Dennis Ephlin

Retail is NOT a physical location. RETAIL IS AN EXPERIENCE.  This statement may raise questions, prompt pushback, or lead to realizations. Retail across all industries began to shift long ago. We can credit or fault disruptors like Amazon for pushing the boundaries and expanding the concept of retail to include digital experiences. But even Amazon has blurred the line between physical and digital with pick-up/drop-off hot spots and a few retail store outlets. While I don't love the term "phygital," it conveys the idea that physical and digital are now blended and part of a single experience. Charles Dunstone, founder of Carphone Warehouse, stated that "the future of retail is the integration of internet and digital experiences and services with the retail network." This is an interesting perspective, but what does it mean for automotive retail? The industry was already experiencing a significant shift, which was further disrupted by the global pandemic. This disruption was compounded by a significant supply shortage that caused inventory issues. As a result, we are now facing fast-moving customer expectations and shifting business models in the industry. Despite the uncertain future, there are numerous paths to achieve greater value and opportunity. The questions become: what do we want to be, and how can we deliver it?  We must develop core capabilities to flex our muscles and future-proof our business. What could it look like? Sometimes it's easier to look outside of our own industry for examples and benchmarks to understand the actual experience and benefits without getting caught up in what can and can't be done in our own business. In the world of the Future of Retail, I would like to bring up Disney, perhaps surprisingly. Not the Disney store in your local mall, but the Disney Park in Orlando. If you've been there in the last 5-10 years, you've probably noticed the advancements in personalizing the entire experience. Here are a few highlights of what they provide (and the experiential capabilities): A personalized trip plan that's tailored to you and your family's needs and desires, created before you even depart for the trip Online and offline tools that work together to create a seamless experience The ability to meet the characters of your choice and highlight certain themes and areas of the park that are your favorites Suggestions on shows, pop-up meet-and-greets, and other immersive experiences to enhance the personalized engagement A connected bracelet is given or worn upon entry to the park to accommodate location-based services (tracking, payment, selected experiences) The ability to choose rides, preferred times of day, food selections, and other amenities in a planned and time-windowed preference Overall communication, alerts, and updates to facilitate the desired experience throughout the day. So, you say, that’s great, but what does that have to do with automotive retail or retail? I would suggest that this is exactly the future of the retail experience. Well, let’s break it down. It offers the basics of retail; goods and services available, shopping, buying, servicing, and experiences (that are very personalized). But it does it in a way that is so much more than transactional. This retail experience is: Personalized Needs-based Highly experiential Immersive Digital and Physical Supportive Memorable and ongoing (carries on after the original visit) Interactive …and extremely human-centric (despite all the bells and whistles, it is still focused on the people) Is there anything in the experience above that we think should not be possible or available in an auto retail experience? While the cost of Disney is getting extremely expensive, we still pay 10x-20x that amount for a vehicle transaction. Shouldn't acquiring a vehicle be as engaging, personalized, easy, delightful, memorable, and immersive as described by a customer? That's what we want in auto retail, yet we often fall short of these capabilities and benefits. While we may all agree that some or all of these elements would be desirable and beneficial, the challenge is in figuring out how to achieve them. So, what do we do? While recognizing the need for change and transformation is crucial, it's even more critical to determine how we can seize this opportunity and make it beneficial to our long-term success. How can we future-proof our business? I believe we need both a Mind Shift and a Business Shift. We cannot improve or achieve what we do not measure or set as objectives. The traditional measures of success in the automotive retail industry focus too heavily on transactional events. While sales, profits, and margins are important, the focus needs to be updated. To drive the necessary change and successful future business models in auto retail, we need a mindset shift. The following are some of the key areas where this shift is necessary: Experience-driven, not transaction driven Need Management over Lead Management Personalized, not mass marketed Customer-managed relationships (customer in control), not Customer Relationship Management (CRM) Human-centric, not Product-centric Omni-channel experiences, not one-channel events Human-centric, not product-centric Restructuring of Talent Management and compensation aimed at customers for life and experiences, not transactions. These may sound obvious, but without these as objectives, supported measurements, and infused into our business model and business processes, they do not happen. These must become our North Star view of success and capabilities. They also need measurement, training, focus, and ongoing innovation and support. Thus, next comes the business shift. We are witnessing numerous pilots and experiments in new retail storefronts and immersive design, as demonstrated by Porsche. We are also observing new sales and demand management models, such as regional warehousing and agency sales models. Additionally, we