaders like Amazon, Apple, and Google. The digital firms’ service is seen by respondents as proactive, multichannel (including mobile and web-based, in addition to traditional channels like phone), quicker, and of better quality.Expectations about customer serviceThough consumer expectations about customer service are broadly similar among the three countries, there are some notable variations. ‘Talking to a real person’ is especially important to US respondents, with 80% expecting it – in contrast to 43% in China. US respondents also valued the ability to track the status of their issue, with 55% expecting it as opposed to 48% of both German and Chinese respondents.

Chinese respondents are relatively more desiring of a personalized customer service experience, with 63% expecting an agent who suits their personality and needs, and 45% expecting the availability of their preferred communication channel.

Chinese respondents were twice as likely to expect proactive contact from their car dealer than German respondents. This is perhaps linked to the fact that Germans seem to place higher value on privacy than many other nationalities.Channel preferences according to type of customer requestIn terms of how consumers wish to resolve different customer service problems, respondents’ channel preferences were broadly similar, though with some noteworthy differences. Telephone was the most preferred method to resolve urgent technical problems and complaints, which most customers want to explain personally. However, Germans were most likely to prefer email-based solutions, with 63% mentioning it for information issues, and 68% for complaints. Capgemini surmises that this is perhaps because they prefer having written documentation of their issues.

Though telephone solutions remain popular, Chinese customers seem to show a greater affinity for a broader channel mix across all types of issues, perhaps reflecting emerging economies’ greater openness to new technology. Telephone and email generally remain the most preferred methods for resolving customer service issues across regions and issue types, though there is a growing acceptance of digital channels like websites, blogs, and web chat for less-pressing problems like getting information.

In terms of when customers want to be proactively contacted by OEMs or dealerships, customers prefer to be contacted only when there is a real benefit to themselves. Respondents were more receptive to being contacted for issues related to maintenance, service offers, and the end of contracts; few were receptive to marketing communications like new product launches and brand news. However, Chinese survey respondents were broadly more accepting of all proactive contact from OEMS and dealers.Willingness to share personal informationCustomers in all three countries were willing to share personal data for relevant benefits, though there was variation in what customers wanted in return for sharing data. Overall, Chinese respondents were most open to sharing personal data, while US respondents were most reticent. The most mentioned benefits were price reductions and maintenance alerts, valued by about 50% overall.

Almost three-quarters of Chinese respondents were willing to share personal data for maintenance alerts, with all other benefits being acceptable trade-off to a majority of Chinese respondents. German respondents’ willingness to share data was broadly similar to US customers, being most likely to share data in return for price reductions – though Germans were also receptive to premium service and personalized offers.

All customers, however, desire transparency in how their data is used. 82% of US respondents said transparency in the use of their personal data was ‘important or very important’ to them, with 84% for Chinese respondents and 71% for Germans.Customer service vs customer dialogue managementTo safeguard their market position against competition from digital leaders, Capgemini believes that auto firms need to strengthen their customer relationships, creating lasting positive experiences that increase customer loyalty.

The report states that “customer service needs to be individual and personal, and to be consistent across all channels and all locations.” Instead of using a ‘scattershot’ approach, firms need to target individuals with the right offer at the time through the right contact channel – something called ‘dialogue management.’ This approach clearly requires a degree of resource investment and well-implemented stores of extensive and pertinent data.

“In this ecosystem, the customers get everything they need, with 24/7 availability and ultimate reliability,” commented Daimler AG Vice President of Global Service & Parts Operations Holger Suffel. “That’s the magic formula.”

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Consultants can increase productivity with automated vehicle programs

16 January 2019 Consulting.us

More and more people – including consultants – are driving their own cars for work. According to the U.S. Department of Transportation, the personal vehicle comprises 81% of all business travel. Whether it’s to meet with clients, attend industry conferences or participate in other field-related duties, no work-related travel method comes close. Tim LeBrun, Senior Regional Sales Executive at Motus, explains how consultants could increase their productivity with automated vehicle programs. 

