Best PracticesAug 29th, 2023

Expand personalized customer experiences beyond the showroom

Steve Schmith ONE

One thing is certain in the automotive industry: Change. While the supply-chain crunch is easing, the vehicle mix has changed, with fewer sedans, more trucks and SUVs, and a higher proportion of electric vehicles – along with the prospect of financial incentives for those ready to buy them. At the same time, rising inflation and interest rates may cool demand and encourage people to hold on to their current vehicles. 

In this dynamic market, customer experience reigns supreme. Buyers want the same seamless and tailored experiences they get in other sectors. Whether ordering their skinny half-caff vanilla latte via an app and finding it waiting for them at the coffee shop or customizing the latest smartphone online for next-day delivery, people expect a high level of personalization. And the dealers that offer customers these experiences will be one step ahead. 

Our 2023 Automotive Customer Experience (CX) Study explores the experiences and expectations of customers on the car-buying journey. Of the 1,500+ vehicle owners we spoke to, 69% purchased a car in the last three years, and 73% bought from a franchised dealer. So, what does it reveal about personalized CX?

The in-person experience still matters 

The message that came out loud and clear was that people still value the human-to- human dealership experience. While affordability and vehicle features do much of the hard work, almost 60% said the dealership experience had the greatest influence on their purchase decision. And over 80% said their in-person sales experience was personalized to some extent. 

This isn’t surprising. As dealers, you’re experts at understanding what the customer in front of you needs and closing the sale. It’s what you’ve done successfully for generations.  

Digital experiences are a missed opportunity

Where personalization falls short, however, is in the digital experiences that support dealership visits. Less than a third of survey respondents felt they got a very personalized experience on the dealership website or when interacting via text, chat, or email.  

This is a missed opportunity to deliver seamless interactions across all devices and when moving between online, offline, and in-person experiences, which around half of respondents see as important. And as this feeling is stronger in the younger Millennial and Gen Z generations, its significance will only increase.  

Dealers need a mindset shift

Extending exceptional in-person experiences across the customer journey requires a shift in mindset and an understanding that customer expectations and behaviors are changing. For instance, buyers are showing up at the dealership much better informed than previous generations. 

While some still follow the traditional purchase journey, starting with the test drive, others have turned this journey on its head. They’ve done all their research online, decided what vehicle they want – right down to their wheel and tire package – and got their financing in place before they even visit the dealership. 

In this newer iteration of the customer journey, the test drive is the endpoint, a validation of their choice, and a mere formality before they sign the papers and get on their way. In the past, the test drive was the buyer’s time to get a feel for the car. Today, it’s increasingly their opportunity to test you – the dealer – as you earn the right to sell them a vehicle they already know a lot about.

Data drives personalized experiences

Understanding what customers want and value is essential to delivering seamless, personalized CX, and data is the key to this customer understanding. 

Sure, some data can be hard to access in the fragmented auto industry. When a buyer builds their ideal vehicle on the manufacturer’s website, for example, the dealership will never get hold of the specifics, which puts you on the back foot when that buyer arrives at the showroom.

But there are still plenty of data points you can act on to create relevant joined-up experiences. Many of our survey respondents felt tailored interactions based on their communication preferences, interests, and needs, or previous history would positively influence their purchase decision. Even something as simple as linking up sales and service records can help to understand where customers are on their purchase journey. 

A touch of caution is necessary here, though. Personalized communications based on life changes and family composition had a lesser impact on intent and could be seen as too invasive. So, you might want to avoid those “Hey, Empty Nester, you can finally buy that sports car!” messages.

The value of long-term loyalty

Personalizing the customer experience is a long-term investment, as a massive 74% of buyers said their last auto purchase experience will influence their next purchase. Acxiom analysis reveals that for dealers who get it right – effectively engaging customers throughout their car-buying lifetime – the revenue opportunity per customer is just shy of $200,000.1 

The industry is facing many challenges, but there are still opportunities for growth and success ahead. By expanding personalization beyond the showroom and acting on the data available to create seamless experiences that span online and offline interactions, dealers can tailor their products and services to each customer’s unique needs and preferences. This strategy can increase satisfaction, drive loyalty, and nurture lifelong customers.

1: Calculations based on publicly available information.

    Steve Schmith is the Senior Director of Automotive Strategy at Acxiom, helping brands acquire, retain and grow relationships with customers through the ethical use of data. 

    An innovative experimentalist, Steve helps automotive marketers better understand and engage their customers through data-led storytelling.

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