Measuring Effectiveness of Automotive Customer Engagement

VIEW POINT

MEASURING EFFECTIVENESS OF AUTOMOTIVE CUSTOMER ENGAGEMENT

Consumers are significantly increasing spending on experience-based services. Automotive customers are engaging more at all stages in a vehicle’s life cycle – from pre-sales to sales, usage on the road, and post-sales. This paper introduces a maturity model to assess customer engagement for automotive OEMs and recommendations to move ahead. External Document © 2019 Infosys Limited In a study the authors refer to, Measuring effectiveness 78 percent of millennials prefer to Digitizing the journey spend on a desirable experience rather of automotive customer than physical goods. map engagement The automotive sector is moving The journey map is the series of touch from a product-based business model points or interactions the original Following the agrarian, industrial, to mobility as a service. The next equipment manufacturer has with the and service-based waves is the wave in this transformation is the customer across the end-to-end life ‘experience-based’ economy,1 which experience of customer engagement, cycle: pre-purchase, sales and delivery, is predominantly digital. Businesses both outside the vehicle and inside and after-sales. Original equipment cannot just add a technology wrapper it during a journey. In order to assess manufacturers (OEMs) need a around a traditional service to realize and monetize the experience, it is structured methodology to design the full benefits of this new economy. important to map it from start to and implement a successfully digitized Instead, leaders need to design processes finish, covering all points of interaction journey map, with the right set of to develop experiences that meet customer with metrics for measurement. General frameworks, tools, competencies, and needs and increase their ability to charge fees Motors has a business goal to be the partnerships. and improve loyalty. best in customer experience, not just The three players in the journey map are in automotive, but across industries. OEMs, dealers who fulfill vehicle sales and service, and end customers. The experience-based “We strive to earn customers for life by providing great customer experiences across Figure 1 shows the shift of activities economy journey maps.” across the three stages in the life cycle from what was offered traditionally to Experts differ in their opinions on the – Mary Barra, the new offerings when digitized. OEM size and growth of the experience CEO – General Motors maturity in this customer engagement economy, but it is a segment that digitization journey can be assessed cannot be ignored. In a recent World using well-defined parameters. Economic Forum article,2 the authors discuss the importance of designing experiences so that that they are inclusive for all segments of society.

Figure 1. Transforming the journey map to new digital avenues for customer engagement

Pre-purchase Sales and Delivery After-sales Traditional Physical vehicle Standard Needs-based Vehicle Reactive, on- Intermittent offerings experience models and information ownership demand service connectivity at dealer features sharing on or maintenance to car showroom or offers website New digitized Immersive Customized, Well-informed Subscription- Predictive Seamless offerings virtual personalized customer based or shared maintenance, ongoing experience features mobility services upgrades over along with bundled with the air digital channels product and social media for feedback and reviews

maturity model Technology Strategy The maturity assessment model consists of six evaluation parameters to assess the OEMs’ digital readiness. People and Analytics and data Customer engagement agility organization and innovation are assessed and categorized on six parameters: technology, strategy, people and Dealer enablement Digital marketing organization, analytics and data, dealer enablement, and digital marketing. These parameters are shown in Figure 2. The parameters look beyond technology to the people aspect, along with the suitability of the initiative for the overall strategy of the organization and how Innovation introduces new ideas, well dealers are enabled. They also look at how effectively digital technologies and agility is required to quickly help and data are used for decision-making in specific areas such as marketing. diverse stakeholders make decisions OEMs can be categorized into one of the following maturity levels as shown in and launch feasible ideas in the Figure 3, for each parameter individually and at an overall level: market. Both innovation and agility are important to design and implement 1. Visionary 3. Adopter customer engagement. 2. Initiator 4. Traditional

External Document © 2019 Infosys Limited To determine maturity level, questions Figure 3. Maturity model categories are asked across the six digital maturity parameters. Using weighted scoring, a rating is determined for each parameter (1-5, 5 being Initiator Visionary highest). The overall score is used to start digital journey leverage integrated identify maturity level for customer High with integrated digital technologies engagement. For example, a 2.2 Agility systems and master across customer rating and 4.1 Innovation rating yields data model touch points categorization as an Adopter. ility Ag

Traditional Adopter maintain siloed Low carry out pilots for applications with enhancing customer traditional methods connections