Advisors and independents consultants often spend large portions of their time on the road. They commonly meet with clients onsite or review progress with them until a project is complete. If a client is local, this can mean several trips between the consultant’s home and the client’s office each week. Large amounts of paperwork – including mileage logs and recaps detailing how the consultant spent his or her day – accompany these trips. These logs ensure consultants are compensated fairly for any business-related expense incurred as a result of their work.

Unfortunately, many consulting firms still use manual, tedious and time consuming processes that eat up productivity. Consider this: if each employee spends just 12 minutes a day manually tracking their mileage, that equates to a full hour of work in one week or 52 hours a year. That’s more than a full week’s worth of work spent on basic data entry alone. 

While trite, the time-old adage “time is money” rings true for many consultants. The less time they spend tracking mileage by hand, the more they can spend completing billable work on behalf of their clients. As such, consulting firms need to think strategically about the processes they use to reimburse employees for any driving expenses incurred while on the job.

Consultants can increase productivity with automated vehicle programs 

From Excel Spreadsheets to Vehicle Programs

In today’s increasingly mobile world, many consultants choose to use their personal cars for business. When reimbursing for the business use of personally-owned vehicles, firms can implement vehicle programs that track, process and compensate their employees without all the tedious work that manual reporting entails. There are three major vehicle program options that provide vehicle reimbursement for companies whose employees choose to drive their own car for work. These include:

Cents-per-Mile (CPM) Programs

These programs reimburse workers at a cents-per-mile rate for business travel in their personal vehicles. This program works best for firms whose consultants drive 5,000 miles or less each year. Workers tend to be over reimbursed if their mileage is significantly higher. 

Flat Car Allowances

These programs reimburse all consultants and staff the same dollar amount. How many miles they actually drive has no impact. Everyone receives the same – for example, $500 per month. While these programs are simple to implement and require no mileage tracking whatsoever, they are not the most accurate – or fair – option available. Employees can drive a varying number of miles based on how far their clients are, how often they need to visit clients and the length of their project. For example, one advisor may drive 500 miles per month while another drives 900 per month. Paying both employees the same amount means that the low-mileage worker may be overpaid and the high-mileage worker is underpaid. Neither is good for employee morale or a firm’s bottom line. 

Additionally, flat car allowances are subject to both Federal Insurance Contributions Act (FICA) taxes and income taxes. This means that providing a flat car allowance of $500 costs an organization $538 after taxes, while employees end up taking home roughly $330, depending on their tax bracket.

Fixed and Variable Rate (FAVR) Programs

These programs provide a customized reimbursement to each worker based on their monthly business mileage and individualized fixed and variable costs. While mileage is perhaps the biggest expense, workers incur a whole host of additional expenses as they drive. These include fuel, maintenance costs, insurance premiums and depreciation. All must be accounted and reimbursed for. By reimbursing each employee based on the true cost of operating their vehicle, FAVR is the most accurate and fair of the vehicle program options. 

In addition, FAVR reimbursements can be paid tax-free – meaning firms spend less in taxes, while employees can take home the full amount of their reimbursement. 

Location-based technologies

To maximize vehicle program efficiency, firms should also consider implementing location-based technologies in conjunction with their program. These technologies automate mileage tracking in the field so that trip-by-trip mileage can be calculated more accurately. They also digitize travel data, including route optimization, trip and stop durations, and territory efficiency. This allows their employees to optimize driving patterns, improve procedures and ultimately maximize their productivity. When paired with a FAVR program, automated technologies are able to calculate reimbursement rates for each employee based on data that tracks exactly where that employee drives and how much they drive. 

The math is simple: the less time consultants waste, the more they can get done and the higher the margin of a consulting firm. For consultants looking to reduce the number of hours they spend on administrative work to increase their billable hours, leveraging automated technologies with the proper vehicle program can set them on the right path.