are seeing a greater influx of technology beyond traditional dealer management systems. As a dealer, it can be more effective to start with the customer and their current and future needs, rather than simply implementing massive business model shifts and new technologies. Customers desire mobility, personalized offerings that meet their journey needs, and an easy, trustworthy, and accessible process that fits their schedule and preferred channel. Therefore, to truly understand the customer, we must capture all relevant data and insights possible, to be agile and flexible in assessing and executing against their needs. Although dealers currently possess a lot of data, we lack a clear and visible view into one customer, one journey, with multiple needs. Furthermore, our current business model and capabilities do not make it easy for us to proactively respond and offer solutions to those customer needs. Unless the customer engages us, we typically do not discover and meet their needs until it is too late. Assuming that our goal and North Star is to enhance the customer experience beyond the basic transactional model of today, we need to align our data and insights, metrics and measures of success, people and training, processes and workflows, and tools and enablers to support that target operating model. Currently, a sequential, transactional, one-way experience is the norm, and trying to restructure outcomes from within that framework is ineffective. Instead, we must change the operating model and framework to align with the new definition of success. This is a simple concept, but not easy to execute. It requires clear goals, alignment, and an agile, ever-transforming process. Some of the key business shifts will include: More insightful use of data Processes and workflows focused on experience, not transactions New key metrics and objectives instilled and measured Talent Management and Reward structure in line with the objectives Building of agile capabilities aimed at customer experience and mobility access for customer A defined Target Operating Model to address the “to be” state …there is much more to continually do, but it does start with getting a clear vision of “your customer experience” and how you can deliver against that. Just start, and keep going. Never stop. Customers evolve. Their expectations grow. The industry of mobility is continuously transforming. We must continue to become “platforms of mobility access meeting customer needs wherever, and however, their personal journey requires it.” Steve Jobs said, “you’ve got to start with the customer experience and work backward for the technology.” I fully agree but would only add: “Start with defining your customer experience North Star, then build out the tools and processes to support it.” And never stop. The timing and delivery of your customer’s experience will be an ever-lasting, continuous journey, and one built as an enterprise capability (a muscle you can flex), not as a project, one-time program, or technology.

Disruption. One of the buzz words lately over-used and misunderstood. The standard business definition is “radical change to an existing industry or market due to technological innovation.”  I would argue is not always technological. And is that radical change good or bad? Is disruption good or bad?   The fact of the matter is,  DISRUPTION IS THE NEW NORMAL.   Whether we like it or not, as business owners, as consumers, as social citizens, we better embrace it. It is the new norm and will only continually cycle and accelerate.   If it is self-disruption, or at least a state of managed or accepted disruption, it can benefit our enterprise.  This agility and flexibility to take on disruption and capitalize through it and because of it, should even be a capability or culture that is driven in an organization. It will change the way customers expect products/services and experiences, it will change the way workers produce, and it will change the way we must manage our business models. In automotive, we could highlight a lot of major and recent disruptions. There is the pandemic effect amplified by home delivery and mobile service. There is the new mobility ecosystem accelerating around access to transportation on-demand. There is the new wave of EVs coming on due to many factors including gas and oil prices and a drive to a sustainable economy. Many technologies are disruptive to our previous industry and business models such as Cloud computing, Artificial Intelligence, Augmented and Virtual Reality, 5G and more. These technologies enable new experiences, real-time information, constant connectivity, and an overall overhaul of traditional, sequential, and transactional engagements. The customer experience with a brand is now always on, anywhere, anytime, and anyhow they choose. An illustrative landscape of some of the disruptive forces, effects and outcomes is pictured below. In the automotive retailer world, what have we seen in terms of disruption, again not just technological impacts but all kinds of disruptions or “disturbances”. There are quite a few, including but not limited to: Supply chain issues and inventory shortages Even more demanding customer expectations  New EV models and companies with direct-to-consumer models Ever increasing technology in vehicles including over-the-air updates Uncertain future of the “as is “dealer profit model  Ability to work with customers in a multi-channel format Some brands and vehicles getting more flexible financial access and even subscription models …and much more. The real question is, what do we do about it?  How do we handle these disruptions?  How do we survive and capitalize on disruption and build our business into future-proof models? The hard part, even though I asked the questions, is that there is no easy answer. There is no one solution, one technology, or even one way to ensure that your business can survive and thrive in the future.  