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In 30 seconds

  • Customer loyalty in the aftersales market is being undermined by independent providers and a switch-happy younger generation. To stay in the game, OEMs face many challenges
  • OEMs need to adapt to the changing and conflicting expectations of their consumers by providing exemplary service, personalized communications and round-the-clock information
  • We explain how OEMs can meet these expectations in a world where eight in 10 cars will soon be connected

For OEMs, aftersales cannot be an afterthought. Via their affiliated workshops, they boost profits through sales of parts and vehicle services. By engaging with customers after the sale, they also build stronger relationships and line up the new vehicle sales of tomorrow.

Yet the aftersales market is being shaken up by several important trends. Firstly, the connected features in today’s vehicles enable remote access to the OEM. This makes it easier for owners and drivers to plan maintenance and repair work, and means as well that the vehicle’s software can be updated over-the-air to enable remote repairs and new services. Secondly, connected features are transforming how OEMs and their customers stay in touch, providing a new communication channels such as the car’s human–machine interface (HMI). Connected technologies also provide fresh insight into customer driving habits, which helps OEMs deliver a more effective maintenance service (as we explore below).

The aftersales market is being shaken up by several important trends

Furthermore, OEMs are defending their aftersales businesses from the independent aftermarket (IAM). According to new BearingPoint research (note 1) – which surveyed more than 1,000 Audi, BMW and Mercedes owners in Spain, Germany and the UK – more than one in three drivers (35%) prefer IAM workshops. This proportion rises to more than four in 10 (42%) if we look at drivers under the age of 35.

In this article, we describe how OEMs can outcompete the IAM by building an experience and suite of services that make better use of the data created by connected cars. In turn, they can unlock new revenues and achieve higher utilization and retention through their workshops.

How? Ultimately OEMs need to look at the customer journey in a new way – they need to break it down and understand the opportunity that connected car data creates at each stage in the process.

Stage one: insight for a proactive relationship

At the first stage of the aftersales journey, the customer will be informed that it’s time for a service – either because a certain number of miles or time period has been clocked, or because the onboard software or a service expert has noted the car needs an (unexpected) service.

For a significant minority of drivers in our survey, this is a make-or-break moment: four in 10 (39%) compare different service offers before making an appointment at a workshop; and younger and price-conscious customers are even more likely to shop around.

For the time being, OEMs have an advantage over IAMs, because they receive vehicle diagnostic data and can follow-up directly with the driver

So how do OEMs ensure that customers pick one of their affiliated workshops over an independent alternative? For the time being at least, OEMs have an advantage over IAMs, especially for the latest connected car models, because they receive vehicle diagnostic data and can follow-up directly with the driver – via the phone, app or HMI – to ask whether they would like to make a booking at a nearby workshop. By the same token, for older car models, there are opportunities to retrofit a telematics solution into the car so it can receive real-time information and even get routed to preferred workshops.

To ensure they secure the driver’s custom, OEMs should consider developing special offers that are exclusive to the driver’s needs. In our research, a clear majority (70%) of respondents say they value personalized offers for their vehicle. By combining vehicle data with personal information – such as age, gender or even locations visited – OEMs can develop a truly unique offer such as customized marketing campaigns for parts and accessories or customized products such as service contracts.

Stage two: transparency at booking

Almost three in four respondents in our survey (71%) say they want a detailed estimate of costs before they book a service at a workshop. It stands to reason that providing a full breakdown of service duration, price and costs upfront would improve the chances of them booking with an OEM over an IAM.

Informed by the vehicle’s diagnostic and usage data, OEMs can provide a more accurate quote for the cost of a service, based on their knowledge of how and where the car has been used, and the wear and tear of its parts.

As they know in advance which repairs if any will need to be carried out (most likely), OEMs can also give their customers a much better idea of the time their vehicle will spend in the workshop.

Furthermore, the OEM can ensure the workshop has the right parts in stock before the car arrives for its service, reducing the amount of time the service will take.

Stage three: the service experience

Customers expect a positive experience when they take their car into the workshop. When choosing where to have their car serviced, more than half say their choice is guided by service experience. This is why IAMs are not only focussing on price but also on the differentiation created by tailored packages and express services.

With connected car data, OEMs can plan ahead for workshop visits

In response, OEMs should increase their investment in their workshops’ physical environment and reception area to enable customer-centric retail processes, especially for their known customers. They should also ensure there is a well-informed service advisor to greet customers and access their details: more than six in 10 respondents (62%) say this is the most important part of the experience.

Since connected car data enables OEMs to know which customer will be attending their workshops, they can plan ahead by reserving parking lots and preparing the service advisor with the right information.

Further, personal advisors can explain and guide customers through their personalized services, which harness car-usage and customer data to meet their specific needs. By doing so, they help to sharpen differentiation with competitors and create opportunities for cross- and upselling.

Stage four: anticipating and managing the out-of-ordinary

OEMs can use connected car capabilities to be fully prepared for their customers’ out-of-the-ordinary needs. Today’s vehicles can, for example, predict maintenance requirements for parts that are at risk of decline by providing monthly health reports and remote diagnostics. If there is a non-routine problem with the car and it needs essential repairs, the vehicle alerts the driver – who can run a diagnostic scan and forward the results to the workshop so they can be prepared for the vehicle when it arrives. Similarly, if the technician finds an unexpected issue while carrying out the service on a vehicle, he or she could video the problem and share it with the customer through the app or HMI with a request to approve the additional work before going ahead.

Drawing on real-time diagnostics, OEMs can offer the driver faster support

By extension, OEMs can offer the driver faster and more efficient support in the event of a breakdown, by drawing on real-time diagnostics as well as recent workshop and customer data. Remote diagnostics data can feed automatically into the ordering process for required spare parts. It can also provide valuable information to roadside assistance to help them take the right parts to the damaged vehicle (which is, for example, provided through Jaguar Land Rover’s breakdown call button).

