Auto brands keep investing more and more in digital connectivity and infotainmen
ID: 1137128 • Letter: A
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Auto brands keep investing more and more in digital connectivity and infotainment systems in their vehicles, but customer satisfaction rates aren’t keeping pace. In fact, according to J.D. Power, one of the most authoritative voices on the industry, a surprising number of American consumers are either ignoring or turning against many of the newfangled functionalities that are supposed to make them fall in love with their new wheels. And in a related disappointing note, overall US customer satisfaction with autos is down for the third straight year. According to the also-authoritative American Customer Satisfaction Index, in fact, people are more likely to be satisfied with their refrigerators than with their new cars. Power’s surveys have been indicating trouble for some time for auto brands on the digital-tech front. Three years ago, for instance, owner confusion over how to use the new MyFord Touch infotainment system almost single-handedly cratered Ford’s previously strong performance in Power’s annual Initial Quality Survey—and Ford has been struggling to recover ever since. Other auto marques are running into similar challenges. Now Power comes out with its first Driver Interactive Vehicle Experience (DrIVE) report, and it’s sure to be closely watched every year. Its surveys found that at least 20 percent of new vehicle owners have never used 16 of the 33 technology features that may populate their new vehicles, including 43 percent who’ve never used the in-vehicle concierge, 38 percent who’ve never used mobile routers and 32 percent who don’t use built-in apps. The dissatisfied customers include tech-savvy millennials, although they’re more satisfied with vehicles in which they can “plug and play” the devices they carry with them rather than have to adapt to in-vehicle capabilities. Dissatisfied consumers in the survey “wouldn’t consider” such new functions “in their current car, and they don’t want it in their vehicle tomorrow,” Renee Stephens, Power’s vice president of auto quality, told MarketingDaily. Consumer frustration over having to match their personal tech with the car’s is only one source of this poor showing. Despite plenty of lip service to the concept, another issue is that many car brands and their dealers still do an inadequate job of explaining connectivity features to their customers early. Also, auto brands, especially premium marques and their dealers, have been talking a lot about and investing heavily in a wide variety of programs and initiatives meant to boost customer satisfaction as an important element of the vehicle brand experience. Obviously, they’re doing a lot wrong despite the outlays. The industry’s poor showing in the ACSI—down for the third straight year, and now ranking 13th among major categories of goods and services—seems to be largely reflective of the spate of safety recalls over the last couple of years, including GM’s ignition-switch recalls as well as recalls of vehicles containing defective Takata airbags by Toyota, Honda and others. “While it is true that all cars are now much better than they were 10 to 20 years ago, it is alarming that so many of them have quality problems,” said Claes Fornell, ACSI chairman and founder, in the report. “The number of recalls is at an all-time high. This should not happen with modern manufacturing technology and has negative consequences for driver safety, costs and customer satisfaction.” Maybe the industry wouldn’t be moving backward on customer satisfaction if every car were just a Tesla. The latest version of the Tesla Model S, blew the lid off the rating system for another highly respected automotive authority, Consumer Reports. The magazine’s testing arm just gave the new, high-performance P85D version of the S a rating of 100—a perfect score—calling it “the best-performing car that Consumer Reports has ever tested.” And actually, on the magazine’s scorecard, P85D scores well enough to rate at 103, above perfect as it were. “It really blew up our system,” Jake Fisher, the head of automotive testing, told CNBC. “It actually scored above 100 in our system before we had to make some changes to account for this car.” And this glowing review came just two years after the magazine gave the base model version of the S a near-perfect score of 99 out of 100, the highest rating for a vehicle at that time. Makes you wonder how good the upcoming Tesla Model X SUVB could be. “New Car Technologies Often Unused by Drivers, J.D. Power finds” http://www.autonews.com/article/20150825/OEM06/150829939/new-car-technologies-often-unused-by-driversj. d.