I have heard before, “we cannot predict the future, but we must plan for multiple futures.” Good advice.  Meaning nobody knows what exactly the world, our industry or our business may look like in 5 years, 10 years and certainly not beyond. Anybody see the supply chain shortage coming 3 years ago? Anybody think Tesla would be on of the Top 10 market cap companies 10 years ago?   52% of the Fortune 500 companies from 2000 are extinct. That is not a typo. Read that again. So, there is no 100% prediction, and there is no one easy answer. But the recipe for success in an ongoing continuous cycle through any disruption must include some basic core operating principles and capabilities.   Some critical components and general principles include: Do not have a rigid business model, be willing to change Build a business model enabled by flexible business processes and enabling technologies aimed at delivering experiences and fulfilling needs (not transactional simple mundane tasks) Equip your people with training, knowledge, culture, and power to deliver customer experience (no barriers) Data and Insight. Understand what shifts and movements there are in your customers and your business.   You may think you are in the car business, but you are I the customer experience business. Focus on needs management over leads management. Take Action. Early, often and always. Do not wait for change to come to you, change what needs to be ahead of the curve. Consider your business as a platform (not a static and rigid set of transactional processes), with dynamic capabilities that can flex and pivot to meet demands and needs. These may sound high-level and unachievable for a dealership. But they are not, and they can’t be. They must be driven into the culture of your business .   In more tactical terms, your business must consider, deal with and optimize the ability to: Sell and service different (online, offline, omni-channel, mobile, and anyway the customer wants it.) Assess and determine new business models that can be viable for your customers and market: Subscription models Rental / car sharing models Other access and financial models to enable customers to access mobility Charging stations  The dealership as an experience center not as an inventory hub or “sales office” EV versus ICE customers service and overall needs More personalized build-to-order to overcome shortages Service as a service (more of a Geek Squad model) than a service bay model Be flexible to accommodate all different kinds of customers and their needs A tall order indeed. But if we think of and build our dealership business model more as a dynamic platform of capabilities and assets to accomplish the above and more, we can succeed in multiple paths of revenue streams.   It is not easy to accept that our business must be under a constant state of transformation.   But in order to continually survive, thrive and innovate we must always be in that continuous state of transformation. Be comfortable with being uncomfortable. Because one thing is certain, the future is exactly what we think it will be. The key take-away again, DISRUPTION IS THE NEW NORMAL.   Get used to it and realize we have to deal with it continuously and forever. Capitalize on the fact that if done right, we can enable our business to dynamically flex in new directions and new models to support and thrive in multiple paths. Put focus and effort on the notion that are business is a platform of capabilities, not a rigid set of workflows.   With the focus on the North Star of customer experience driving your business, the capabilities can be dynamically developed to withstand all change and disruption.

It seems like a simple concept.  Take care of people’s needs first and foremost.  Yet, it continuously falls short on the planning and execution when the transactional mindset and objectives take over. We spent decades instituting and enforcing a “customer satisfaction” survey process.  That was supposed to put the customer first right?  But that was a post-mortem grade on how a dealer rated versus other dealers, in most cases on a transactional process, not really aimed at customer’s true needs in the first place.  We have now evolved to the concept of “customer experience.”  But we still chase it as if it is something we can develop and invoke upon the customer.   When in reality it is the “customer’s experience.”  They own it.   They dictate how they will perceive it and value it.  We merely need to be able to be flexible and personalized in our approach to their needs. I would argue vigorously that the future of retail, the success of the dealer footprint going forward will depend much more on Need Management versus Lead Management.  By its very nature leads are cold, transactional, and aimed at getting people into a car within the current sales month.  Needs are obviously more personal, more relevant and contextual to the exact need for the interaction and engagement.  Needs may not be aimed at a traditional sale either, but perhaps a service, or a question for now, or a more personal approach to the right vehicle and right financial arrangement. This proposition may sound basic, but the entire retail industry is built on a sales leads funnel to get people in and through the process and then survey them and ask how we did.  Our focus must shift if we hope to have long-term sustainability in retail in an industry and a function that is fast transforming.   As EV’s and other digital services and subscription models enter the scene, as new car inventories will be in flux through 2022 and used cars become an option, we must personalize the experience to focus on customer mobility and transportation needs. Even in the traditional new car sales process, we often miss the need.  As more customers move to digital shopping and retailing (you all know the increasing numbers), they are required to figure out their own need before they hit a human or the store.  