Advertisement feature from Arvato CRM Solutions
Colin Gittens, Director of Operations – Private Sector, Arvato CRM Solutions, and Jason Craker, Transformation Director (Automotive), changemaker
As reported in AM Online last month, we saw the wheels start to turn on Volvo’s much-anticipated shift to agency model for their UK market.
Now, it’s not a matter of if other traditional OEMs join in, but when. The only points up for debate are how quickly this will happen, and how successful it will be.
What results are these first movers pursuing? What’s going to give brands the advantage? And for the new entry disrupters, who will successfully navigate the rather unique market presence in Europe?
Why are we seeing the shift?
For OEMs, the primary benefit of the agency model is that it provides an opportunity to better understand and directly engage with their drivers.
Traditionally, customers have bought vehicles almost entirely from dealerships. As a result, dealers not only owned the financial risk, but also owned nearly all driver interactions.
Under the agency model, the contractual agreements are shifting from the dealership to the manufacturers.
The OEM becomes the first point of contact, from handling the highly regulated financing process to ongoing ownership queries. Meanwhile, the dealership takes a more focused role in several critical customer experiences, such as handover and test drives.
If OEMs and their retail partners can effectively capitalise on the opportunity of the agency model, it will be a major step towards what we believe is the future of the automotive retail ecosystem – creating lasting, ‘sticky’ customer relationships, with multiple exchanges of value.
What are the ingredients for success?
Manufacturers and their retail partners must be able to control, extract data from, and then re-deliver value across every customer touchpoint.
This is a customer experience (CX) challenge – and a business imperative. Those that get ahead will be those that can:
1) Deliver true multi-channel service, across the customer journey
The agency model is inherently multichannel. Consumers’ first touchpoint is usually via car configurators, but this still needs to sit alongside traditional channels like face-to-face service and phone, as well as digital platforms, such as social media.
Customers’ demands, based on existing online retail experiences, will expect a seamless process, with the same high quality of service throughout their journey.
2) Building unique 360-degree individual views
The expectation of consistency makes the capability to centralise and share information critical.
Developing connected customer experience channels, built around a detailed, 360-degree view of the driver is a must.
Keeping this up to date can be an operational challenge – particularly if customer information is spread between the retailer and the manufacturer. Using intelligent automation technology to gather data on driver interactions in real-time and store in a central CRM is invaluable.
3) Personalised service
Having a centralised, up-to-date customer view unlocks opportunities for hyper-personalisation.
Arvato CRM Solutions’ recent research found that more than two fifths (42%) of drivers would look to change the brand they bought from if they didn’t receive a tailored service.
With a mutually accessible picture of the driver, both the retailer and the manufacturer have the foundation to tailor their service offering, helping keep drivers on board.
Route guidance
The transition to the agency model is a major pivot for the sector; this transformation requires different skill sets from the existing operational mindset needed in many organisations. That’s why it’s so valuable to leverage expertise of partners from across the ecosystem.
At Arvato CRM Solutions and changemaker, we’re working with our automotive partners to help them capitalise on this transformation.
You can watch more of our thoughts on the path to successful agency models in a short animation we’ve produced here, read more of changemaker’s insights into the state of the sector here, and download our joint report into how brands can drive greater value from data and customer relationships here.
To find out more, please contact [email protected] or [email protected].