-power-finds A new study from J.D. Power suggests that automakers are investing billions into technologies that a considerable number of drivers aren’t using. J.D. Power’s first 2015 Driver Interactive Vehicle Experience Report found that at least 20 percent of new-vehicle owners have never used 16 of the 33 technology features measured. According to the study, 43 percent of people said they never use in-vehicle concierge services, while 38 percent haven’t used available mobile routers. The study also found that 35 percent of drivers never use automatic parking systems, and 33 percent said they haven’t used head-up displays. For in-vehicle apps, 32 percent of people reported that they have never used them. Such technological features have a brief 30-day window for gaining acceptance among drivers. If owners don’t use certain features during that time, they probably never will, said Renee Stephens, vice president of U.S. automotive quality at J.D. Power, in an interview. Dealerships play a key role in the early stages of ownership. If a dealer doesn’t explain a feature, the study found that owners have a higher likelihood of never using it. In addition, features that aren’t activated when a vehicle is delivered sometimes results in owners not knowing they have the technology. Stephens said the initial enthusiasm people have upon buying a vehicle is one of the reasons that 30-day window is so important. “People tend to be really excited when they get a new vehicle. They tend to try out a lot of different features, and that’s how they gain acceptance,” Stephens said. “That’s when they’ll learn the most. They’ll go to a tech session by their dealer or they’ll be online. There’s a heightened level of interest in the vehicle.” The report is based on responses from more than 4,200 vehicle owners and lessees after 90 days of ownership. The study took place from April to June. Unwanted tech The study also looked at features that drivers don’t want. J.D. Power says there are 14 features that 20 percent or more of owners could go without in their next vehicles, including Apple CarPlay, Android Auto, in-vehicle concierge services and invehicle voice texting. For Gen Y, those born between 1977 and 1994, at least 20 percent of them said there are 23 features that they don’t want. The unwanted technologies are related to entertainment and connectivity, the report says. Unused technologies, according to J.D Power, result in “millions of dollars in lost value for both consumers and the manufacturers.” Why are consumers rejecting certain features? The study says the most common reasons were that they “did not find it useful,” or it “came as part of a package on my current vehicle and I did not want it.” Tech experts Well-trained dealership staffers who are comfortable with vehicle technologies will continue to be crucial going forward. There’s value in “‘[Apple Inc.’s] Genius Bar’ approach or a tech expert that can help consumers in their own time. Many times as [owners are] picking up the vehicle, they’re just trying to get through the financing part and get out the door,” Stephens said. “We need to offer time for them to come back in their own time to be able to spend time talking to somebody that understands the features.
Q1)Why is technology not creating the expected value in the car industry? (try first to spot all the technology problems that are affecting car makers in the texts)
Q2) Make two specific marketing recommendations for carmakers facing this issue?
Explanation / Answer
Ans 1. The technology is not creating the expected value in the car industry due to following reason:-
a. The Customers are not aware about the in-built technology of car.
b. The Customers are not focusing on the technology, they focus only feature “Plug and Play”.
c. “New Car Technologies Often Unused by Drivers” most of the time.
d. The Car company unable to demonstrate their in-built technology features to the customers.
Ans 2. Two specific marketing recommendations for carmakers facing this issue are:-
1. MARKETING AUTOMATION:-
The Company also decided to take a look at how dealerships use marketing automation. Marketing automation tracks what a website visitor is looking at and engaging with online. Marketing is then automatically personalized for that person.
As an example, if someone looks at a car with following features on your website, they would receive an email with information about the car available with these, they would see ads for the related products, and your sales team would be alerted about the potential customer.
Marketing automation can do wonders for your auto marketing.
2.Focus on the Customer Experience to Drive Loyalty :-
The automotive industry is due for a change when it comes to marketing, with more focus required on customer experience. This would be a transformation within the industry yet essential. Car dealers can be hard-pressed to compete on price but a strong customer experience can differentiate a business, drive referrals and create word of mouth, along with improving retention of customers. The automotive industry has its challenges, and there’s no shortage of dealers borrowing ideas from others. In the end, this can erode effectiveness and make most of the dealerships look the same to the consumer. It’s the customer experience that’s the new battlefield. While some might attempt to emulate what they observe, exemplary customer experience isn’t easy to mimic.
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