We ask them to figure it out through a wonky pricing and configuration tool where they must select option codes and packages they are not even sure they want or need.  Most of us in the industry struggle knowing the difference between a trim level, model level or an option package.  The customer often muscles their way through it and lands on a “build and price” vehicle.  That then becomes the lead!  But have we really identified and resolved the need? I believe the whole process needs to be tipped upside down to start the with the need.  What does the customer (The “UP”) need?  It may sometimes be information they want to support some decision making that is hard to find in a sales brochure online system.  It may be information about best mobility options.  Assuming for a moment it is a vehicle that they want to own and acquire, is a new or used vehicle the best fit?  What type of driving will they do?  What are their weekly commuting needs?  What is their budget target?  Are they better of buying, leasing or even subscribing where available? I am not naïve enough to believe that the very process of moving inventory, monthly sales targets, transactional commission-based sales people are supportive of the idea of taking the necessary time to understand the customer need and taking the appropriate actions to deliver on that expectation.  What is success in automotive retail and sales will have to change. I would argue it already has changed.  Good dealers were already transforming processes and success metrics to understand that the future retail sustainability will be based on lifetime value, products and services, experiences and customer affinity to the dealer brand and experience.  The past year and a half with a global pandemic that changed customer expectations and mobility needs, and also disrupted supply chains for the foreseeable future, have all created more value on build-to-order (personalized orders) and personalized engagement for customer fulfillment of needs (not just sales). The new business imperatives that will drive success in the auto retail industry include: Access over Assets  The importance of the ability to engage the customer where they are in their journey as opposed to simply having inventory available.  That “permission” and capability for access and engagement is move valuable (even on a balance sheet) than the physical assets. Personalization over Transaction How much of the customer’s true needs were met versus our simple goal of a unit sale.  Transaction may help the monthly sales quota, but personalization will contribute to the customer lifetime value and the business sustainability. Service is not an event, it is an experience Treating every service experience as an opportunity to engage the customer deeper in their needs fulfillment entirely as opposed to a maintain or repair the product only mindset Users over Owners Leverage any and every customer who may want to engage with us at the retail level whether that be for product information, used cars, mini-fleet access or subscription models, digital services, maintenance and updates, charging, or future services as the goal over simply supporting owners only with the basic vehicle services.  They may not even be a “customer” in the traditional sense, but every interaction is of potential value for both parties in building a long-term relationship. Retail is not a location, it is an action and a relationship This means more than mobile delivery or service pick-up and drop-off.  How do we use retail experiences, which should include every interaction through every channel, to build a relationship and understand the customer’s context and needs?  Retail, and all it entails, is an experience building opportunity. While I mention these as imperatives, there are objectives and measurables that should be assigned to these efforts.  There should be focus on the people, processes and technology all aligning to this mission as the North Star experience.   It’s always easy to raise issues, but what are the solutions?  There is no one path forward to achieve these objectives and each dealership will need different focus and transformation depending on its maturity towards this goal. Let me offer a few thoughts and enablers I would consider critical to pivoting to need over lead. Define your North Star customer experience.  Clearly and concisely.  Is it well understood and communicated through the organization? Is the North Star experience supported by the right processes and measurables? Personalization not Transaction focus.  Do we really know and understand the customer needs? Do we have the right data and information to understand and respond appropriately to the need?   Are we asking the right questions and capturing the information? Does our technology share actionable insight, or does it just enable transactional processing? I would not suggest that this initiative mandates and overhaul of your technology platform and entire business processes.  But could they all be sharpened and aimed at the right objective?  I would suggest they could be optimized for this long-term success strategy.  Let’s utilize customer management systems and data across the organization (regardless of department or function) to create additive customer journey and customer need insight at each interaction.   Let’s evolve our business processes to be “customer-centric” and not functional-based or organizationally standard. Overall, the future of retail success will be predicated on the ability to deliver personalized, valuable engagements on the terms of the customer.  Their needs being fulfilled is the future of retail, not transactional exchanges.  That includes the what, where and how.  Retail is not a physical location; it must be an experience.  Customer needs will be met by somebody, it is up to you to make sure that somebody is you.  

