Managing long distance relationships in automotive sales

As COVID-19 enforces social distancing between sales teams and their potential customers, manufacturers have accelerated the introduction of digital and remote selling models. 

But studies reveal that many customers who are buying cars continue to want one-to-one interactions with real people. 

For OEMs and dealerships, it’s more important than ever to win customer trust. Consumers want convenience and are comfortable with the online services they experience within other retail environments. But the automotive industry is far less known for its personalized, end-to-end digital experiences. So how do automotive businesses introduce new services to cautious consumers without losing the benefits of human interaction? 

In our latest podcast, Philip Junge, Head of Customer Engagement, MSX, is joined by Stefanie Senger, Executive Director at Autohaus-Gruppe Senger , one of the largest dealerships in Germany, and Fredrik Johnsson, Chief Strategy Office at Whisbi, global provider of a mobile conversational sales and marketing platform . They discuss the ways in which businesses can make better choices about the technologies they choose, the way they implement them and how they engage employees in digital processes to help win customer trust and encourage sales.

 “Take your employees with you on the journey. If they don't see any use in the new offerings and processes, they won't hold onto it and it's probably no good anyway.”
Stefanie Senger, Executive Director at Autohaus-Gruppe Senger

Transcript

Podcast CE mix

[00:00:00] Philip Junge: [00:00:00] Welcome to another MSX podcast episode. 

[00:00:12] Today, we want to talk about long distance relationships in automotive car sales. This metaphor is quite fitting as COVID has put distance between sales teams and dealerships and their potential customers. With this in mind, I want to introduce today's guests.

[00:00:26] First of all, a warm welcome to Stefanie Senger. Together with her brother, Stefanie is managing the family business, one of the largest car dealership groups in Germany. Since 68 years, the company constantly adapted to their customer's needs.  Stefanie is now intensively working on creating a true customer centric omni-channel experience for their customers, thereby she's not only investing in and testing new, online offerings, but especially focuses on how these offerings are integrated in the daily business processes.

[00:00:56] Before joining the family business, Stefanie worked for a consultancy [00:01:00] helping companies in their digital transformation. Welcome Stefanie.

[00:01:04] Stefanie Senger: [00:01:04] Thank you

[00:01:05]Philip Junge: [00:01:05] I also want to welcome Fredrik Johnsson. Fredrik is Chief Strategy Office at Whisbi, responsible for the strategic vision and management of the Whisbi ecosystem. He's an American educated Swede with a couple of degrees from MIT, based in Barcelona since more than 20 years ago, with extensive experience in technology development, business strategy and management of professional service. Welcome Frederik.

[00:01:28]Frederik Johnson: [00:01:28] Thank you very much. It's a pleasure to be here. 

[00:01:30] Philip Junge: [00:01:30] Thanks. Last but not least a quick intro of myself.

[00:01:33] My name is Philip Junge and I'm heading the Customer Engagement product pillar at MSX International. In this role I am MSX's leading expert on customer engagement processes and technologies. Before joining MSX, I was founder and managing director of Veact, a technology company which aims at automating marketing and customer engagement processes in both sales and aftersales.

[00:01:54] Let's kick this off. We see that COVID has accelerated trends as towards digitalization and remote [00:02:00] selling.  A recent study from Deloitte shows that this trend will remain even after the pandemic has passed. But the study also says that customers still want to be in touch with real persons at dealers. On the other hand, other studies say that only 2% of German customers considered dealer sales persons as trustworthy. Stefanie, how do you see this conflict? Are customers in Germany asking for remote services? 

[00:02:25] Stefanie Senger: [00:02:25] I think  the process of buying and maintaining a car is still not transparent enough for the customer and full of insecurities. It underlines how important it is for us dealers to win and build this trust with the customer. And secondly, I think customers are asking for convenience and for a lot of people that means remote services like online bookings or video chats with our sales persons , all solutions they know in other industries [00:03:00] already.

[00:03:01] And what we also experience is that in the beginning, we need to proactively push customers to use these remote services. Even if we are promoting them a lot, customers first hesitate on using them because they are just not used to it in our industry and from us. For example, taking our live video chat at the moment, very few customers proactively ask for this service, most of the time our sales persons have to offer it to the customer. But once they experienced it, they are very satisfied. I think it's now up to us to use this and push the customer more to those remote services. 

