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3 Reasons CX is Driving Change in the Automotive Industry

Medallia: CX

For the last century, success in the auto industry has largely been driven by the product. Quality, price, style, technology—improving on these measures has been the key to winning in the industry. Now the industry is at a tipping point. Here are the top three reasons automotive is shifting gears to a shinier, new customer-centered model.

1. The one with the best vehicle is no longer the leader.

For mass produced vehicles, it’s become impossible for any one player to pull off delivering the best quality, price, technology—there appears to be only incremental room for improvement and innovation. But even if you could dramatically improve your product, it wouldn’t necessarily mean success. Why?

Quality ≠ Customer Retention

Quality in the auto industry is at an all time high. The worst cars today have fewer problems than the top-performing cars from just 10 years ago. And yet, that improvement has not translated to customer retention.* In fact, a significant decrease in vehicle problems between 2003 and 2012 had no effect on the customer retention rate.
(Check out this infographic on dependability vs. retention)
It’s clear that product improvements only offer marginal room for growth. And that means organizations looking to widen the gap with competitors need to focus efforts where there is plenty of room for improvement: CX.

2. Other industries are blazing ahead on CX, while automotive catches up.

From our unique vantage point on the front lines of CX across multiple industries, automotive appears to be a few years behind other industries in terms of customer experience.
Part of the challenge for automotive brands is having dealer incentives tied to an antiquated CX model. Most manufacturers still employ that customer annoyance, the long diagnostic survey. Its mind-numbing length combined with few opportunities for open-ended, verbatim feedback make the survey an inadequate measure that’s sorely out of sync with how customers share feedback today. No other expensive vertical hamstrings its retailers to such an outdated format for collecting customer experience data.
Importantly, while holding on to the long survey, the industry is missing the goldmine of feedback that actually is getting shared elsewhere. There’s so much room for CX improvement and innovation, the brands that recognize and capitalize on the opportunity are the ones fast tracking to the top.

3. Frontrunners are shifting from survey to serving.

Instead of trying to squeeze good survey scores out of a customer, industry leaders are actually focusing on serving the customer. These visionaries in CX are transforming their companies by engaging every customer, optimizing every experience with each customer, and activating employees to own the customer experience.
Mercedes-Benz USA, for example, worked with Medallia to create a customer experience that aligns with its tagline, ‘The Best or Nothing.’ Both MBUSA and Mercedes-Benz dealerships are now fostering a customer-centric culture and engaging with customer data in real time. The result is an industry-leading program that empowers dealers to understand and respond to customer-generated feedback instantly.
So while the industry at large lags behind in CX, that trend is shifting, and leaders are driving the change to a newer, customer-obsessed model. They are showing that the way to success for automotive organizations lies in putting the customer in the driver’s seat—long before they drive away in it.  
To learn more about Medallia for the Auto Industry, download this infographic.
*Source: J.D. Power®

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