The State of EV “Oh we gonna rock down to ELECTRIC AVENUE!” We have all read and heard the recent headlines around the auto industry. Electric, electric, electric. It is coming fast and furious! Depending on the source, the forecast for future electric vehicle sales vary, but recently with all the activity the sources and forecasts are starting to align on the growth potential and likelihood as being significant and expansive. It will no longer be a splinter niche customer set, but rather a significant profile and proportion of sales and even trending towards the majority. According to a few sources, the likely truth will probably be somewhere in the following projections and forecasts: Sopheon notes that the additional product offerings coming could push global EV sales to between six million and 11 million by 2025, rising to between 11 million and 19 million units a year by 2030 The real interesting pieces come from IHS Markit's forecast for 2021 and beyond. This year, the firm believes we'll see electric cars take a market share of 3.5%, just about double from 2020's number. Fast forward to 2025 and the company forecasts EVs will make up 10% of all new cars sold. That would be a massive shift in buying trends . According to Edmunds, by the end of 2021 there will be 26 electric vehicles available for sale across the sedan, truck and SUV segments. That is expected to grow significantly over the next 5 years with as many as half the models for sale in 2025 having EV options. So EV is here and coming in an even more substantive way. What does it all mean? How will car buying, owning and servicing change? What does this shift do to retailers? In fact, what will the very retail footprint and experience need to look like to accommodate this market disruption? A few quick questions I have heard? Do I need to treat an EV customer different from my “normal” customers? Will I need a separate showroom or sales process? How will this affect my service business? What other considerations will I need to train my staff for in selling EV’s? The answer to each one of these is that there will be differences and nuances that need to be accounted for with EV customers and products. But the amount of change needed depends on your current dealership’s focus. If you are a retailer focused on customer experience and lifetime value as two key driving forces and metrics of success, then the change may not seem as drastic. If your store is more transactional based and price and profit are the only main drivers of operations, the EV customers and opportunities may be tougher to capitalize on. So What Really Changes for Retail? We Just Sell Cars, Right? Wrong. The bottom line is that the very retail model will have to adapt and shift. Retail will not be about moving product, or transactional based, but it must become first and foremost centered on experiences. Electric vehicles require a different value proposition as part of the sales process. The service experience will also be very unique for these products and owners. The focus needs to be on truly meeting the customer’s needs, value, and overall experience. Retail itself must become synonymous not just with the purchase, and not just the physical in-store engagement, but rather the entire customer engagement process along their entire journey. There was already major transformation coming in the industry due to technology and customer expectations, but the significant uptick in electric vehicle availability, sales and ownership will continue to disrupt retailers to become more of a mobility platform and mobility experience center. Rather than try and detail all the changes that will have to come and the capabilities that retailers will have to develop, consider the following graphic. This is just a high-level framework of some thoughts on how a future auto retailer will have to focus, operate and thrive. We can certainly debate the major function headings, or the specific services and functions themselves, but the fact remains that even if 80% accurate, this is quite a shift from the current operations and focus of today’s retailer. Why will this shift happen? Notice I said “will” not “if” or “might”. There are too many disruptive forces coming to play into the auto industry and the auto retail environment. Major Challenges and Disruptions Growing customer expectations (On Demand Economy / Instant Access) Mobility needs shifting Disruptive technologies (Connected, 5G, Autonomous, Electric, Digital) Electric vehicle growth (global view and movement) Autonomous vehicle technology On Demand services (including vehicle features themselves) Covid after-effects / Urban exiting / Virtual working (commute) Increasing mobility choices (mode, access) All of these factors and many more will demand a new retail model. One that engages customers to meet their mobility needs in any and every way possible. That will need to include micro-leasing, access on demand, fleet / rental options, subscription services, mobile services, downloadable software, pay-by-the-mile, features-on-demand, and much more. Imagine a customer virtually test driving a vehicle, and specific features and accessories via virtual reality from the comfort of their own home. Then having the electric vehicle for the weekend, dropped off at their house. They return the vehicle to the dealer, cash in their energy tokens, and then purchase a mobility monthly subscription pass for the dealer’s mobility platform options. Sound far-fetched? It is happening in pieces through various companies and channels now. It will be up to auto retailers to become the one platform to provide (or at least manage) these services in order to keep customers engaged and to be sustainable and meaningful into the future. Shift Happens So how do retailers get ahead of this rather than trying to chase the opportunity when it is too late? This must happen with adaptive strategy and operations. A few key action plans include: Assess what drives your operation and how can it become more customer experience focused (what you measure is what will matter) Continually develop customer data and insight to always be prepared to meet the customer where they are in their mobility needs Begin to view and structure your operations not as departments, not as inventory and assets, but as seamless and frictionless enablers to capabilities. Define your North Star. What will make your dealership different? What will truly separate your customer experience from the dealership down the street? Enable employees to do what is right, not what is standard and expected. Leverage technology to enable frictionless experiences, not become more cumbersome. Always be customer-focused, agile and adaptive to their shifting needs These capabilities will insure deeper customer connection and engagement. What you sell in the future may change, but it will not matter if the basic customer experience is not there now, tomorrow and along the way; because your customer will go to where they can receive the best experience. Customer experience is the bridge from the present to the future, from the known to the unknown. Our future monthly operating report and operational structure will look much different than today, but the core customer experience fundamentals must exist continuously to survive and thrive in that new world.