[00:03:51] Philip Junge: [00:03:51] So you're saying you have implemented it on the home page. But customers still choose another channel for contact, so they would rather use the telephone instead of a chat [00:04:00] or video chat. Is that what you're saying? 

[00:04:01] Stefanie Senger: [00:04:01] Yeah. The first contact  it's mostly over the telephone or via email. And then our sales persons, they offer the live video chat and then they use it and they really like it.

[00:04:17]Philip Junge: [00:04:17] It's interesting because we see this, especially in Germany, with other technologies as well. So if you take online booking for example, and maybe you agree that even if you offer it on the website, people would still in many cases pick up the telephone. Is that something you see as well Stefanie?

[00:04:33]Stefanie Senger: [00:04:33] Yeah, it is. And I think it's two things to this. The first of all, yeah, I think probably we Germans aren't the most open to new digital solutions, like other countries like the Chinese or the US, but , secondly, the other thing that we, like, the solutions we are offering often arent that convenient as they should be for the [00:05:00] customers. So especially if I'm talking about online service bookings they can be very complex and that is our job to really improve the customer journey and the online customer experience.

[00:05:16] Philip Junge: [00:05:16] Do you see any difference in customer expectations or the usage of this software depending on segment? Because your dealership group obviously sells many different segments from luxury to middle-class cars. Any differences there?

[00:05:30] Stefanie Senger: [00:05:30] No, not especially in the segment, but more depending on the different customer groups like B2B or B2C customers, or if the customer wants to buy or lease a car. But the questions are always, why does the customer want a car? Is he, or she, a car enthusiast? Does he need a quick and cheap solution to move this family around? Or is it probably a company who wants a standard car for their [00:06:00] sales persons? And how firm is the customer about buying a car? Is he, or she, very insecure about the whole process? And of course, how digital a customer is. Those are the factors which determine if a customer is more open about remote and online services. 

[00:06:23] Philip Junge: [00:06:23] But you would still offer every customer on the website the same technologies. And that brings me right into the, to the next question, maybe you can answer that as well. How many of these.. there's tons of technologies out there, how do you manage these new requirements? Could you explain it, and some of the new processes that you have introduced?

[00:06:41]Stefanie Senger: [00:06:41] There are a lot of things we are testing at the moment, but yeah, let me first point out that in my opinion, really important things to consider while introducing new processes - first of all, you really think that.. need to think the process [00:07:00] through from the beginning to end. Everyone can build a nice interface to the customer, but it just works if the process behind it also has a high usability and quality. That's really important because if not, the whole customer experience is not working, I think.

[00:07:21]Second of all don't die in beauty, but focus on what's really important for your customer. There are so many fancy digital solutions from AI to VR, etc, etc. But we need to be careful to not overextend our customers and first build this trust and the online and remote offerings. 

[00:07:47] And third of all take your employees with you on the journey. If they don't see any use in the new offerings and processes, they won't hold onto it and it's [00:08:00] probably no good anyway. So that's very important as well. And having said that we are offering a lot of new ways to expand our remote offering to our customer. Starting with digital product shows and video content with our own employees to create a personal relation to the customer and add valuable information for them. Introducing personalized social media channels for our product experts and sales persons, so they can prolong their customer relationship over Instagram or Facebook. And then, if a customer is interested in a car, we have the live video chat offering, which enables our sales team, not to only share their screen and switch the call seamlessly to their mobile phone, but also to upload documents and check stations for the customer.

[00:08:54]And then if the first service is due we develop the solution to arrange a service [00:09:00] appointed within three clicks and the possibility to video call your service advisor to also see and understand what's happening to your car. So as you see, we are testing a lot of things to really create a seamless omni-channel experience for the customer over the whole customer journey. And while doing that, it is always really important for us to track and measure everything we are doing to see if we're meeting the customer demands and needs.

[00:09:28] Philip Junge: [00:09:28] I just wanted to ask about that. So how do you track and measure and how do you define for yourself which of the processes you've tried out is working and is accepted by customers, and which is not. Did you ever introduce a new digital process where you then decided after sometime that was not a success, we will get rid of it again?

[00:09:49]Stefanie Senger: [00:09:49] Yeah. Cause everything which is online or digital, it's very easy to track, you see how many customers are using it and in the [00:10:00] end it always counts if then the customer buys a car, or if they do their service at our dealership. So the conversion rate is always the point of truth if the solution really works or not. 

