Wednesday, 10 June 2009

A new beginning for automotive?

car_dealer I’ve spent the last few weeks looking around for a new car.

This is actually quite difficult for me as I’m one of those people who makes snap decisions and if I walk into a dealership I’ll walk out with a car. 

So knowing that, I’ve been researching cars online and it has been an eye-opening experience just how bad and how backward the automotive industry is.

The problem is that my expectations have been set by other industries.  If I was looking for training shoes I could completely personalise them from style to colour and have these custom manufactured and delivered to my home.  If I was buying music I could order the CD, download the track or listen to it on demand.  If I was buying a book I could order it online, preview it online or download it immediately to my e-reader

So why is it when I start looking for a car the experience is so different.  Here’s what I’m trying to do - I want to design the car I like, then price it, then work out ways to finance it and then I want to know if they have a used model with same spec.  I want to compare the car with a loan, with Personal Contract Plan, with difference deposits.  When I get stuck, I’d like to ask someone a question – no strings attached – and get an honest and accurate answer.

In short – when buying anything, I want to play with all the options, in real time, in my time and online.

The first hurdle though is just finding information on it.  Take Mazda for example - on their website I can request a brochure, find my dealer and arrange a test drive.  All very last century.  Oh, and I can see some glossy photographs (and download a wall paper) and a view videos.  What I can’t do is build my own car and have it priced. (So that's the RX-8 out!)

Then I want to understand how much it costs.  Now I could only find Audi willing to show me finance options online – everyone else wants me to speak to the finance team at the dealer.  Not even my bank expects me to have to go into a branch these days.  In fact I don’t have a bank branch, I don’t have a post office and I don’t want a dealer – I just want answers and I want them at 11pm on a Saturday night.

When I want to ask questions there are few options available as you basically have to go through dealers and that can be experience in itself. 

I sent emails to 4 different dealers asking for finance options on a number of different cars.  Honda was the only one to come back to me quickly and accurately.  Two different Audi dealers either failed to respond at all, or responded to only part of my query and incorrectly (so no TT!). 

In one email where I had explicitly said that I didn’t want to chat on the phone and to only communicate via email, I was surprised when within seconds my phone rang with a salesman on the line.  Top marks for being on the ball - but they completely failed to deal with me on the channel I wanted.  If I’d wanted to speak on the phone, I’d have picked up the phone.

So is it me – am I expecting too much?  Well it seems not as Wired.com recently had an article discussing this exact issue.  They put it succinctly when they said

“in the age of Amazon, it seems almost quaint that there’s no way for you to choose your options for a new car on a manufacturer’s site and push a “buy” button”

Some of the issues are the way that the automotive sales channel is structured.  Car manufactures in many cases cannot sell direct to consumers and individual dealers don’t have resources to create the online experience required. 

However, another issue is how the sales staff are remunerated.  As many of them are bonused, anything which might take away sales - such as online purchases  - or might not result in immediate sales - such as an email question - doesn’t get priority.

In fact when the salesman who rang me found out that I didn’t want to setup an appointment that weekend, he basically just put the phone down – so there’s another one off my list.

This culture wasn’t just limited to automotive, but other industries have seen the writing on the wall and are changing.

Both Carphone Warehouse and Comet have recently announced changes to how sales staff are compensated so that there is less focus on the sale and more focus on the customer.  When trialled by Carphone Warehouse, contrary to expectation, staff retention actually went up and the trial has been deemed a success. 

Staff are now rewarded not on sales but on net promoter score post sale – essentially on how the customer found the whole process and whether they would recommend them to someone else. 

It is reported that promoters are nearly 10 times more likely than detractors to repurchase or lease a vehicle of the same make or brand as their current one.

Given the recent reports on customer expectations for service overall and their willingness to drop any brand not meeting them and the strong link between customer experience and loyalty, this is not an area any industry can afford to underperform in – especially one in such dire straits as automotive.

On the upside, it is expected that as automotive companies emerge from this crisis, especially in the US there could be be changes to the buying processing.  Craig Cather, CEO of forecasting firm CSM Worldwide says "A lot of new business models could emerge,  we could see some crazy things in the next few years."

In the article in Wired, they put forth their vision for an automotive customer experience saying:-

“What would a car industry without dealerships look like? In our dreams, they’d be a lean network of showrooms offering hands-on experience with a range of vehicles from a variety of manufacturers and help from salaried employees who won’t lose a commission if you walk.”

That sounds like a vision I’d like and if they could just integrate the offline with the online I may actually enjoy looking for a new car. 

Until then I will continue to be underwhelmed by the search, uncomfortable with the negotiation and ultimately feel like I’ve been ripped off when I actually own it – but I’m happy to be proved wrong.