Automotive Customer Expectations and Technology are Driving Change

One day in the not-so-distant future, automotive manufacturers will no longer just sell vehicles, instead selling access to and the outcome those vehicles deliver. In fact, Gen Z, a group raised predominantly by Gen X and older millennials, are the ones truly changing the automotive purchasing landscape; at nearly 67 million strong, Gen Z favors subscription services of all kinds, particularly when it comes to transportation. From ridesharing like Lyft to Uber to the many scooters and bikes from companies like Lime and Jump littering the sidewalks in many cities, their options for meeting the demand for mobility services are plenty. Add it all up, and this makes the cost of a traditional monthly auto payment less and less attractive to such a hyper-connected generation, proven true by a February LendingTree report that only 36% of Gen Z have an auto loan.

So, how can automotive manufacturers stay ahead of this change? Simply put: they need to prepare the service supply chain today to meet the automotive customer expectations of tomorrow. And one of the most important things auto OEMs can do today is retain customers through exceptional dealer service experiences. Take Lynk & Co for example — the new age company is meeting these new automotive customer expectations with a sustainable mobility experience that boasts simple pricing, flexible ownership, car sharing, free connectivity, home delivery and of course, subscription as a new way of ownership. And, as customer expectations continue to evolve and subscription services become more commonplace, the service organization will become more important than ever.

Not only will service expectations change as vehicle subscriptions increase in prominence, but also the whole relationship a customer has with an automotive brand. When it becomes possible to access a car from one brand today and another tomorrow, brand loyalty will become an even more hypercritical area for OEMs and their dealers to master. Until that tipping point, though, dealer service experiences are the most important customer touch point to get right.

Today, more than half of survey respondents lacked loyalty to particular brands when making vehicle purchasing decisions. What they did feel loyal to, though, was a positive customer experience. According to our recent research, more than 90% of vehicle owners describe their most recent dealer service experience positively. On the flip side, 36% of respondents said that a negative dealer service experience would impact their perception of an automotive brand, meaning that they would have no problem jumping ship if it meant there was a better service experience around the corner with another automotive brand.



But, dealers, rejoice! 38% of respondents indicated that they have had little to no major issues with their dealer service experiences. The main areas of improvement were simply price and wait time, which respondents indicated would be the likely cause of them looking elsewhere for their auto service needs. In fact, 78% indicated that they are likely to use their dealer service center for a future repair despite these two critiques.

What about that other 22%, though? What could sway those folks to stay with the dealer? When asked, 72% agreed that if a dealer had the exclusive ability to send a notification that a specific vehicle part was about to fail and could preemptively schedule the repair, they would be encouraged to use the dealer for service moving forward.

While this sort of proactive maintenance won’t happen overnight, OEMs need to start investing in the right technology and human capital to make this vision a reality. Now – more than ever – consumers are used to goods and services appearing at the click of a button. “It’s 2019—people just want to buy things online,” says Tesla CEO Elon Musk – and he’s not wrong. When someone can make a purchase online and the package arrives at their doorstep a day – or even hours – later, it makes sense that this completely new way of doing business would seep into every industry – especially automotive.

All of this comes down to one main thing: it’s time for OEMs to redefine the way they do business to meet these increasing expectations. In this case, that revolution is coming in the shape of innovative business models like the subscription economy and technological advancements. And building a steady customer stream through faster, easier, tech-enabled purchase and service experiences will be more important than ever as the movement toward the subscription economy shifts into high gear.

Download our new research report to learn more about how automotive customer expectations and their rising interest in the subscription economy is revolutionizing the automotive dealer service experience.