Industry Focus: How Digital Touchpoints Are Changing Customer Experience in the Global Auto Industry.

The global automotive industry has been experiencing a paradigm shift in recent years, driven by the rapid advancement of digital technology, combined with the opportunities and challenges of moving to electrified platforms. The advent of digital touchpoints has transformed the way customers interact with automotive brands, enabling them to engage with their preferred brands in new and innovative ways. In this article, we will explore how digital touchpoints are changing customer experience in the global automotive industry.

Digital Touchpoints Defined

Digital touchpoints refer to the various channels through which customers interact with brands through digital interfaces. These touchpoints can include websites, social media platforms, mobile applications, chatbots, email, QR codes, OTT streaming TV, etc. Digital touchpoints have become increasingly important for businesses as consumers, charged by generational shifts increasingly prefer to interact with brands digitally and have come to expect a seamless and integrated digital experience across all channels.

The global automotive industry has been quick to embrace digital touchpoints as a means of enhancing the customer experience. Automotive brands have invested heavily in developing digital channels that offer a range of services, from vehicle configuration to online purchase, and from service scheduling to remote diagnostics to name just a few.

The Importance of Digital Touchpoints

Digital touchpoints are any point of interaction between a prospect or customer and a company that occurs through digital channels. They are becoming increasingly important in the automotive industry as customers increasingly prefer to research and purchase vehicles online. In fact, a recent study by Autotrader found that 88% of car buyers use the internet to research their purchase, and 72% would consider buying a car entirely online.

Digital touchpoints allow car manufacturers and dealers to provide a more personalized and engaging experience for their customers. They can use data analytics to track customer behavior and preferences, allowing them to deliver targeted marketing messages and provide tailored product recommendations. This can lead to higher conversion rates and increased customer satisfaction and loyalty.

Digital touchpoints also provide a more convenient and efficient way for customers to interact with car manufacturers and dealerships. For example, customers can book test drives, schedule service appointments, and even purchase vehicles entirely online. This can save customers time and hassle and can lead to a more positive customer experience, while improving OEM’s and dealer’s bottom lines.

Some Example Digital Touchpoints in the Automotive Industry

Digital touchpoints are transforming the customer experience in the automotive industry. Here we dive a bit deeper in some of the key methods, approaches, and tactics in which digital touchpoints are changing customer experience:

Personalized Experiences

Digital touchpoints enable automotive brands to personalize the customer experience in ways that were previously impossible. By collecting and analyzing customer data, brands can create personalized recommendations, offers, and experiences that are tailored to each customer's individual preferences and needs. For example, when a customer visits an automotive brand's website, the brand can use cookies to track the customer's behavior and offer recommendations based on their browsing history.

Another way digital touchpoints are changing the customer experience is by allowing for more personalized interactions between brands and customers. Customer data collected through digital touchpoints can be used to create personalized recommendations for vehicles and services based on a customer's preferences, driving history, and past purchases. For example, a customer who frequently travels long distances may be recommended a car with better fuel efficiency.

Digital touchpoints also allow for more personalized marketing and advertising campaigns. Brands can target specific customer segments based on their interests and behaviors, creating more relevant and engaging campaigns. This personalized approach not only improves the customer experience but also increases the likelihood of customer loyalty and repeat business.

Convenience

Digital touchpoints have made it easier than ever for customers to interact with automotive brands in a frictionless way. Customers can browse inventory, configure vehicles, schedule service appointments, and even purchase vehicles entirely online. By eliminating the need for customers to physically visit dealerships, digital touchpoints have made the customer experience more convenient and accessible.

Transparency & Trust

Digital touchpoints have increased transparency in the automotive industry, enabling customers to access information about vehicles and services easily. Digital touchpoints are also helping to increase transparency and trust between customers and automotive brands. Online reviews and social media give customers a platform to share their experiences and opinions about a brand, which can help build trust with other potential customers. Automotive brands that actively engage with customers through social media and respond to customer feedback and complaints can also improve customer trust and loyalty.

This same data can help inform and improve product feedback loops for the OEMs and dealers. Direct, unadulterated product feedback from customers own real world experiences can be used to inform; lean manufacturing systems, production system process improvements, quality management systems, and product development.

Digital touchpoints also provide customers with more transparency into the buying process. Online marketplaces and mobile apps often provide detailed information about a car's history, including accident reports, maintenance records, and ownership history. This increased transparency can help customers make more informed decisions about their purchases. Improved transparency has led to more informed and empowered customers who are better able to make purchasing decisions.

Digital Touchpoints in the Car Buying Process

Digital touchpoints are particularly important in the car buying process, which can be complex and time-consuming. Customers often spend months researching different makes and models, comparing prices, and negotiating with dealerships. Digital touchpoints can simplify this process, providing customers with the information they need to make informed decisions and making the process more transparent.