[00:10:14]Philip Junge: [00:10:14] But would you also, quick question, would you also compare to the customer satisfaction?

[00:10:19] Stefanie Senger: [00:10:19] Yes, of course. Isnt it a sign of high customer satisfaction if the customer is buying in the end? 

[00:10:27]Philip Junge: [00:10:27] That's a philosophical question I would say. No, I would say not necessarily. Many customers would buy a car maybe because of the price and then go through another dealer for servicing because they were not happy with the process. So yes, you're right a little bit, I think, yes. But, I wouldn't say it's 100% true that every customer who buys a new car at your dealership or services the car at the dealership is necessarily also happy. 

[00:10:50] Stefanie Senger: [00:10:50] Yeah, no, that's true. But yeah, of course, we also see, for example, we have a lot of customers as well who are, yeah, not buying it [00:11:00] at our dealership, but coming to our dealership for service, and also we really have a close look to our ratings, our online ratings, especially our Google rating, how does that evolve, and which also shows us if ,which also shows us if we are doing a good customer service. 

[00:11:24] Philip Junge: [00:11:24] Okay, thank you very much. Thanks for the insight, Stefanie. Now let's hear from Fredrik . Fredrik, your company delivers solutions to engage with leads and customers via video to dealers and OEMs worldwide. Do you see differences in customer's expectations or requirements around the globe? How do you see Stefanie's experience compared to yours? Especially for example when she mentioned that in Germany, people are rather reluctant to use these kinds of services. Do you experience similar behavior in other markets, or is Germany really special?

[00:11:55]Frederik Johnson: [00:11:55] The differences between markets relate specifically to how [00:12:00] people react to uptake of technology focused solutions. But everywhere, the expectations that people have are being set by leading brands in other industries - the Amazon's, the Uber's, the Netflix of the world are opening the path for interacting with brands in different ways, and setting expectations that people expect the brand to respond in the moment that they reach out to them. And the offline analogy would be that if you were to walk into a shop and there's a shopkeeper there, or a sales attendant, you expect them to respond when you ask them for help not to come back out onto the street after you have left the shop and say "Oh, we saw that you were looking at that such and such a product. Are you interested in that in a video conversation about that product?", you expect the response right away. And these are expectations that are being set by outside of the automotive industry and are coming into the automotive industry.

[00:12:56]But, the development of video driven engagement is being led in other markets, such [00:13:00] as China, the Nordic countries, or in the US, where an ever-growing proportion of online commerce is being driven by video. . It started originally with trending consumer focus shopping - cosmetics, fashion. But what we're seeing now is with the the ability to incorporate a more one-to-one human interaction, it's being pushed into more complex engagement and purchasing processes, such as buying a car where you really, it's not an impulse purchase, but it's something that's much more reasoned. And this creates a tremendous opportunity in the automotive industry to update their online interactions, to be in line with what people have become used to, and now demand, from other brands.

[00:13:36]Philip Junge: [00:13:36] And Fredrik, expectations in the automotive industry would be to basically follow the customer journey wherever the customer goes. So the automotive industry might be a little more, let's say difficult to handle in terms of that specific relationship of OEMs, dealers and customers, so you always have this triangle. And now we heard from Stefanie that they are offering the service on the [00:14:00] dealership side, which is obviously perfect if a dealer starts the journey at the dealership homepage. Many leads or customers, however, will probably also start their journey at the OEM homepage. So we are collaborating MSX and Whisbi to setting up a central showrooms for brands as well. Could you elaborate on that experience? Because you're obviously doing that with other brands quite successfully. Why is it important to be active on both dealer and brand level? 

[00:14:26] Frederik Johnson: [00:14:26] I think it's important to adapt the engagement to the customer's overall journey and to help them move down the funnel. As you said, when a customer is interested in a car, they start at the top of the funnel, as we would describe it. They would be discovering the brand and beginning their engagement. And in most cases this happens on the OEM, on the brand site. And what we do is we enable the brands to hosts one-to-many broadcast sessions on the site, and these can also be mirrored onto dealer sites. But this is where you begin the the first part of the interaction with the brand. And it also [00:15:00] enables the OEM to bring their website from a catalog to a place where consumers can have a , meaningful interaction with them.

