Project Butterfly: Automotive Customer Journey

Goals

To provide information associated with retail and omnichannel consumer journey tracking (focused on the automotive industry) to help a client determine whether information currently exists around this topic. The response should focus on best-in-class case studies, recent information or data around the consumer journey (with a focus on how this information is used to measure or improve consumer loyalty), and online and in-store specific statistics or data points that illustrate how companies are tracking the consumer journey to optimize consumer retention.

Early Findings

Automotive Customer Journey

  • A February 2020 Cox Automotive article identified three key stages of the automotive customer journey, including research (online and in-person), acquisition (purchase), and ongoing relationship (including service).
  • Cox notes that the consumer experience is increasingly important in the consumer journey, and 2/3 of consumers would switch brands or pay more for a better (more frictionless) consumer experience. The steps of the process that require the most effort by consumers are acquisition and service (both of which may ultimately influence loyalty and future purchase). Cox reports that the majority (89%) of dealers "must find alternative ways to sell and service vehicles if they want to survive."
  • GSM marketing offers a similar omnichannel automotive consumer journey framework, including consideration (research and test drive), purchase, service, conquest ("an ongoing phase where you’ll win over prospects who are new to the area, your previous customers, or your competitors’ dissatisfied clients"), and repurchase.
  • COVID-19 has driven more of the consumer journey online, with an April 2020 survey by Autotrader finding that 62% of consumers are open to completing the entire purchase process online.

Research and Consideration

  • Google reports that 95% of car buyers use digital as a source for information in their auto purchase journey, with 3 weeks the average amount of time spent on research.
  • The Digital Marketing Institute found that 6 of 10 car buyers are undecided when they begin the research process, but have typically decided on the car they want to purchase by the time they arrive at the dealership.
  • Video research and virtual reality were highlighted as key means of encouraging brand consideration. In an April 2020 article, GSM marketing cited virtual test drives, virtual showrooms, vehicle walk-arounds, comparison videos, and feature-focused videos as marketing tactics that should be considered to reach younger consumers.
  • Dealership-focused marketing consultant L2tmedia reports that 75% of car buyers claim that online video influenced their purchase decision and 60 million test drives happen virtually via YouTube (versus 29 million at dealer lots).
  • V12 automotive notes that 80% of car buyers in a Cox Automotive survey leverage a third-party website in their research, with the top five including Kelley Blue Book, Autotrader, Cars.Com, Carfax, and Edmunds. Third-party websites were preferred over dealer and OEM websites at the consideration and decision stage of the funnel due to the perception of unbiased information. Still, 34% used dealer websites to search for specific vehicles and 33% OEM websites when searching for specific trim/features or purchase incentives.
  • When considering target audiences at the research and consideration phase, Nielsen found that multicultural consumers may be aware of 10-20% fewer cars, and Black and Hispanic consumers consider 6-7 brands (2 more than Asian-American and non-Hispanic America) consumers. Omnichannel advertising was found to be critical to reaching these audiences.
  • Cox Automotive found that the research and test drive stages of the consumer journey are relatively frictionless for consumers (compared to service and acquisition).

Acquisition

  • Consumers are looking to spend less time in the acquisition phase, with Cox research indicating that consumers are open to visiting dealerships, but do not want a hard-sell. Six out of ten prospective purchasers would like help from a product specialist and are more likely to trust brands that offer "no-hassle experience centers, with product displays and opportunities to drive a vehicle." More than 50% of those surveyed claimed they would switch brands who offered this experience.
  • Top frustrations with the purchase experience include "filling out paperwork/contracts", "negotiating a purchase/lease price", and "finding the best deal/price." 16% said "dealing with a salesperson" was a pain point.
  • Remaining in touch with the consumer post-purchase is also important at this stage of the journey, though GSM research found a disconnect between what consumers are seeking at this stage and what brands and retailers are delivering. 62% of customers are not contacted post-purchase and 75% of consumers are not contacted by dealers when they are actively searching and prepared for a car purchase.
  • Tom Whatley, founder of the content marketing agency, Grizzle, recommends the prioritization of digital retailing, including the personalization of the consumer automotive journey and bridging the gap between digital and physical sales (with 80% of prospective auto buyers noting they would like to sign papers online).
  • In July 2020, Tyson Jominy, vice president of data & analytics at J.D. Power, commented on the use by some automakers on financial incentives as means of switching brand loyal consumers: "There are many factors that contribute to brand loyalty, ranging from the experience a customer has when purchasing the vehicle to how driving it makes them feel. Automakers are really focused on customer retention, as evidenced by the payment plans and incentives they’ve offered since the COVID-19 pandemic broke out. Many have gone above and beyond to offer customers financial assistance during a period of economic uncertainty, which does a lot to bolster consumer confidence in their chosen brand and repurchase it in the future."