Low High Innovation

2. Initiator Features for the comfort and safety of Maturity model — Tata Motors has one of the largest the driver were included along with user bases of customer relationship monitoring of their human functions Technology examples management applications for and parameters during a drive. 1. Visionary functions related to customer and Adient used its proprietary study of BMW has used immersive technologies dealer management.3 Deployment anticipated seating needs in 2030 and such as augmented reality/virtual started in 2003, and by 2018, the beyond to demonstrate how vehicle reality at all stages of car development, company had included more than interiors will be affected by new forms with customers involved as well. 15,000 dealers on this platform. of mobility. Its AI18 concept seating Virtual prototypes can be built to see This integrated system has helped system offers flexibility to match a what a specific set of components will Tata Motors consolidate customer specific type of driving condition — look like when assembled together. and vehicle data into one system. communication mode with passengers It provides real-time information, facing each other for meetings, cargo AR apps give an immersive experience enables analytics, and supports mode with retractable seats, baby to potential customers in a showroom, critical decision-making. Dealers mode with seats that can turn 180 allowing them to interact with a full- are empowered, resulting in better degrees for interaction and lounge scale virtual version of a car to try out sales and service as well as improved mode for relaxation. Such seating different color combinations, features, customer experiences. systems are tried out in small trials and configurations. Customers can and are examples for digital adopters. have a virtual driving experience 3. Adopter wearing AR glasses. AR-enabled repair Automotive seating system supplier 4. Traditional manuals provide virtual instructions Adient demonstrated its ‘seating Dealerships have been a primary for repair, superimposed on top of tomorrow’ concept where car seats resource for new and used car the physical part that needs attention can be converted from a comfortable sales, maintenance services, and when a smartphone is pointed at the and safe place for the passengers to replacement parts. Dealers across the place requiring work. a workstation, a relaxation zone or globe have adapted to technology resting positions.

External Document © 2019 Infosys Limited changes at varying paces. At a broad reach specific customers. Workflows level, they rely on traditional means Success through were redesigned and implemented to of lead management and customer ensure a seamless information flow, experience. In terms of repair and integrated customer to anticipate and eliminate the pain maintenance, the focus has been on points of all stakeholders. reactive and corrective maintenance. journeys The automotive industry is The use of online channels for retail, A global leader in automobiles experiencing several simultaneous OEMs venturing into car subscriptions wanted to increase new car sales by disruptions. Customer engagement and rentals, and ride-sharing services improving customer experience and can be considered an innovation have started to make a significant brand recall. The OEM undertook that needs not just new technologies impact on retail business. Most dealers a digital transformation, with a but also a different way of looking rely on OEMs to manage vehicle customer-centric approach as a central at the product. For an industry that data. This limits their capabilities for component. The major challenges has pioneered traditional tools to predictive or proactive services. were the lack of a single view of a understand customer requirements customer with multiple profiles in Dealers are evaluating how to reinvent and product features, it will be an different systems, leakage of leads their business model through the interesting opportunity where going due to the absence of a dedicated adoption of digital technologies, and forward all customer needs are not system, lack of a single touch point this includes scale considerations. tangible. A maturity assessment for customer inquiries, no system to model can assist car makers to According to the National Automobile track customer journeys from inquiry 4 objectively judge where they are, their Dealers Association’s report, dealers to purchase and service, and minimal competitive position, and their future without a chain of stores have experienced or no integration between systems for a significant financial decline in the United trajectory. data flow. States, with around 18 percent closing between 2012 and 2018. Due diligence to understand as-is Economies of scale or a network of systems and processes was followed stores will play an important role by tracking the customer journey at to develop customer engagement each touch point from presales to capabilities. after-sales. Marketing budgets were optimized with targeted campaigns to

External Document © 2019 Infosys Limited External Document © 2019 Infosys Limited References: 1. Pine, Joseph B. II, Gilmore James H., “Welcome to the Experience Economy,” Harvard Business Review, July-August 1998 2. Yaffe, Jonathan; Moose, Andrew; Marquardt, Dana, “The experience economy is booming, but it must benefit everyone,” Jan. 2019 https://www.weforum.org/agenda/2019/01/the-experience-economy-is-booming-but-it-must-benefit-everyone/ 3. Tata Motors Dealer Outlets Deploy Oracle Siebel CRM https://www.firstpost.com/business/biztech/tata-motors-dealer-outlets-deploy-oracle-siebel-crm-1861519.html 4. NADA Data 2018 — Annual Financial Profile of America’s Franchised New-Car Dealerships https://www.nada.org/WorkArea/DownloadAsset.aspx?id=21474855962

Authors Sanjeev Kumar S Ramachandran Principal Consultant – Manufacturing Principal Consultant – Infosys Knowledge Institute [email protected] [email protected]

About Infosys Knowledge Institute The Infosys Knowledge Institute helps industry leaders develop a deeper understanding of business and technology trends through compelling thought leadership. Our researchers and subject matter experts provide a fact base that aids decision making on critical business and technology issues. To view our research, visit Infosys Knowledge Institute at infosys.com/IKI

For more information, contact [email protected]

© 2019 Infosys Limited, Bengaluru, India. All Rights Reserved. Infosys believes the information in this document is accurate as of its publication date; such information is subject to change without notice. Infosys acknowledges the proprietary rights of other companies to the trademarks, product names and such other intellectual property rights mentioned in this document. Except as expressly permitted, neither this documentation nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, printing, photocopying, recording or otherwise, without the prior permission of Infosys Limited and/ or any named intellectual property rights holders under this document.

Infosys.com | NYSE: INFY Stay Connected Infosys.com | NYSE : INFY Stay Connected