[00:15:05] And it takes the interaction away from any kind of social networks and into their own brand controlled environment. And in these broadcast sessions we engage the customers, capture the leads which can then be qualified in a number of different ways using chat bots or AI technology, and then route the leads to the appropriate dealer or to a centralized showroom for a one-to-one conversation between the interested consumer and a sales agent. This conversation, cause it's both voice and live video enabling a remote interaction, that captures most of what would happen in a face-to-face meeting at the dealership, showing the car, configuring options, sharing content, even placing an order as Stefanie described before.   

[00:15:45] Philip Junge: [00:15:45] You have all the experience. What's to gain using video in automotive car sales? Could you share some facts and figures about installations that you have on brand and or dealer level?

[00:15:55] Frederik Johnson: [00:15:55] Yeah, this live video creates this rich interaction at the [00:16:00] moment when the consumer wants it. So you went into the website, be the OEM or the dealer, and you can initiate the interaction immediately. And this allows you to create the same demo experience that would otherwise happen at the dealership remotely, show me how big the trunk is, what does the backseat look like? The only thing that you don't get in this experience is the new car smell - you don't get the smell of the leather, unfortunately. But this human and interaction, because you're talking to a person and it's interactive, it creates this transparent trustful exchange, breaking the barriers of digital. And that, again, that's something that Stefanie mentioned before, the importance of trust in this kind of purchase is extremely high. And just to give you a couple of examples, we are running live streams on the OEM website with Hyundai in Mexico, and here we're capturing leads and they're routed directly to local dealers afterwards. This is a classical implementation for us. And to give you an idea of some results, having this live video broadcast and direction on the website [00:17:00] has multiplied the number of leads generated by five. It's five times as many leads in 2020 as they were in 2019. And that's 11,000 clients have asked questions, so specifically asking a content type question about the car. That has led to 8,500 leads, which is three times more than the year before. And this creates a doubling of the number of requests for a private session in/from the live broadcast. So we have twice as many people requesting a one-to-one session after seeing a live broadcast. And it has led directly to selling 115 cars, which is almost five times as many as the year before in terms of online transactions. And another example that, that we have, which I think is really pertinent now that so many countries are in lockdown, is that we ran a product with Skoda in the UK, where they were able to continue showing cars despite all of the dealerships being closed and sales personnel being confined to [00:18:00] their homes, using our one-to-one platform from their homes, their driveways, their garages they were able to continue to do one-to-one demonstrations of cars. And that led to a 95% customer satisfaction with the experience, it increased the number of test drive requests by 48%, after having done more than 2000 live tours, it led to 20% of those tours led to real car sales. So it was we think it was really a, quite successful project to keep selling cars even though all dealerships are closed and personnel and the customers are confined to their homes.

[00:18:35]Philip Junge: [00:18:35] Your company delivers this video solution, which is obviously an essential piece of the journey, but it is still a part of a broader construct. In your experience, and Stefanie mentioned it already, it's all about the integration into the overall processes. How well do OEMs globally service customer expectations with regards to a seamless remote journey.

[00:18:55] Frederik Johnson: [00:18:55] There's still lots of room for improvement and we can look at cases one [00:19:00] by one to look at the nuances of that. But really, at the OEM level, in terms of the online interaction that takes place on their website, into something that is useful and fun, there, there is improvement to be made. And then, after the OEM engages, then dealers need to step up and attend to the customers that get passed to them by the OEMs in a timely manner and with a rich interaction. And these are the things that, Stefanie and her dealer group are working on, but that's, that is not always the case.

[00:19:28]Philip Junge: [00:19:28] That is absolutely true. 

[00:19:29] Stefanie, after hearing from Fredrik, do you think that the use of the video needs to be extended in your dealership group? What are the next steps that you will take to make long distance relationships in sales possible and more seamless?

[00:19:40] Stefanie Senger: [00:19:40] Let me first say something to what Fredrik just said, because I think one of the big challenge here is that there are so many layers - there are the OEMs, there are platforms, there are dealers and there are those different customer types. For us dealers, the big challenge is to [00:20:00] really create a seamless and easy customer journey with the high ability, no matter where the customer is coming from. And that is a big technological challenge. And also to have the processes. I totally agree with what Fredrik just said. We are constantly working on integrating more video content and offerings for our customers. It is the tool for us to reduce the distance online usually created, and it helps us to build a trusted relationship with our customers. Next to the video live chat i've mentioned earlier, we are also using personalized video messages to show customers the car they're interested in and we've seen increase of the conversion rate if we do.  Also, for example, when we were [00:21:00] introducing the new S class, the flagship of Mercedes Benz, we sent a digital postcard to our customers so when they opened the paper-based postcard a video started playing introducing the new S class by one of our product experts, and it's something the customers never expected and which is a very personal content.