One example of how digital touchpoints are changing the car buying process is through online configurators. These tools allow customers to build and customize their ideal vehicle, selecting different features, colors, and options. This can help customers visualize their vehicle before they purchase it, leading to a more informed and confident purchase decision.

Digital touchpoints can also provide customers with more transparency in the car buying process. For example, online marketplaces such as Carvana and Vroom allow customers to purchase vehicles entirely online, with no haggling or negotiating required. This can provide customers with a more straightforward and stress-free purchasing experience.

After-Sales Support

Digital touchpoints have also revolutionized after-sales support in the automotive industry, which happens to be a massive driver of long tail revenue in the industry. Brands can now offer remote diagnostics and support, enabling customers to receive assistance without having to physically visit a dealership. This has made it easier for customers to maintain their vehicles and has led to increased customer satisfaction.

Digital touchpoints are also changing the way customers interact with car manufacturers and dealerships after they have purchased their vehicles. After-sales service is a critical component of the customer experience, and digital touchpoints can help car manufacturers and dealerships provide a more convenient and efficient service.

One example of how digital touchpoints are changing after-sales service is through mobile apps. Many car manufacturers now offer mobile apps that allow customers to schedule service appointments, track the progress of their service, and even pay for their service entirely through the app. This can save customers time and hassle and can lead to a more positive after-sales experience.

Digital touchpoints can also provide car manufacturers and dealerships with more opportunities to engage with their customers after the sale. For example, they can send targeted marketing messages promoting additional services or accessories or provide customers with personalized recommendations for maintenance and repairs. This can lead to increased customer loyalty and higher revenue for the car manufacturer or dealerships, while improving customer lifetime value (CLV).

Customer Engagement

Digital touchpoints have transformed customer engagement in the automotive industry. Brands can now engage with customers in real-time, responding to queries and providing support through social media channels and chatbots. This has enabled brands to build stronger relationships with customers, increase brand loyalty, and improve customer retention and CLV.

Improved Accessibility & Convenience

One of the primary ways digital touchpoints are changing the customer experience in the automotive industry is by improving accessibility and convenience. In the past, purchasing a car required visiting multiple dealerships, negotiating with salespeople, and filling out paperwork. Today, customers can research and purchase vehicles entirely online, often without ever leaving their homes. The availability of online marketplaces and mobile apps that offer features like virtual test drives and online financing options has made buying a car a much more convenient experience.

Digital touchpoints have also made it easier for customers to access information about cars and compare prices between different brands and models. Online reviews and social media have given customers more transparency into the buying process, allowing them to make more informed decisions about their purchases.

Case Study: Tesla Motors

Tesla is one of the most successful and innovative breakout companies in the last 100 years in the automotive industry, known for its electric vehicles and cutting-edge technology. Digital touchpoints have been a key component of Tesla's success, allowing the company to differentiate itself in the market, grow market share, increase revenues, and transform the customer experience. In this case study, we will explore how Tesla has successfully leveraged digital touchpoints to achieve these goals.

Differentiation in the Market

Tesla has differentiated itself in the market by focusing on innovation and technology, and digital touchpoints have played a critical role in this strategy. Tesla's website, for example, provides a seamless and user-friendly experience for customers, allowing them to research and configure their vehicles online. The website also provides detailed information about Tesla's technology and features, such as Autopilot and Supercharging, which sets Tesla apart from traditional automakers and its cohort of peers.

Tesla has also differentiated itself in the market by leveraging social media and digital marketing in ways that are disruptive in the industry. The company has a significant presence on social media platforms such as Twitter and Instagram, where it shares news and updates about its products and technology. Tesla has also used digital marketing to promote its vehicles and technology, targeting specific audiences with personalized messages and ads, all doing so with little to no marketing budget.

Growing Market Share

Tesla has achieved significant market share growth in recent years, and digital touchpoints have been a critical component of this success. Tesla's website and mobile app allows customers to easily research and purchase their vehicles, without the need to visit a dealership. This provides a more convenient and efficient way for customers to purchase a vehicle, which has been particularly important during the COVID-19 pandemic when many customers are hesitant to visit physical locations. Of late, as Tesla has begun globally to open its Supercharging network to non-Tesla EVs. The use of the Tesla mobile app by non-Tesla customers can also be seen as a trojan horse of sorts, adding Tesla’s charging convenience a direct-to-consumer (DTC) communications channel into the broader EV lexicon and will likely attract future Tesla customers.