The Steve Jobs quote has never rung more true. There has been so much conversation of late about digital transformation, auto retail reinvention and the "new normal." I have contributed to much of it. But what does that all really mean? What can a dealer or dealership really do to transform? What does "transformation" even mean? I believe a dealer needs to go back to basics and not get caught up in the hype of Digital Transformation. There is no silver bullet. In good automotive retailing, it has always been and will always be about delivering an exceptional customer experience. Technology is one enabler to support that effort. But it is not the end-all and be all. In today's high-tech world, we often approach an issue in the manner of  "the answer is technology, what's the question again?"  A dedication and execution of processes that are seamless, frictionless, integrated, omni-channel and personalized are ultimately what enables the orchestration of a customer experience. We have been swept up in Digital Retailing, Internet Sales, eCommerce and Mobile Delivery as a pursuit of shiny objects. It is all retailing at the end of the day. To the customer, there is one retail experience (sales and service and ownership journey). Their experience. Online or off-line and through every channel, the customer wants what they want. A Frictionless Experience As a consultant and an avid forum member in many groups, I have heard the word frictionless evolve over the last year or so as it pertains to great customer experiences. To be honest, the word first hit me as rather crass and not fitting for the concept of customer experience. But in actuality, it is the perfect description. What a customer really wants is seamless engagements, personalized recognition of their need and ease of interaction (through any channel, any time and without pause or reaffirming context each time). Frictionless also is more a result of a solid and integrated process as opposed to just a simple technology. I personally don't even like the phrases digital transformation and digital retailing. It is just transformation and it is just retailing. The idea that if something is "digital" or has a "digital" component that it is better or works well is not necessarily true. The technology or digitalization still is part of or encompasses a full process. That process has workflows and steps and sometimes humans that must all work in concert for the same alignment and direction to deliver the experience through that process, including the technology. Current State Many dealers have increased their technology spend and digital efforts significantly over the last few years. An average dealership now often has: Call Integrated Voice Response (IVR) systems,  Lead Management and CRM modules Internet Inventory, Search, Price and test Drive Requests and Lead Submissions SMS / Text capabilities Online Scheduling (sales and service) Online self-help or virtual assistants/chatbots Mobile Delivery and Service (Customer Pick-up and Drop off) Yet, with all those technologies and recent expenditures, the auto retail industry's general CSI scores compared to other industries have not risen and in fact fallen behind in relative comparison to other industries. In many cases the same issues and customer dissatisfiers prevail now as they did a decade ago. The following is just a compilation of some recent Consumer Reports and Forum posts on common customer issues: Why is it so hard to buy a car over the phone? Can't I complete the deal over the phone and Internet and just go in to pick it up? Why do I have to go into a dealership to get a price? How come I keep getting shuffled around the phone system and back to the operator? Why can't they honor the online price or quote? Why do they pretend not to know the correct sales tax or other fees? Why does it take 4 hours from the time I say I want the car? No matter what time I schedule to come in I always have to wait. It seems almost impossible to get an update on my vehicle in service. The final price for service always seems a lot more expensive than the original quote. I don't feel they really know what I need in a vehicle but they sell me what they want. Do any of these sound familiar? Technology or digitization has been added in most sales, service, and dealer operations areas, yet these issues persist. In recent IBM research, Millennials overwhelmingly stated they would rather go to the dentist than a car dealership. Perhaps the issue and root cause lie more in the overall mission, process and measurement of success for the customer experience. In some hopeful news, 65%+ of Millennials also stated they would be willing to pay more for a good experience. Basic Steps Forward The journey of transformation should start with a focus on basic processes and never stop evolving. Eventually, 90% or more of a dealership's workflows and processes either touch the end customer or affect their experience in some capacity. Those processes must be scrutinized to remove friction.   In order to maximize the transformation to a value-driven customer experience, start with some basic steps. The following is a framework to approach an honest view of your dealership process issues and potential resolutions. Define Success  - Of course, the ultimate goal is sales and profit. But what other measures define success for your dealership and your customer experience. What is the North Star vision you hold up as your customer experience? Can you define it? Can you measure it? If it can't be measured, it can't be improved. Customer satisfaction is too transaction and rudimentary. Deeper measures around customer engagement, information of value, time to interact and value of contact need to be assessed. Outside-In perspective  - Look at any process or workflow from the perspective of the end-user or customer of that process. What is it they are ultimately delivered in terms of interaction, value and