Closer relationship with more customers

In the coming years, it will not be the transition to electric driving that will be the most important thing that managers and entrepreneurs in the car industry should deal with, but the duration of the relationship with the customer and especially with the car. At the same time, the changing customer base must be expanded. This task applies to both dealers and universal car companies.

At a recent conference in Vienna on the future of the aftermarket and after-sales, the approach that the independent channel should take in due course, to strengthen customer relations, especially when it comes to battery-powered electric cars. According to various advisers, extending the life cycle of the car is key, which must be translated into a longer relationship between the car company and the car, including its second and third owner. In this respect, the independent channel is currently in danger of falling behind. The brand channel is busy sharpening its marketing knives.

on the edge

Extending the car’s life cycle and thus the relationship with the customer means the need to invest in (online) marketing and digitization in general, from the customer journey for a young used car to all workshop activities. You need to want to see after sales in a broader perspective. This already requires investments in ADAS, in employees, in certification and of course in the EV transition. However, these investments require a larger scale in order to earn them: more customers, larger processing areas and, above all, an expansion of the relationship between brand, car company, car, customer and other service providers, including insurance companies.

In dealer countries, this approach is already encouraged or even enforced by car manufacturers, resulting in fewer dealer owners and the transformation from dealer to the much talked about agent model. The larger reseller groups that are left must definitely increase their customer base. Whether it succeeds depends on the extent to which the car manufacturers take customer control within the new agent model.

Vehicle data

Kia has for a long time offered a six-year warranty and has been progressive with it. Other brands also extend their warranty periods. The announcement by Lexus and Toyota to introduce a 10-year warranty should alert other service providers. These warranty periods will otherwise be partially transferable. Managing mandatory dealer maintenance and setting up a data flyer is part of this. The goal here is also to expand the relationship with the customer and especially the car (including the second and third owner). The electric car is important here, because the customer seems to be an absolute supporter of it.

It’s about customer loyalty in return for longer security with regard to his or her mobility. This is exacerbated by the uncertainty of battery life. The aforementioned “tick” should therefore not be ignored. The discussion on access to vehicle data will continue for at least one year before the Brussels rules are implemented. The fire channel therefore has at least twelve months to build up a significant lead in relation to the independent channel and to gain customer experiences.

When we talk about it, the barriers that OEMs raise still create uneven ground rules, especially in the aftermarket area. In Brussels, the green check mark is now set for this file. The chance is almost 100 percent that parties from the independent channel next year will be able to own almost all vehicle data, provided the customer obviously wants it. The question is whether inequality disappears completely because the fire channel is creative and they want to bend the rules of the game through over-air functionalities and extended warranty periods. Equal terms: yes, equal opportunities: not quite.

Workshop concepts

The recent acquisition of Vakgarage by LKQ Fource once again underlines the importance of workshop concepts. Now LKQ Fource is not the only one with its own workshop concepts. Alliance Automotive Benelux, PHE-Doyen and to a lesser extent WM all have their own marketing formulas. Bosch supports its own two concepts, Bosch Car Service and Autocrew, and works with the major spare parts distributors.

These formulas are, of course, strongly supported in exchange for sharing revenue. The concepts must also enable participating car companies to gain a competitive advantage. All this support from parties with ‘deep pockets’ means that car companies that have to search for their customers and develop services on their own – ie without a concept – risk losing the joint marketing power of the concept and franchisees with their distributing partners, because like the fire channel parties focus on customer loyalty.

Connection is the common thread. Over-air functionalities become crucial. Initially, they are the domain of the brands, but the independent channel will also develop new services and revenue models, especially to keep up with the car. Only then will tomorrow’s driver also become tomorrow’s customer. Realizing this is today’s challenge. Waiting until tomorrow is not an option; the customer is not waiting either.

Leave a Comment