Tesla has also leveraged digital touchpoints to expand its customer base. The company has used social media and digital marketing to target specific audiences, such as environmentally conscious consumers and tech enthusiasts, who may not have previously considered purchasing an electric vehicle. This has helped Tesla to grow its market share and reach new customers who may not have been aware of the company before.

Increasing Revenues

Digital touchpoints have also played a critical role in Tesla's ability to increase its revenues. By providing a seamless and convenient purchasing experience through its website and mobile app, Tesla has been able to sell more vehicles and generate more revenue per vehicle. In addition, Tesla's technology, and features, such as Autopilot and Supercharging, have enabled the company to charge premium prices for its vehicles, leading to higher revenues per sale.

Tesla has also leveraged digital touchpoints to increase revenue through after-sales services. The company's mobile app allows customers to schedule service appointments and track the progress of their service, which can lead to increased revenue from maintenance and repairs. Tesla has also used digital touchpoints to sell additional services and accessories, such as extended warranties and performance upgrades, which can lead to higher revenue per customer.

Transforming the Customer Experience

Perhaps the most significant impact of digital touchpoints on Tesla has been in transforming the customer experience. By providing a seamless and user-friendly experience through its website and mobile app, Tesla has been able to create a more positive and engaging experience for its customers. This has led to increased customer satisfaction and loyalty, which is critical in a highly competitive industry.

Tesla has also transformed the customer experience by providing innovative and convenient after-sales services. The company's mobile app allows customers to easily schedule service appointments and track the progress of their service, without the need to visit a dealership. Tesla's Supercharging network provides a convenient and efficient way for customers to charge their vehicles on long-distance trips, which has been a significant selling point for the company.

Tesla has used digital touchpoints to revolutionize the automotive industry:

Vehicle Configuration

Tesla's website enables customers to configure their vehicles entirely online, selecting options such as color, interior, and performance specifications. This enables customers to customize their vehicles to their exact preferences, without having to visit a dealership.

Remote Diagnostics

Tesla's vehicles are equipped with sensors that continuously monitor the vehicle's performance. If an issue arises, the vehicle can automatically send a report to Tesla's service team, who can then diagnose the issue remotely and schedule a service appointment if necessary.

Website & Mobile Applications

Tesla's website and mobile app are crucial digital touchpoints that allow customers to research, configure, and purchase vehicles. The website is designed with a user-friendly interface that provides detailed information about Tesla's products and technology, including features such as Autopilot and Supercharging. Customers can also configure their vehicles online, selecting from various options such as color, wheels, and interior design.

Tesla's mobile app provides customers with a seamless and convenient way to manage their vehicles and services. Through the app, customers can schedule service appointments, track the progress of their service, and receive updates on their vehicle's status. The app also allows customers to remotely control certain features of their vehicles, such as unlocking or locking the doors, honking the horn, and even starting the vehicle.

Tesla has leveraged these digital touchpoints to provide a more personalized and engaging customer experience. By allowing customers to configure their vehicles online and manage their services through the app, Tesla has eliminated many of the pain points associated with traditional dealerships, such as long wait times and inconvenient scheduling. This has resulted in higher levels of customer satisfaction and loyalty.

Social Media

Tesla has a significant presence on social media platforms especially with Twitter, Instagram, and YouTube. The company uses these platforms to good effect to share news and updates about its products and technology, as well as to engage with customers and enthusiasts.

Tesla's social media presence has been instrumental in building a strong community around its brand, even ignoring some of Elon Musk's tweets that may produce the oppositive effect. The company's social media accounts have millions of followers, and Tesla frequently shares user-generated content from customers and enthusiasts. This has helped to create a sense of community and belonging among Tesla's customer base, which has contributed to higher levels of customer loyalty.

Digital Marketing

Tesla has used digital marketing to target specific audiences with personalized messages and ads. The company has used social media advertising to target environmentally conscious consumers, tech enthusiasts, and other groups that may be interested in electric vehicles and Tesla's technology.

Tesla's digital marketing campaigns have been highly effective in generating awareness and interest in the brand. The company has been able to reach new audiences and convert them into customers by leveraging targeted messaging and advertising.

Supercharging Network

Tesla's Supercharging network is a key component of its digital touchpoint strategy. The network provides a convenient and efficient way for Tesla customers to charge their vehicles on long-distance trips, with Superchargers located along major highways and travel routes.

The Supercharging network is integrated into Tesla's mobile app, allowing customers to easily find and navigate to nearby Superchargers. The app also provides real-time information about Supercharger availability and charging status, which helps to reduce wait times and improve the overall charging experience.

By providing a reliable and convenient charging network, Tesla has eliminated one of the major pain points associated with electric vehicles - range anxiety. This has contributed to higher levels of customer satisfaction and removal of real or perceived barriers to purchasing Tesla’s EVs.

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