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What is influencing the vehicle purchase decision for this generation?

With the current level of technology penetration, the current and upcoming generation of vehicle buyers not only prefer but expect ‘invisible’ after-sales service. A 2018 global Accenture study showed that the younger you are, the more inclined you will be to outsourcing routine services like buying groceries, delivering a package and even physically going to a workshop. What’s more, across age groups, people would be willing to pay more for convenience such as overnight servicing and home pick-up and drop.

For those in the automotive industry, this shift is an important one, especially as technology rapidly upends a decades-old system that has seen little external disruption. As Tom Goodwin notes in his 2018 book Digital Darwinism, “Will car companies understand that… the holistic ownership experience – how you buy the car, get it serviced, renew the lease – may be more important than just the car itself?”

This should not come as a surprise. Apart from the younger generation’s preference for all things digital and convenient, there are some other reasons driving this trend.

  • Traffic: The demand for owning personal transport is ever-increasing and the pandemic has further fuelled this demand. Public transport in major cities is unable to sustain new migrating student and working populations and has seen a drop in preference in the time of social distancing. The thought of crowded roads can act as a deterrent for non-work, non-pleasure travel, such as going to a service centre.
  • Time constraints: As our lives get busier, time is precious. The hours saved ferrying to and from service centres can be spent with families, hobbies or relaxing. Further, digital service booking and communication via QR codes and apps can cut down on back-and-forth. Services such as those offered by 21North also records specifications, cutting down the possibility of human-led miscommunication.
  • 21st-century payment: At a time when neighbourhood stores accept payment via QR codes and digital wallets, why should sophisticated service centres rely on cash or in-person payment? Modern tools can provide easy invoicing, approval and seamless payment settlement. From this, one is unlikely to want to go back to an archaic mode of payment!
  • Digitised records: Gone are the days where one is expected to keep physical records that might be inconsistent across service centres and requirements. An additional advantage is the consolidation of records of payments and servicing which can easily be drawn up from the cloud. This is not just easier to access, but helps future services, much like digitised medical records.
  • Transparency: Just like how we have visibility as to where our food delivery or cab is when using respective apps, there’s no reason why we should not know where our precious vehicle sent for servicing is. Services such as 21North allows owners (and service centres) to track the vehicle throughout the journey. Cloud calling, geofencing and OTP authentication adds a further level of transparency.

Service as a differentiator

As other industries have taught us, what might seem novel and a good-to-have at first will become standard expectation in a few years. The time to act, we believe, is now. In 2018, India’s largest business daily reported that after-sales service for automobiles was a “powerful tool to retain customers for life”. In the same year, Accenture concluded that “aftersales is an area that’s ripe for an overhaul through a new, more sophisticated level of service. And those who get on the invisibility bandwagon stand to pull ahead of competitors.”

What’s more, it makes for good business as well – this helps build customer loyalty, and allows for workshops to be placed in less-expensive areas, increasing servicing capability.

Digital-led aftersales: Now a necessity for all players in the automobile chain

As customer experiences become more integrated and expectations rise, it’s important for automobile companies to ensure consistent after-sales quality throughout the chain.

Dealerships are often the first point of contact that a customer will have with a brand. Given that globally, 80% of all customers use online mediums in their automobile purchase journey, it’s important for brands to get their dealerships online – from discovery to purchase to after-sales. Official service centres and workshops will find benefit from digitising as well, such as optimum bay and resource utilisation.

This revolution in service demand and offering is being brought about by digital technology, and it will make everything better for the customer, and manufacturer. By providing a better user interface for customers, by deriving insights out of data, and making the overall process more convenient for everyone, it’s clear that after-sales service is going to see a revolution over the next few years, and it’s already underway. Services such as those offered by 21North allows car manufacturers to easily digitise their processes: handling everything from customer after-sales service, to internal movements.

“We think going digital will have a disproportionate payoff. There might be a small upfront expense and modification in the way of working, but this will pay for itself many times over. We’ve seen this in other industries like consumer electronics. Customers will seek out OEMs that provide superior service. Right now, we believe that’s an easier way to differentiate, than building new models or features.” – Praveen Surendiran, MD, 21North Europ Assistance

 

 

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