Measuring Effectiveness of Automotive Customer Engagement

By Sanjeev Kumar, S Ramachandran May 2019   |   Article   |   9 min read   |   Email this article   |   Download
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.
Measuring Effectiveness of Automotive Customer Engagement

Following the agrarian, industrial, and service-based waves is the ‘experience-based’ economy,1 which is predominantly digital. Businesses cannot just add a technology wrapper around a traditional service to realize the full benefits of this new economy.

Instead, leaders need to design processes to develop experiences that meet customer needs and increase their ability to charge fees and improve loyalty.

The experience-based economy

Experts differ in their opinions on the size and growth of the experience economy, but it is a segment that cannot be ignored. In a recent World Economic Forum article,2 the authors discuss the importance of designing experiences so that that they are inclusive for all segments of society.

In a study the authors refer to, 78 percent of millennials prefer to spend on a desirable experience rather than physical goods. The automotive sector is moving from a product-based business model to mobility as a service. The next wave in this transformation is the experience of customer engagement, both outside the vehicle and inside it during a journey. In order to assess and monetize the experience, it is important to map it from start to finish, covering all points of interaction with metrics for measurement. General Motors has a business goal to be the best in customer experience, not just in automotive, but across industries.

“We strive to earn customers for life by providing great customer experiences across journey maps.”

– Mary Barra,
CEO – General Motors

Digitizing the journey map

The journey map is the series of touch points or interactions the original equipment manufacturer has with the customer across the end-to-end life cycle: pre-purchase, sales and delivery, and after-sales. Original equipment manufacturers (OEMs) need a structured methodology to design and implement a successfully digitized journey map, with the right set of frameworks, tools, competencies, and partnerships.

The three players in the journey map are OEMs, dealers who fulfill vehicle sales and service, and end customers.

Figure 1 shows the shift of activities across the three stages in the life cycle from what was offered traditionally to the new offerings when digitized. OEM maturity in this customer engagement digitization journey can be assessed using well-defined parameters.

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

Transforming the journey map to new digital avenues for customer engagement

Customer engagement maturity model

The maturity assessment model consists of six evaluation parameters to assess the OEMs’ digital readiness. Customer engagement agility and innovation are assessed and categorized on six parameters: technology, strategy, people and organization, analytics and data, dealer enablement, and digital marketing. These parameters are shown in Figure 2.

Innovation introduces new ideas, and agility is required to quickly help diverse stakeholders make decisions and launch feasible ideas in the market. Both innovation and agility are important to design and implement customer engagement.

Figure 2. Customer engagement model parameters

Customer engagement model parameters

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 well dealers are enabled. They also look at how effectively digital technologies and data are used for decision-making in specific areas such as marketing. OEMs can be categorized into one of the following maturity levels as shown in Figure 3, for each parameter individually and at an overall level:

  • Visionary
  • Initiator
  • Adopter
  • Traditional

Figure 3. Maturity model categories

Maturity model categories

To determine maturity level, questions are asked across the six digital maturity parameters. Using weighted scoring, a rating is determined for each parameter (1-5, 5 being highest). The overall score is used to identify maturity level for customer engagement. For example, a 2.2 Agility rating and 4.1 Innovation rating yields categorization as an Adopter.