[00:21:23] This year, we will create even more video content in sales and after sales to be more transparent to our customers and offer more personalized information and content and build this trust. That's very important for us. And regarding what comes next, I think the next really big step for us must be to enable a real e-commerce process for our customers. So click and buy, finance or lease, click and trade-in  your car, etc, etc. There are also countries and [00:22:00] markets which are a way ahead on this and we need to get there faster, but on the same time we, it's very important that it is not like just the, to digitalize the process we are doing if a customer comes in, but to have our own online customer selling process. But it always needs to interact and there needs to be seamless interfaces with the offline buying process so the customer can just decide where he wants to interact with us and what he wants to do. 

[00:22:42]Philip Junge: [00:22:42] Okay, thank you very much. Looking at other industries, Fredrik, the automotive retail industry is just at the start of digitalization, would you agree? You mentioned that earlier with cosmetics, but how do you think that the sales process will look like in 2025? 

[00:22:56] Frederik Johnson: [00:22:56] Yeah, I can see live video really taking over the [00:23:00] process. The entire interaction that a consumer has with the brand and even with the dealer can be remote, and this then be followed by a test drive at the consumer's home or workplace, and the first trip to the dealer might actually happen when it's with the first service. The entire interaction can take place remotely. And also, I think there will be an increased emphasis on inbound sales, so as a reduction in outbound activity. I think it's much better to let the consumer control when the interaction takes place so that we're live and ready to respond when the consumer engages. 

[00:23:33]Philip Junge: [00:23:33] But even the service for me is a question mark, because obviously in many segments, pickup delivery is already strong and the convenience aspect in my opinion is also taking over. Stefanie, how do you see pickup and delivery at your dealerships? Do you offer that? Is that depending on the segment something that people, your customers  welcome. 

[00:23:53]Stefanie Senger: [00:23:53] Sure, we are already offering pickup and delivery services, [00:24:00] especially with B2B customers. It's a common thing to do. So definitely this will probably further be used by other customers as well.  I think the better question is what will not change. So, I can really see the process Fredrik just described as well. But there are so many things changing, the product is changing. Speaking of e-mobility, there are new services around it, subscription models, over the air services. And the customer's understanding of a good service as we just talked about reaches new levels in our industry.

[00:24:39] I think to survive in this challenging world, there are, in my opinion, three things we dealers should do. We need to setup an organization which quickly can adapt and test new things and which are demanded by the customers. Then we need to focus on the right things. [00:25:00] What does the customer really want? What is in our power to change and what brings also the money, which we shouldn't forget about.  Last but not least, we we shouldn't forget our employees and take our employees with us on this journey because as we heard today, no matter how digital we get, they are an important factor to build up the trust to our customers. 

[00:25:30]Philip Junge: [00:25:30] Yeah I fully agree. 

[00:25:30] Unfortunately our time is almost up and we need to come to an end. I think we can conclude that long distance relationships in automotive car sales are here to stay, and that the future will bring a lot of innovation in the interaction processes between leads, OEMs and dealers.

[00:25:45] However key to a successful relationship, and Stefanie, as you explained, it's not only technology, but also the quality of the implementation into the business routines, as well as the buy-in of the people who use the technology on a daily basis, which is obviously, in most [00:26:00] cases, the employees of the dealers. Hence I think this is all about change management as well.

[00:26:05] So thank you very much, Stefanie, and thank you very much, Fredrik for taking  the time. It was a pleasure to have you here. To everybody who was listening, goodbye for today. I hope you enjoyed the discussion. Stay healthy, everybody, and stay tuned for upcoming MSX podcasts.

[00:26:20] So goodbye, Stefanie. Goodbye, Fredrik. 

[00:26:22] Frederik Johnson: [00:26:22] Goodbye, 

[00:26:23] Philip Junge: [00:26:23] and 

[00:26:23] Frederik Johnson: [00:26:23] thank you. 

[00:26:24] Stefanie Senger: [00:26:24] Bye, thanks 

[00:26:27] Philip Junge: [00:26:27] for having me.