Driving Conversational Customer Experience across the Automotive Industry
The automotive industry has undergone rapid transformation in recent years, as market forces have forced a radical shift in both manufacturing and digital practices. The increased demand for electric / hybrid vehicles has forced car manufacturers to invest billions into research and development while online disruptors operating in the second-hand market have also seized upon opportunities to connect and communicate with buyers online using new and innovative technology.
One such strategy has been the adoption of Conversational Customer Experience and in this article we´ll explain how the trend is driving greater personalization, increasing revenue opportunities, and helping automotive organizations to expand and scale in new international territories.
Digital Transformations and Automotive Disruptors
The impact of COVID-19 can be clearly seen when analyzing the automotive industry and new car sales with a significant drop being recorded from 2019 to 2020 and 2021. However, as shown below, the 2008 financial crisis caused a bigger drop in sales compared to the pandemic.
So, what has changed? You would expect a significantly bigger drop when you consider that carrying out test drives was impossible during large sections of 2020 and 2021. Clearly, the impact of the pandemic has been mitigated and the answer lies online, as the experience of buying a car digitally has become significantly more enjoyable and simplistic.
“For automotive e-commerce related searches, the end of 2020 had the highest interest level ever across most markets. Search queries for buying a car online are significantly above 2019 levels and have shown great momentum: 26 percent in Germany, 82 percent in the UK, and 39 percent in France.”
Now, drivers can access thousands of cars at the click of a button, book test drives and make a purchase without leaving their home. But this is not behaviour created by the pandemic. Before the onset of COVID-19, car manufacturers and second-hand marketplaces had invested millions in digital transformation in order to attract and sell to buyers online.
Paul Hennessy, CEO of Vroom, said:
“The traditional dealership model or the traditional peer-to-peer sales where a consumer might be selling or buying a car from a stranger is fraught with friction and a process that was just begging to be disrupted.”
As a result, the online marketplace has become a fiercely competitive battleground for international car manufacturers and second-hand sellers alike.
Take for example Carwow, a UK based online platform that sells second-hand cars. The business raised $55m in December 2021 in order to expand its operations and compete for sales on new digital fronts. Throughout Europe and the US, similar online marketplaces are investing vast amounts into their digital properties in order to communicate and connect with users online.
Just imagine how much the French reseller, Autohero, had to invest to appear on the same screen as Neymar…
This is the type of campaign you would usually associate with the likes of Ford, not an online second-hand car seller. And so, the growing competitiveness of the industry is clear to see, which is, in turn, driving greater digital innovation in search of marginal gains.
“The industry is facing an omnichannel retail transformation. We measured all the digital touchpoints during the car-buying journey. There were about 900 individual touchpoints that reach across websites, digital advertising, and CRM systems that touch call centers that touch systems that are built into the physical dealership. All these data points need to be connected. When we take the customer’s perspective into account, the customer just expects it all to work. And when it works, you get their full attention and some money with it.”
Christian Richter, Global Automotive Director, Google
The experience a car buyer has online is now just as important, or even more so, than the experience they have in a physical showroom, creating a demand for businesses to create unique and personal experiences for online buyers. And so, enter Conversational Customer Experience.
Achieving true Personalization Through Conversational Customer Experience
Conversational Customer Experience (CCX) refers to the direct interaction between an online user and a virtual assistant or chatbot and from an automotive perspective, the solution can viewed as the online car salesperson. Only this kind of assistant can communicate with millions of people at the same time and doesn´t have bad breath after lunch.
For car manufacturers, the integration of this technology has proven to be a master stroke and it is likely that the second-hand market will soon catch up.
ŠKODA, for example, built a chatbot called ´Laura´ using the SaaS platform Teneo, achieving up to 400% more test drive bookings as a result.
“You might think of a chatbot as a helper that guides you through a website. It makes it easier for users to get oriented, saves time, and saves costs for companies. But a chatbot can also be seen as a sales tool and a means for collecting leads – potential customers. And that’s exactly how we work with digital assistants at ŠKODA.”
Michal Reichl, Product Owner
The solution implemented by the manufacturer is highly complex and even caters to a variety of dialects, meaning that no buyer will turn away because of a language barrier.
Reichl also said;
“People come to the website at different stages of the buying process. Some wish only to obtain information about our cars, others are already planning a test drive or are about to purchase a car. We have adapted Laura to all our customers’ needs. When they are still deciding about which car is best for them, Laura asks them about their ideas. Based on their answers, she recommends a model that is most appropriate.”
Importantly, solutions such as ´Laura´ can scale rapidly and be adapted to new territories, updated with new technical information and be expanded upon without limit. This level of customization and personalized service ŠKODA can offer to its online buyers cannot be matched by any other technology, and so CCX may be set to become the new battleground of car sales.
Not All Chatbots are Created Equal
In the spirit of consistency, we´ll continue with the automotive theme in order to exemplify the complexities associated with the deployment of successful CCX strategies.
If you want to win the Formula One World Championship, you´re not going to be able to do it driving Fiat Mutipla…
It doesn´t matter how many upgrades you make, it´s never going to drive (or look) like an F1 car.
Chatbots, like cars, come in many shapes and sizes, many of which do not have the capability to be upgraded or adapted like ´Laura´. This is why it´s vital to select the correct CCX creation tool, as choosing the wrong one carries the risk of causing problems further down the road.
According to Gartner, the main challenges in achieving successful Conversational AI implementations revolve around: integrations, ongoing AI model training and language expansion, unrealistic expectations, and solution deployment.
Joel Plazzotta, Director of Strategic Partnerships at Artificial Solutions, said:
“Leveraging the right digital technologies can transform an automotive business. However, auto retailers need to choose technologies that fulfil the personalized, omnichannel, multilingual, analytical, and end-to-end capabilities that customers demand. Conversational AI allows retailers to increase engagement and long-term customer loyalty by providing personalized assistance on multiple touch-points of the customer journey and through any channel.”
If you would like to understand how to develop and deploy a CCX strategy, connect with Joel Plazzotta here for more information.
Or get access to a free 90-day trial of Teneo, here.
For more information on CCX and the Automotive industry, enjoy our related content…
Eight Steps to Deploying Omnichannel Digital Strategies in Automotive Retail