Most of the automotive sector would agree that 2016 was a tough year as a result of slow economic growth. Although we saw a decline in vehicle sales, the industry hopes to see a gradual pick-up of sales in 2017.
For the industry and the economy to stabilise, we need an improvement in GDP growth. The industry also needs an increased focus on a new data-driven business model, something the traditional automotive industry seems ill-prepared for, particularly if compared with, say, ICT industry peers.
It’s highly likely we will see some changes to the traditional automotive industry model as OEMs look for smart ways to reduce costs and maximise brand loyalty. Complexities and demands include the increasing cost of production due to advanced technology and global minimum standard requirements, new lightweight raw materials costing more than sheet metal, and less consumer spending power. There is also more demand for high specification customisation and diversity in vehicle ranges coupled with the unsustainable costs of showroom floors, staff training and retention.
All of these complexities, together with increasing competition for customers in a connected world, points towards a shrinking bottom line in the ‘business as usual’ scenario, as is reflected in 2015 and 2016 car sales figures. Taking all of this in to consideration, a scenario where alternative strategies to overcome market complexities may well be the norm moving into the future.
The concept of eco mobility – which aims to reduce traffic congestion in urban areas by promoting alternatives such as public transport, small electric vehicles and bicycles – is dependent on the municipalities’ ability to provide the necessary infrastructure and environment. Small projects may show some traction in the medium term, but the scalability and viability of such a vision remains to be tested and implemented in the future.
If proven possible, it would reduce the demand for compact ICE vehicles for daily use. Small electric vehicles may become more popular for daily commutes while those requiring long-distance travel for business or weekend leisure would probably shift towards the more rugged SUVs or pickups, or even luxury sedans, possibly on an as needed/hire-as-you-go basis rather than ownership.
Digital disruption is a reality that affects car manufacturers, marketers and dealerships. In a digitally disrupted age, consumers are demanding more interactive services and mobile apps that plug seamlessly into connected vehicles. Consumers want more connectivity, are focused on active safety and ease of use, and are increasingly using digital sources in making their purchase decisions.
Digital disruption will continue to shape and refine both the local and the global automotive industry, with innovative strategic solutions being sought and implemented over the next five years.
Consumer spending habits have changed and less and less time is being spent inside dealerships when deciding on which vehicle to buy. Consumers these days are smart and they’re connected. With this comes an increase in internet leads.
In Europe, where the real move is toward internet buying, they measure the number of deals concluded against digital enquiries. A year ago, those figures demonstrated 3.2 concluded deals against 1 internet enquiry. Today those figures are 1.1 to 1 – for every 11 internet enquiries they do 10 deals. Locally, according to the NADA, we’re on about 7 enquiries to 1 deal. We may be a little bit slower to adopt, but I think we may well see an increase in digital transactions in future.
There is a continuous rise in the operating costs of a traditional brick and mortar dealership, so I believe that we will see an increase in multi-brand franchises for some of the smaller importers as a means of cost saving. Dealerships are also refining and streamlining their operations, systems, parts, service and pricing models. The focus is on driving efficiencies while raising profitability. I think in future we may well see a closer integration and interaction between OEMs and dealerships as cost optimisation becomes more prevalent and where customer retention becomes a strategic focus.
We’re also influenced a great deal by global change like elevated environmental concerns, consumer demand for connectivity and digital solutions, and advances in technology – particularly in safety features. Other disruptive forces include changes in both the supply chain model as well as vehicle ownership models, increasing urbanisation and more demanding and discerning consumers.
While the term design most often conjures up images of objects – from clothing to consumer products to skyscrapers – true design in its most honest form refers to a dynamic process rather than a static end-result. Quite simply, design thinking is the process of observing, researching, experimenting, modelling and testing processes (as well as products), in order to improve them to their maximum potential.
In today’s digital era, with an abundance of information, as well as data collection, storage and processing technology growing in leaps and bounds, more and more enterprises are finding ways to process this data into actionable insights to fulfil their business objectives, and this is just the beginning.
Design thinking is being adopted by every industry imaginable, whether it’s medicine, law, engineering or advertising. Take the humble contact centre (once referred to as the call centre) for example. In today’s contact centres, huge amounts of customer data are generated on a daily basis that, more often than not, goes unused.
With improved data analytics taking centre stage in the business arena, just think of the kind of information that can be gathered, sifted through, and used to increase the customer experience beyond anything possible just a few years ago. What is your clients’ average level of satisfaction? Which customers contacted your company, and why? What is the most frequent complaint, and what is causing it? What is your average turnaround time, and how can it be reduced?
What’s more, the advantages of big data don’t just extend to callers and their complaints. A savvy contact centre will make use of design thinking to not only better “design” the customer experience, but also to improve products, identify operational flaws, drive sales, increase up-sales and cross-sales, and ultimately fatten up their business’s bottom line.
Many companies now employ advanced text and voice-based sentiment analysis, to analyse call centre agent records, identify customer concerns, highlight trends and patterns, and provide early warning capabilities. Many more also cross-reference their call centre data with their transactional data records, providing every contact centre agent with valuable knowledge about the customer. With this information, not only can they provide better customer service, but they can also turn the customer service channels into product research channels, as well as active sales channels. Contact centre records are an untapped resource that can provide valuable insights into how products and services can be improved and differentiated from their competitors.
When a mass of information meets the technology needed to unlock it, the sky is the limit in terms of the strategic advantage it gives businesses. The only challenge that remains is for companies to figure out how to use the information they generate to its maximum potential. For design thinking to provide any real return on investment, the analytics need to drive action, not only insight, and should be the basis of the future CRM strategies that companies employ.
With customers being more efficiently and accurately catered for in every step of their customer journey, and businesses gaining valuable insights into every aspect of their customers’ experience, big data analysis in contact centres is a win-win situation that is set to become the gold standard in CRM, no matter what industry you are in.