Service

  • Cox Automotive found that service is the top pain point for consumers in the automotive consumer journey.
  • 70% of consumers noted they would switch brands for an ownership experience which included picking up a car in need of maintenance and returning when complete. At-home maintenance was also considered an appealing concept in the Cox survey.
  • GSM marketing notes that service can play a role in engaging consumers, with needs at this stage revolving around quality service and trust. Online reviews also play a key role in gaining trust among the consumer base.
  • JD Power notes that the lack of parts availability impacts the service experience and loyalty. The JD Power March 2020 Customer Satisfaction Index (CSI) survey found that luxury buyers' intent to return for service drops from 63% to 30% when parts are unavailable, while mass-market buyers' intent to return for service drops from 58% to 26% when parts are unavailable.
  • The JD Power survey found that time is the most important factor driving service satisfaction, younger consumers have higher expectations, and dealerships capture 88% of service visits in 2020 (up from 79% in 2015). The company found that Lexus received the highest service ratings among luxury brands (48%), while Suburu received the highest service ratings among mass market brands (60.5%).

Repurchase

  • GSM notes that triggered communication, visibility in the digital space (on topics including features, pricing, trade-in value, and more), and personalized engagement are important to encourage engagement and loyalty at this stage of the consumer journey.
  • Cox notes the importance of "Trailblazers" as a key target audience for vehicle purchases in the next 3-5 years. This segment, representing 17% of the population (with an additional 34% considered "rising trailblazers"), has high expectations of technology, both in terms of vehicle search and features.
  • 63% of Trailblazers (compared to 34% of mainstream buyers) are open to switching brands. They are described as "...more likely to find the virtual test drive offering appealing and embrace the idea of vehicle recommendations powered by artificial intelligence (AI). Trailblazers want to use voice-controlled vehicle search systems while shopping and are also more likely to rely on AI systems embedded into vehicles to recommend service or maintenance intervals."

Dealership Consumer Journey Tracking

Auto Consumer Journey Tracking Statistics

  • There are numerous statistics that are tracked across all phases of the automotive consumer journey.
  • Understanding the online research and purchase process, including types of media consumers are engaging within the auto purchase journey and the length and composition of the customer journey are important metrics to track. Canadian auto purchasers spend 17 days researching, 35 days considering the purchase, and 10 days buying) and US car shoppers spend less than 3 months and 10 hours to research their purchase. As mentioned earlier, video is a continuing trend in the research and purchase process.
  • Understanding website satisfaction is also important, with 55% of Automotive OEM websites meeting consumer expectations and 53% of Auto Dealer websites meeting consumer expectations in 2018.
  • Metrics and data surrounding consumer feedback on the shopping experience are also important to track. 61% of auto buyers in Cox' Car Buyer Journey Study "don't feel the shopping experience has improved since their previous purchase."
  • Statistics around the dealership experience, including the overall purchase experience, pain points, interest in leveraging technology, and desire to migrate some tasks online are also key indicators of the customer experience, which impacts loyalty. 54% of consumers would buy from a dealership offering a positive experience, even if it didn't have the lowest price. 54% of Canadian Gen Y/Z consumers find using their mobile devices during a dealership visit to be useful.
  • Some specific important auto dealership metrics, which largely revolve around customer experience, include Customer Satisfaction Score (CSAT), Net Promoter Score (NPS, which indicates the likelihood of recommending), churn rate (a measure of customer satisfaction and retention), customer health (which can also leverage customer reviews among those that are most and least satisfied), Would You Miss Us (WYMU), and an aggregated loyalty measurement (which includes repurchase, satisfaction, and brand recommendation).