Stage five: after-aftersales

At the final stage, when the service (whether routine or unexpected) is complete, there is still more work to be done to build loyalty and ensure a repeat appointment.

Our research suggests that a follow-up communication by the workshop keeps the customer happy and helps the workshop to undertake continuous improvement by gathering feedback. One in two respondents (51%) consider the opportunity to give feedback important, and feedback is particularly important for younger drivers.

The OEM can also leave the driver with a customized maintenance plan that combines driver-profile information with maintenance and workshop data, creating additional value and customer loyalty. This can be adjusted depending on how the vehicle is used; for example, if the vehicle is primarily used for short trips.

The future: connected as normal

As connected cars become increasingly normalized, there will be implications for everyone in the aftersales ecosystem. As discussed, connectivity provides the opportunity to centrally combine customer data with vehicle/connectivity data, which is a prerequisite to enhance the customer experience. This takes the customer experience to a whole new level, since individual (offline) aftersales touchpoints are enhanced by new, digital touchpoints and integrated into one seamless customer journey, while also permitting the customer to switch freely between offline and online touchpoints. In this context, a consistent and digitally enhanced service journey is the first step in establishing a modern premium service for all customer touchpoints.

The personal touch continues to be a vital differentiator

Looking ahead, however, we can expect additional disruption to come in the form of software-over-the-air (SOTA) patches and updates, as well as greater market adoption of electric vehicles that have fewer moving parts and therefore fewer requirements for maintenance work.

At present, OEMs still have a strategic advantage over independent operators in that they receive vehicle and driver data and can use this to provide a superior experience. While this arrangement is unlikely to last forever – as customers increasingly restrict who they share their data with – OEMs should consider how they can use the data, while they have it, to innovate around the customer experience, such as by integrating with insurers and other third parties to develop combined offerings (see box-out). Done well, customers will seek out these value-adding offerings in the future, especially if they are offered in combination with a seamless digital experience and a powerful SOTA capability. By out-innovating the competition while they still have access to vehicle and driver data, OEMs can develop a compelling offering for the aftersales market of tomorrow.

Building the OEM ecosystem

OEMs can offer a one-stop solution for enhanced customer experiences. For this to work, however, they often need to harness an ecosystem of partners. If OEMs can add value to their ecosystem quickly and reach a critical mass/traffic, other participants – such as third-party suppliers – may jump on it as well. This unleashes network effects (note 2), the idea that the more participants use the ecosystem/product/service, the more valuable it becomes. With the inclusion of other value-adding partners to the ecosystem, OEMs can at once enhance the service and lower the costs, boosting the appeal of the one-stop solution to the customer (flywheel principle). The business model should focus on:

  • New digital products. The OEM has exclusive access to vehicle and driver data. Provided there is customer consent, there is the potential to leverage this data to create new products (or augment existing ones):
    • OEMs’ own products, such as OEM insurance products (pay as you drive)

    • New products co-developed with third-party organizations, such as with insurance companies (pay as you drive) offered as part of the car sales package

    • New products developed by third parties without OEM involvement (but harnessing data provided/sold by the OEM), such as apps accessed via the app-store, or parking companies offering easy payment and reservations for on/off street parking

  • Increasing convenience for the customer as real-time vehicle, customer, and product data is made available in one portal

    • Customer-specific campaigns that utilize the unique data sets from the OEM: 

  1. Recommendations based on monitoring of vehicle-specific data: for example, on the health status and vehicle configuration, such as special equipment like sport parts, or engine configuration
  2. Predictive maintenance that anticipates customer need: for example, accessories that make use of better knowledge about the customer’s vehicle as well as past and present preferences
  • Efficient service management that seamlessly integrates on- and offline channels
  1. SOTA: OEMs can update the software over the air
  2. OEMs can provide ex ante information to their affiliated workshops to reserve a service and to preorder the relevant spare parts in stock (or even to provide information to roadside assistance on which parts they should bring to the damaged vehicle)

 

"Key Takeaways"

  • Aftersales competition is fierce: more than one in three drivers choose independent facilities over an OEM-managed workshop. Drivers with older vehicles are also more likely to use independents 
  • Almost three-quarters of drivers want a detailed estimate of costs before they book; and with 39% comparing offers before signing on the dotted line, OEMs must embrace transparency to get customers through the door 
  • OEMs cannot afford to ignore the potential of bespoke deals: 70% of drivers say they value personalized offers for their vehicle
  • The personal touch continues to be a vital differentiator, with personal advisors the most important element of the service experience for nearly two-thirds of drivers 
  • OEMs can combine customer data with the car-usage data recorded by connected cars to provide a proposition that protects their business from the independent aftermarket and opens up new revenues for the future
  • Project team
    Manuel Schuler, Falk Hinderberger, Michael Falkus
  • Acknowledgements
    The authors would like to thank Piers Tomlinson from Longitude, Tanja Schwarz and Sharon Springell from the BearingPoint Institute, Nathalie Ollivier from BearingPoint, Michael Agar from Agar Design, and Christopher Norris from CopyGhosting Publishing Services.
  • Notes and Bibliography

    1. BearingPoint, ‘Survey: Service Requirements for Workshops’ (Berlin, 2016). This is an internal BearingPoint document that summarizes the survey results.

    2. Choudary, S. P., M. W. Van Alstyne, and G. G. Parker, Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You (New York, W. W. Norton & Company, 2016), 16-34.

Connected aftersales: towards a new customer journey

Connected aftersales: towards a new customer journey

Customer loyalty in the aftersales market is being undermined by independent providers and a switch-happy younger generation. To stay in the game, OEMs face many challenges

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