Informed customers call for empowered sellers
Today’s customers are more knowledgeable than ever. They are in the driver’s seat of the negotiation, walking in and expecting an average of 10 percent in discounts, regardless of whether they are shopping for standard or premium vehicles. This confidence stems from their newfound accessibility, mostly online, to industry pricing, offers and statistics.
Price transparency has increased dramatically in the past five to 10 years, with various e-commerce portals for vehicles sprouting up all over the world. Customers no longer walk into a dealership blindly but rather arrive well-informed and well-armed with pricing intelligence and quote comparisons.
Dealers need to be equally prepared with data and insights as those they are serving, yet they lack the resources necessary to build an intelligent and agile customer experience platform. OEMs and NSCs depend on the survival of their dealer networks and are in the perfect position to offer dealers the organizational, operational and technological guidance they need to evolve from a sales mindset to one that also strives to boost customer lifetime value.
Adopting an intelligent and agile incentives system
Tackling the traditional incentives system first is only natural given that it personifies the automotive industry’s main hurdle and hope for the future: customer centricity. A huge disconnect lies between a customer’s interactions with digital channels and their experience with the dealer, not to mention the gap between the customer data that OEMs and NSCs hold compared to dealers.
Customer segment data sits with the OEMs and NSCs, while dealers withhold specific customer data, making these datasets difficult to match and apply throughout the customer experience. This is where most customer frustration is born during the vehicle purchasing process: with each new interaction, the customer starts his or her journey often from the beginning.
The customer is not the only one that suffers. A more strategic, intelligent and collaborative approach to customer relationship management is the big-ticket path to increased efficiency and revenue for OEMs, NSCs and dealers alike. Multiple manufacturers have admitted that incentives make up a large portion of overall cost, if not the largest. And, since margins are already small and markets continue to shrink, a revamped incentives system has become the first step toward future network profitability and longevity (see Figure 1).