Case Studies

Mercedes-Benz

  • Mercedes-Benz highlights "outstanding customer experiences are central to building customer loyalty and retention at the dealership and brand levels." They also know that "the keys ultimately rest in the hands of dealers, who continually focus on delivering outstanding experiences with speed and responsiveness."
  • The company worked with outside company Medallia, to implement (via mobile data collection) a real-time social listening platform, which collects consumer input across their brands and focuses on optimizing the customer experience and solving any issues as quickly as possible. The result is a brand/dealership-consumer engagement loop, which is intended to increase satisfaction and improve customer loyalty. The platform also allows them to test new concepts among consumers, such as one that offered more efficient maintenance scheduling.
  • Mercedez-Benz's solution is focused on meeting consumer needs across the full journey (i.e., it may be applicable to any stage of the journey). Results include higher dealer engagement and responsiveness, a higher NPS at the service and sales stage, and the ability to test and implement service improvements.

Jaguar USA

  • Focused squarely on the awareness/consideration stage of the consumer journey, Jaguar USA leveraged mobile Facebook and Instagram advertising to promote awareness and favorability of its Jaguar F-TYPE sports car model. In addition to driving brand awareness and favorability, another goal of the campaign was to "make a lasting impression with luxury automobile enthusiasts" (which can be somewhat tied to an effort to build brand loyalty).
  • The targeted campaign resulted in an 11-point lift in awareness and a 12-point lift in favorability (compared to a TV campaign, which yielded a 9 and 7 point lift, respectively).
  • The company felt the campaign was a success in meeting its objectives: "We were beyond pleased to see the results, which only confirmed the importance of prioritizing building our assets with the mobile consumer in mind."

Driver's Village

  • Dealer group, Driver's Village, leveraged multi-channel, digital marketing with a focus on increasing both digital engagement (measured by website engagement, time spent on dealer website, % using payment tool on the website), and other digital focused-metrics, such as % selecting F&I (Finance and Insurance) add-ons online.
  • The case study can be accessed here.
  • Driver's Village observed that shortly after introducing digital F&I, 50% of deals included this option. They also found that 50% of consumers engaged with digital retailing solutions and the online payment tool was used 10,500 times.
  • Dealer's Village CIO, Firas Makhlouf, noted that these key customer metrics indicated their digital retailing strategies were successful: "We told our customers, ‘Come to Driver’s Village, engage with our digital retailing tools, and do it at your own convenience. And what we’re seeing is higher growth. Our market share is strong and our profits are strong as well."

Recent Articles Referencing Consumer Journey Statistics and Data

  • This 2019 article highlights the importance of a consumer journey framework in automotive, top touchpoints, and influencers in the consumer journey for Australian car brands and OEMs.
  • This October 2020 Bloomberg article discusses the evolution of the car buying process to "online-only" due to COVID-19.
  • This article provides a number of statistics across the digital car-buying journey.

Summary of Early Findings

  • There was abundant Information around the automotive consumer journey, including surveys, consultancy insights, case studies, and news articles. We also noted that several car brands conduct concept testing with current and future car buyers to optimize their experience.
  • Most of the journey and engagement metrics we found were at an aggregate level, produced by companies such as Cox and it is clear the consumer journey is complex and evolving. Numerous metrics across the journey stages are provided and used by automotive brands and dealerships to understand and engage the consumer.
  • We were able to provide a framework of the automotive consumer journey, with a number of statistics provided at each stage. Metrics used to track the consumer journey among auto brands and dealerships (with a focus on improving consumer loyalty) appear to focus heavily on optimizing the customer experience. Several of the case studies highlight methods (such as social listening, compelling ad creative, and digital retailing) used to engage the consumer and provide metrics including engagement, brand favorability, dealership experience, and likelihood to return for service as some tracking statistics that measure success in driving customer engagement and loyalty.
  • We also noted that the consumer journey is not necessarily an end-to-end process (finishing at the purchase stage), with retailers and brands looking to increase consumer loyalty focusing on an ongoing, circular, consumer engagement process.
  • We focused exclusively on automotive brands and dealerships in this early research, though this can be expanded to include non-automotive brands in further research if that is of interest.
  • Early research leverages information available at a country-specific or global level. If a more targeted focus is of interest, that will need to be noted in the comments for further research.


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