3 practical steps to unlock exceptional automotive aftermarket value and ownership experiences
Aftermarket is no afterthought
Compared to the polish and sex appeal of launching and marketing the latest hot vehicle brands and models with hero photography, Super Bowl ads, innovative marketing tactics, and massive budgets, most automotive original equipment manufacturers (OEMs) have long treated aftersales, warranty, recall, customer service, and owner engagement as a critical part of automotive operations, but not a brand-defining differentiator. Instead of prioritizing aftermarket services as an opportunity to proactively remove effort to personalize customer relationships, some automakers have relegated aftersales activities, aftermarket services – and to some degree vehicle owners themselves – to a relative afterthought.
Underestimating the economic impact of aftersales and ownership experiences is an enormous strategic mistake given that:
- Margins for aftermarket services are 25-30%, while median profit margins for automotive sales are only 9%.(McKinsey & Company)
- Automotive OEMs alone account for between 40% and 45% of the warranty expenses of all U.S.-based manufacturers. (Warranty Week)
- Warranty claims impact OEM revenues by approximately 3.3%. (MSX International)
- 914 recall campaigns affected 29.3 million U.S. vehicles in 2018 alone. (National Highway Traffic Safety Administration)
- 72% of vehicle owners would pay a flat monthly fee for “invisible” effortless service, including convenience services like vehicle pick up from and return to home. (Accenture)
Despite these stakes for automakers and the reality that for every new vehicle sold, OEM and dealer processes are interdependent, most vehicle ownership journeys are still filled with roadblocks, impersonal and irrelevant interactions, and disruptions. Given that these challenges have persisted for decades, the failure to eliminate them treats consumers as if they were merely a captive market that didn’t already have a vast and growing set of alternatives to spending their transportation and mobility dollars, pounds sterling, euros, and yen.
The long-held industry excuse remains that it is still too difficult and too expensive to make these substantial changes due to the complexity of the current aftersales operating model and capabilities shared by OEMs and dealers. Yet keeping the current model functioning and existing ownership experiences “tolerable” demands repeated heroic efforts on the part of dealers, OEM employees, and consumers themselves to “connect the disconnected” in order to use, maintain, repair, renew, and support seamless vehicle ownership – all at incredible cost. The most frequent response of everyone involved: exasperation.
The real root cause?
Random, manual acts of aftersales solutions are perpetuating disconnected ownership experiences
One-off applications of various vintages commonly power the critical journeys and micro-journeys associated with:
- Customer service, roadside or service tech inquiries, outreaches, or truck rolls
- Recall campaign operations and activities
- Warranty repairs, claims and reimbursements
The industry still relies on too many legacy aftermarket point solutions and delivery approaches. The problem is that these activities are typically not aligned, connected, and automated end-to-end within each journey. And more unfortunately, these interdependent activities that span critical ownership moments are still substantially manual, disconnected, or misaligned from each other despite the massive owner, vehicle, and experience data and insights they share across those people, process, and technology silos.
What is left is too much manual effort, too many critical insight gaps, too much time and cost wasted on non-value-added processes, interactions, and experiences, making consumers and dealers angry and understandably disloyal.
Unlocking simplicity in the aftermarket finally puts owners first
Weeks ago, hundreds of global automotive executives gathered in Southern California at the 15th annual Automotive CX Summit to address ways to redefine the experiences and journeys of how consumers shop and buy – but especially own, use, and drive vehicles. The focus was on harnessing technology to digitize and automate processes and strategies that leverage data, customer insights, and urgency for the industry’s cultural change.
However, this focus is not just about delivering either exceptional, connected proactive customer service, or roadside or field technical service or recall or warranty experiences as individual journeys. And it is certainly not about replacing existing individual legacy applications or technologies with newer individual solutions either.
More strategically, it’s about marrying complex aftersales operations, interactions, and experiences together, end-to-end, with a unified, scalable automation and customer engagement foundation. This approach is one that leverages native mobile and digital capabilities often in conjunction with an OEM’s legacy solutions to unlock exceptional, connected experiences that provide better service and more value at critical moments within each journey and across the owner and vehicle lifecycle. Time and again we’ve seen this connected “wrap and renew” approach eliminate process gaps and silos, customer and dealer disruption, and unnecessary effort, while capturing untapped aftermarket economic value.
When it comes to putting owners first there are three critical steps that OEM aftersales, digital, and customer experience leaders should take now to connect data and services and capitalize on the mandate and opportunity to modernize operations and vehicle owner experiences:
- Build customer value in every vehicle or service interaction. Put the connected vehicle to work to deliver the digital service that your customers expect. With its abilities to provide real-time updates, the connected vehicle enables you to anticipate needs and detect events instantaneously. Then by applying intelligent automation by introducing AI-enabled case management, omni-channel customer engagement, and decisioning capabilities designed for industrial scale into the mix, you can finally create personalized vehicle owner and user experiences in the moments that matter. A platform like Pega InfinityTM makes this rapidly possible with clicks instead of code.
- Orchestrate intelligent, frictionless service roadside or in the bay. Your owners and users want to feel safe and secure in their vehicles. That means when something goes wrong, they want the issue resolved or repaired fast. As above, a connected approach powered by these same AI-enabled case management, omni-channel customer service, field service and decisioning capabilities ensure that technicians know what to do no matter where they are and provide consumers and dealer techs with critical assisted “push button” service anywhere, anytime.
- Simplify the warranty and recall experience. Make sure your ownership services and experiences are close to perfect, even when your vehicles are not. Connecting, streamlining, and automating workflows across process, system, organizational silos and boundaries benefits consumers, dealers, and regulators alike. Fully connected end-to-end processes help make the claims and recall process more efficient, eliminate disruption, drive compliance, and enable rapid recovery of under-warranty investments – all with less effort than ever before. Native case management capabilities in both Pega’s core platform and Warranty Management offerings eliminate the complexity, cost, and time excuses that have long paralyzed OEMs aftersales transformation efforts.
Leading automakers are already unlocking their ability to deliver more seamless, non-disruptive ownership experiences by automating critical aftermarket operations – one journey or microjourney at a time. The most successful OEMs understand that they must tackle the gaps in their most critical aftermarket services domains strategically, holistically, within those journeys – and across the moments that matter. This requires a unified, scalable, architectural approach which is future-proof for the incredible speed of industry change and unrelenting consumer expectations.
Bottom Line: Goodbye silos. Hello seamless, intelligent aftermarket and ownership experiences
Overcoming the challenges of disconnected ownership experiences and aftersales processes requires collaboration across functional domains, organizational boundaries and capabilities with a common automation and engagement platform foundation. Because of the stakes and impact for automakers, dealers, and consumers, a new approach is more essential than ever. As I wrote in 2018, and which is equally apropos here:
When it comes to aftermarket owner and user experiences, there is an urgency for auto manufacturers … and dealer partners to reimagine and intelligently orchestrate the fragmented channels, processes, decisions, and messages necessary to cultivate customer loyalty. Today’s consumers expect and demand it.
- Download this executive brief to learn how automakers are leveraging digital tools to put owners first – for real.
- Read how OnStar is using decisioning to increase renewals, retention, and revenue and support 7 million subscribers.
- See how Nissan is using digital process automation and case management to guide their “fix it right first time” service solution.
- Discover how Pega for Manufacturing, Automotive & High-Tech helps some of the largest brands streamline operations and deliver smart, connected, customer service.