personalization? Identify Barriers  - Assess what barriers exist from your dealership delivering the customer experience you have defined and laid out above. Is a process too complex? Does it have too many hand-offs? Does it require approvals or time to process? Root Cause  - Once barriers are identified, assess the root causes. Root causes could include lack of technology but often may be more about process definition, training, administrative complexities and lack of operational focus on what matters to customer experience. Process Improvement Loop  - As processes and barriers are assessed and changes and improvements are made, they should be documented and measured. But they should also never be at a finished state. The evolution of customer experience driven by customer-focused processes is an ongoing journey. This will continue to evolve the dealership in a more agile and flexible way. There is no "big bang" or "silver bullet" or technology that will solve all the issues. It takes a continuous and iterative process that starts with the basics. Summary Start with the basics. Do not be swept up that a technology or quick fix exists to change the actual dealership DNA of customer experience. View the processes, barriers and friction from the customer's point-of-view. What do customers want and expect that is not being delivered? Then work can begin on evolving the WHAT is expected and WHY it is not currently being executed. Make or keep your North Star of customer experience as the target of all processes, and continually work on evolving them towards that goal.

Tom Knighton said it best, Customer experience is the next competitive battleground Customer Experience - the term is everywhere in business and even in society now. As with many business practice movements, the term has been misused and misrepresented. Over the past few decades, business has used and practiced the art of Customer Satisfaction, Customer Relationship Management (CRM), Customers for Life, Customer is King and even more mantras. They have all been attempts to put focus on the customer. But they often based those concepts on technology or a belief that there were tools that make this happen for a business. Customer Experience (CX) is not the same as Customer Satisfaction. Customer Experience is an emotional attachment and value that the customer owns. I would explain it using something we all understand. Ever have a meal and say "that was satisfying"? Simply asking this to yourself meets basic criteria but does not create a lasting memory. Now if you have ever gone out to eat, no matter how typical or fancy the restaurant and had a great table, fun company, excellent service, fantastic food, tasty beverages and overall enjoyed the event, that becomes an EXPERIENCE. You will likely continue to talk about it and treasure the experience, not just the food. What is CX Really? I would also push the concept further that Customer Experience is not the new business practice, technology, department or business function we simply build. In fact, Customer Experience is not something we as a business own at all - it is also personalized and individualistic. The customer owns it. The customer experience is what they think, feel, and believe they experience as a holistic interaction. We as a business can merely build and align the business processes, technology platforms, channels, training and metrics against a good customer experience. We must do it one customer and one experience at a time. We need to stop measuring and driving the industry on a transaction focused Customer Satisfaction score. We must begin to really understand, align and deliver against personalized customer expectations and needs to deliver a holistic experience. The Industry Issue In auto retailing, it is true that all the horror stories of the past and the bad image perception have scarred the current thinking about buying and servicing a car. Perception is reality. You will often hear people get excited about the prospect of the new car, followed by a sigh that they have to make a trip to "the dealer." In recent research, it has been conveyed that the Millennial generation would in fact rather go to the dentist than visit a dealer. According to several Consumer Reports articles, the main dissatisfiers with the retail process (despite vast improvements) continue to be: The sales representative made the experience a challenging and unhappy one The F&I process was too time-consuming, wasteful and confusing Getting the run around on the phone Not being able to match an offer or vehicle to a real deal All the haggling Lack of visibility, transparency and trust All the "back-and-forth" and time wasted Not concerned about the customer needs Now, compare that with experiences we have all had in other industries. The pandemic itself has highlighted and accelerated the ability of many businesses and industries to become more customer experience driven. Many are offering curbside pick-up and drop off, mobile delivery, omni-channel access, more virtual agents and self-help options and more personalization to suit the customer needs. I always like to share one simple CX example from an industry we can all relate to in our lives - pizza delivery. For a $5 pizza order from Domino's, or almost any pizza chain for that matter, you begin a customer experience journey. The full experience can include: Order through multiple channels Recognized by your name, an account ID, or your phone number as a previous or new customer Able to repeat a previous order with one swipe Given the ability to track your order through multiple devices Receive order updates Ability to change or add to your order up to departure of the delivery Notified when your driver is on your street or in your driveway Delivered within 30 minutes, as promised in the majority of cases  Given a discount or earn loyalty points for your order in many cases Asked (surveyed) after delivery about your experience. Not the pizza, the experience.  