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Who are the upstart examples of leading new car sales experiences? Everyone notes Tesla, but how much is that the hype of the product versus a truly remarkable experience? And what other services are worth attention for their customer-centric approach? Consider both OEM players as well as novel disruptors to the space (e.g. car buying services such as TrueCar).
Hello! Thank you for your inquiry. It is our understanding that you are seeking examples that illustrate new approaches to the car sales experience. The short version is that the automotive industry has taken note of the need to improve the customer experience and OEM players are implementing programs to enhance this experience by focusing on entertainment, transparency and adventure. Other novel disruptors such as Carvana and Beepi were created purely to evolve the customer experience. Below is an in-depth analysis of our findings.
OVERVIEW
To answer your request, we searched through corporate websites, industry reports, trusted media sites, user forums and review sites. Through this method, we were able to find some key information regarding how dealerships are revamping the car buying experience to match customer expectations. In a consumer experience study conducted by DrivingSales, they found that 56% of their survey respondents would purchase vehicles more often if the dealership process was made less complicated. Comparably, 99% of their respondents assume that the car shopping experience will be difficult. In response to the negative consumer outlook on the car buying process, the automotive industry has been looking into ways to improve this process.
To further prove this point, we will explore examples from traditional dealerships associated with an OEM as well as novel disruptors who have created platforms with the customer experience in mind. Many of the changes implemented in the car buying experience have been in response to the changes in expectation from millennial customers. To better understand the changes, we will first explore the expectations of the millennial customer, then outline examples of how car dealerships are meeting these expectations.
CUSTOMER EXPECTATIONS
In the US, millennials are the largest generation and are moving into a position to have the largest buying power amongst all generations. The millennials and other like-minded individuals have distinguishable expectations that differ from previous generations. In an article focusing on the changing expectations in regard to the automotive industry, Forbes identifies 5 main trends in customer expectations. The 5 trends are as follows:
(1.) Peer-to-peer customer service: This trend is explained as the customer's need to feel as equals with the sales advisor.
(2.) Digital parity: Customers, especially millennials, want an experience that has equal convenience to online shopping.
(4.) Transparency: Customers are seeking openness and honesty when discussing topics such as price, quality and vendor relations.
(5.) Adventure/Experience: One of the most noticed changes in the customer expectation is the need for adventure and excitement.
NEW CUSTOMER EXPERIENCE APPROACHES - NOVEL DISRUPTORS
Per your request, we searched exclusively for information on True Car and the car buying experience through them, but not much was found other than customer reviews which included very vague details. Therefore, we focused on industry reports and other reviews of popular car vendors. Our research found that most of the novel disruptors in the automotive industry focus on an online buying experience for customers. This is a direct response to the customer's need for digital parity and transparency. While not many case studies could be found on their particular differences in the customer experience, we did find information on what made these vendors stand out.
According to DrivingSales, the 4 largest companies in this sector are Beepi, Shift, Vroom and Carvana. These 4 companies focus on a seamless buying experience through an online platform; they also offer services that allow customers to feel confident in their purchases. For example, Beepi offers on-site inspections. Beepi does this by sending inspectors to the house of the seller and does a comprehensive inspection, which is later put into a report that is sent to the potential buyer. Offering a similar service, Shift will deliver vehicles to potential buyers for a test drive. Carvana and Vroom both offer free shipping as well as a 7-day return policy. One of the most notable features of these websites is the financing portion, which is done completely online.
NEW CUSTOMER EXPERIENCE APPROACHES - LUXURY CAR BRANDS
Luxury brands are starting to implement customer experience programs that include redesigning showrooms, creating driving academies, entertainment centers and implementing newer technology. Below are examples of these programs from brands such as Lexus, BMW and Porsche.
Example 1: Lexus
Lexus has implemented a new customer experience program deemed as the "Lexus Difference." This is a pilot program that a total of 7 dealerships are participating in. They implemented this program to attract 3 main demographics, which are (1.) women, (2.) millennials and (3.) multicultural buyers. Many of their changes focus on the perception of the dealership and offering their customers a unique experience.
