The new imperative for automotive OEMs is to create a better end-to-end customer experience. That includes everything from a customer-focused online engagement to creating a relationship with dealers and service providers that supports the brand. Moving from a product-centric to a more customer-centric business model will help create brand loyalty that extends beyond the customer’s first purchase.
Recall management directly affects a customer’s experience
Consider this real-life story of an actual customer experience. A repeat truck buyer who was loyal to a particular brand visited several local dealerships to pay cash for the newest make/model but was turned away and told to come back in a few weeks or months. The inventory sitting on the lot could not be sold because the dealer was waiting for replacement parts to fix a recall problem. From there the buyer went to one of the automaker’s top competitors and closed a deal. Unfortunately, within the first 12 months after the purchase - that new truck underwent four different recalls. So, what’s the vehicle owner to do?
We all know that product defects will arise from time to time and need to be addressed. How those problems are handled will have a significant impact on the buyer’s perception of the brand and the decision-making on the next purchase. Recall management can make or break the customer experience.
The risks of poor recall management
Recall activity is not waning, in fact it’s the opposite. According to the National Highway Traffic Safety Administration, recalls have generally been increasing in frequency and severity over the past decade. As recalls continue to increase, more complex product problems may arise. For the automotive manufacturer today, these problems extend beyond an operational issue into a potential negative impact on the customer’s safety and overall experience with the vehicle.
If recalls are managed poorly, there are business risks for companies over the long-term. The first is revenue related. Customer lifetime value – what the customer is worth over the long term – is a key measure for an automotive manufacturer. Will the customer remain with the same brand? When they buy an additional vehicle, do they return, creating additional revenue? The opportunity for the answer to be “yes” can be reduced with a poor recall experience.
The second is reputational risk. The news has been riddled with bad press about large vehicle recalls … and the mismanagement of some. Companies don’t want to be on the front page of the paper (or the internet) as the latest bad news story.
Unfortunately, recall management isn’t being done well across the automotive industry. The challenges are keeping people across organizations up at night - from operations to marketing and all the way to the CEO. When recalls of millions of cars are involved, even the Board will be involved. Since recalls are now a part of the business, how can a company be the brand known for managing the process well?
The right way to manage recalls – take a customer-centric approach
For years Capgemini and Pega have been working together with manufacturing companies to improve recall and aftermarket services processes and to help raise the bar across the automotive industry. We know what you need to know. It’s a common problem across all product industries.
The first step is to take a more customer-centered and proactive approach. Recall services should not be optional, but they often are. Help the customer understand the importance of the required service and make it easy for them to get it handled in a timely manner. Answer questions proactively. Where can I get the service? How do I schedule? How can I reschedule if I need to? Create more convenience for the customer at every turn and make it hassle-free.
To create that approach, increased visibility into your customer base and improved business processes – both internally and externally - are required to handle the operational and customer experience impacts. With Pega-Capgemini recall software and solutions, automakers can seamlessly manage recalls from end-to-end across dealer networks, regions, products, suppliers, regulatory agencies, and the customer base.
At some point a manufacturer is going to have a recall. It is simply a part of the product lifecycle. How a company reacts and responds to taking care of the customer and the product will differentiate you in the market. Manage it quickly and effectively and you can maintain consumer confidence in your brand.
Once you create the best possible customer experience (including recall management), supported by flawless technology and digital platforms, your company can create the end-to-end relationship that is positioned for success in a changing automotive marketplace.
Explore how Pega and Capgemini can help you resolve your recall problems, improve your product quality, build a better customer experience and increase brand loyalty.
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