In some cities, the delivery is being tested with an autonomous delivery vehicle, or to a hot spot or mobile delivery spot of your choice All of this for a $5 pizza. At IBM we have a saying, "The last best experience you have, in any industry, becomes your standard going forward across all industries." So we all carry these experiences and increased expectations from recent events and business service levels into the auto retail environment. The stakes have now been raised even further for auto retailing. So Why is CX So Important? In my last article , I wrote about the possible future outlook of 2030 in the industry and auto retailing. The fact is that it is quite unknown. Will retailers become less relevant? How will service and parts business be sustainable in the current footprint with more electric and autonomous vehicles in the sales mix? What will be the new car sales levels in the next few years with the pandemic effect and more at-home workers (less commuting)? These are unknowns but the constant for the industry, or at least the shifting of the industry from new car vehicle transactions to a mobility enabler will be the customer. Traditional new car sales will not sustain the industry forever. The customers will. Customer expectations and customer needs will continue to shift, but we must adapt and be the provider of the experience. If you follow the customers, you will follow the revenue and profits. Their needs and their journey are what the industry will transform around. Auto retailers must build and become a "Customer Network Platform" for mobility, providing access, services and experiences... whatever they may be. An engagement, a bond and connection must be fortified between retailers and customers to transform together and not focus on the product, or the transaction, but on delivery of a mobility experience. That will secure the sustainability of a retailer in the future. As mentioned in the opening quote by Tom Knighton, "Customer Experience is the next competitive battleground." Businesses who deliver upon an experience, will find the right products, services and value bundles to offer and deliver to customers. The customers value the experience and they will drive their needs into the industry, or others will come in and deliver upon it. Five Action Steps to Take Now I don't want to paint a total doom and gloom picture here. Many retailers have taken great strides to improve customer processes, customer engagement and the overall experience. Much work has been done by many to improve system integration and data availability to help support a holistic customer experience. More focus has been placed on this issue and that is a good thing. Here are 5 areas I suggest be constantly focused on to continuously improve and keep customer experience the driving mission in your business. The recommended actions are: One view of the customer - Continue to integrate systems and data to have one single view of the customer. A service experience should not be a separate incident from a sales transaction or part purchase. It should be one single journey of that customer with personalized engagements along the way. Work to get one single source of truth of customer information across all channels, all departments and all engagements. Focus on need not the sale - One of the major reasons customers are so dissatisfied with the sales and service process is the lack of understanding, empathy and fulfillment of their actual need. Customers are often not asked about their needs for a new car, or their needs around timing or availability of a service experience but are rather mandated their options. Don't reward and measure metrics that only focus on transaction volume or transaction satisfaction. Make the customer experience the focus, the priority and the mission. Channel Consistency and Information Access - The customer process across any channel at any time should be one of consistency. Starting this process over and over each time they access a new channel or talk to a new person should not be part of the journey. The ability to quickly access information and find value is of utmost importance. Leverage virtual agents, chat functions and self-help functions to assist customers to access what they need quickly and easily. Examples include service updates, price information and inventory availability. Personalization - Don't lose sight as you begin building tools and capabilities to deliver customer experiences - they need to be adaptable to individuals. Each customer is unique and the focus should be on building and delivering capabilities that can adapt and personalize each and every experience. Customer recognition, customer specific need fulfillment and unique treatment will make each customer experience special. It keeps customers coming back, no matter the actual product or service of the future. Create "Wow" Factors - Find, develop and deliver experiences that set your dealership apart. What will make your dealership relevant and differentiated from the rest? Become known for something special that you can "own" and deliver. A "wow" builds the overall experience. Summary The Customer Experience will be what defines the future of our industry. The product, the transaction, the specific service will matter less. Why will they come and do business at your dealership? It cannot just be because of price or product availability, it must be more holistic and meet the customer's needs. Build and deliver a customer experience on each engagement, with each specific customer, over and over each time. This experience will define your dealership as being relevant and differentiating to a customer's mobility needs. This experience will sustain your business through unknowns of the future of the industry. If you enjoyed this article, take some time to listen to the latest podcast episode on Experimarketing  with  Colin Carrasquillo