To implement changes in the customer perspective, Lexus has partnered with a Japanese perfumery to develop a signature scent. In addition to creating a signature scent, they also teamed up with a national designer to incorporate new uniforms that have a more modern, trendy look. To address the customers need for adventure and experience, Lexus has included yoga instructions and spa treatments. They are also offering television in the waiting room that is turned to shows that are considered "trending." Furthermore, Lexus is providing additional training to sales advisors that teaches them how to engage customers. For instance, salesmen are now trained to address women first because they hold 80% of the buying power.
Outside of the "Lexus Difference," a Lexus dealership in Greenwood Village, CO has implemented an entertainment center. Their entertainment center offers numerous points of entertainment including multiple iPads for use, a billiards table, a theater, 2 large coffee bars and multiple outdoor patios.
Example 2: Porsche
To enhance the customer experience, Porsche is now offering a driving academy. According to reports, the driving academy attracts 10,000 new potential buyers a year. Not only does this program bring in new potential buyers, it also brings in additional revenue because Porsche charges between $300 and $850 per session. Each session last 90 minutes and includes driving instruction from a licensed instructor. The instructions take place on a 1.6-mile track and allow for customers to experience the features of the vehicle that aren't bound by limits of traffic and speed limitations.
Notably, luxury brands in European countries have implemented driving academies for years. So far, Audi, BMW and Mercedes-Benz have also implemented similar driving academies. According to experienced marketers, driving academies are very effective in converting curious customers into actual customers because the experience is very emotionally charged.
Example 3: BMW
To address the need for adventure, BMW Welt offers a dynamic experience for customers who have already purchased a car. This addresses the disconnect between manufacturers and the consumer. Even though the BMW Welt experience is in Germany, it is offered to international customers, including Americans, as well. To facilitate this experience, BMW built an entertainment center that is attached to their factory. The facility includes a museum, exhibition space, restaurants and a driving track.
The customer experience begins as soon as the client reaches the facility. They are greeted by a personal concierge. Customers are then led through a personal tour of BMW's museum and factory. After the tour, car buyers are then treated to a buffet lunch and given an in-depth presentation on the vehicle they chose to purchase. After the lunch and presentation, customers are then led to a showroom where their purchased vehicle awaits them under a spotlight and given a customized key chain with their initials embedded. As the customer is ready to leave, they are given an opportunity to take a spin around BMW's driving track.
NEW CUSTOMER EXPERIENCE APPROACHES - MASS MARKETS
Toyota has 2 dealerships in Phoenix, AZ and Oakland, CA that have implemented new approaches to attract millennials and improve their buying experience. Their first approach included implementing the use of iPads by all of their sales advisors. The purpose behind this move is to streamline the paperwork process. Now the sales advisor and the customer can sit side-by-side during the credit application process. This was particularly in response to the consumer's need to have an experience that is similar to what they would receive online.
Secondly, both dealerships designed a one-price approach. In doing so, they eliminated different commission models to discourage upselling. They also offer one price, which is their "best" price to avoid price haggling. Next, they have also increased training of sales advisors so that each customer has 1 point of contact. Lastly, they redesigned their showrooms to display vehicles in "scenes" allowing the customer to experience an adventure.
ADDITIONAL INSIGHTS
Because you mentioned Tesla specifically in your request, we searched to see if Tesla is more known for their vehicles or their customer experience. A wide variety of articles covering Tesla speaks on the customer experience Tesla offers rather than the quality of their vehicle. Furthermore, many articles used Tesla as an example when speaking of improvements in the customer experience for automotive dealerships. For instance, Cross Channel Connection's wrote an article outlining approaches that mirror Tesla's customer experience. These suggestions include the following:
• Pressure-free, proactive customer contact - Tesla actively engages customers who visit their website and provided timely responses without pressuring the customer to buy.
• Offer self-service information - Tesla sends emails with links to a portal designed specifically for the customer that allows them to configure the vehicles they are interested in. They also provide accurate pricing based on these configurations.
• Offer transparent and easy online financing - The ease of Tesla's buying system has been compared to be as easy to use as placing an order on Amazon.
CONCLUSION
To sum it up, luxury car brands are improving the customer experience in the car buying process by implementing different strategies such as building entertainment centers, driving academies and providing personalized adventures. Dealerships who cater to the masses are also responding to the changes in customer expectations by implementing similar strategies.
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