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

22 May 2018 Authored by 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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