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:
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.
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.
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
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.
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.
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.
MBA Marketing. Innovative Marketeer. Over 27 years of experience driving brand and customer strategy into market and profit realization. Director and VP level positions in world-class organizations including IBM, General Motors, JD Power, and PricewaterhouseCoopers. Dennis has led multi-million engagements in go-to-market approaches, e-commerce strategy, revenue growth, and business transformation at blue chip clients, multiple industries, and successful start-ups.
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