Automotive
6 Key Strategies to Help Automotive Companies Stay Ahead
From the importance of clean data to the critical role of after-sales services to embracing B2B2C, examine six key strategies that automotive experts suggest to stay ahead in the face of digital transformation and a lingering uncertainty that continues to impact the industry.
As the world becomes increasingly digital, the automotive industry continues to face unprecedented uncertainty. But one thing we know for sure is that automotive customers expect seamless, frictionless buying experiences that span physical and digital, pressing automotive companies across the board to reevaluate their existing business models.
During a recent webinar, “Driving Tomorrow: Navigating the Digital Landscape of Automotive Commerce,” we gathered four automotive experts to discuss critical strategies, innovative approaches, and effective examples that can help automotive companies stay ahead.
In this blog, we distill their key takeaways to help guide companies through the ever-evolving landscape of automotive commerce.
1. The Importance of Clean Data in AI-Driven Processes
Clean, consolidated, and high-quality data is the cornerstone of effective digital transformation. Without this, even the most advanced AI tools will fail to deliver meaningful results. For this reason, automotive companies must prioritize data hygiene to ensure that their AI and machine learning applications are fed with reliable information. This is important because AI applications in automotive commerce—such as predictive maintenance, personalized marketing, and inventory management—can revolutionize operations and create customer experiences that drive both sales and customer satisfaction.
You could have the best machine learning or AI intelligence at your fingertips, but if you have bad data flowing in—if it's not clean, consented, consolidated, etcetera—then what you get out will be worthless. You can't just expect to buy an AI tool and have it change your business.
2. Start Small to Scale Faster
Large-scale digital transformation projects are inherently overwhelming. That’s why our experts suggest approaching them like an “elephant carpaccio,” otherwise known as breaking down big IT projects into manageable parts. These kinds of pilot projects enable organizations to test and refine their strategies before launching into a full-scale implementation. Narrowing down the project scope is especially important for transactional business models.
My biggest recommendation is to be bold. Go live with sixty or seventy percent. Don't over-engineer it. Rather, go live with your customer, get feedback, validate your assumptions, and then be bold when you need to pivot or shift. Companies that I've worked with who were bold enough to go out with a real MVP and bold enough to make decisions to pivot within that strategy, based on the customer feedback, had the most success.
3. The Critical Role of After-Sales Services
As the automotive industry undergoes major changes, more companies are examining the end-to-end journey and discovering untapped revenue potential in after-sales services. According to our experts, for many OEMs, 50% of the profit contribution comes from after-sales, such as maintenance, parts, or even accessories.
It may take a customer 30, 60, 90, or 120 days to buy a vehicle. But then they're going to keep coming back to the dealership or manufacturer. The average age of a vehicle in the United States is over eleven years right now. And while it's probably not the same person owning it the whole time, that's such a great opportunity.
By offering comprehensive and convenient after-sales services, automotive companies also build stronger, long-term relationships with their customers. This holistic approach ensures that customers remain engaged with the brand long after the initial vehicle purchase.
Learn more about enhancing your after-sales services within your commerce solution here.
4. Embracing B2B2C Models
To enhance the end-to-end customer journey, our experts encourage automotive companies to embrace the B2B2C model, which integrates dealer networks and OEMs. This approach allows OEMs to maintain strong relationships with dealers while directly engaging with consumers. By connecting all three parties—dealers, OEMs, and customers—through a unified platform, companies can improve customer experiences and operational efficiencies.
Don't leave the dealer out of the equation. This is essential to delivering really high-quality digital services.
5. Leveraging Digital Marketplaces
Digital marketplaces serve as a hub between the company, customers, partners, and suppliers, going beyond traditional offerings with a full end-to-end service. According to real-life examples from our experts, this approach facilitates better product and service offerings, dynamic pricing, and personalized customer experiences, driving significant top-line and bottom-line growth.
One example of a European automotive aftermarket player from Florian Weckesser, Expert Managing Consultant at diva-e, perfectly encapsulates the B2B2C and the marketplace setup.
Their number of customers increased by about 25% in the first six months. The top line rose by over 10% from different revenue models in twelve months. Finally, the efficiency and effectiveness of the commercial units increased by about 18% due to the marketplace structure and the overall process and system integration. So, it has huge potential from a bottom-line and top-line perspective.
6. Flexible and Modular Technology Choices
Adopting a composable and modular technology stack allows automotive companies to integrate best-of-breed solutions that support all of their operational requirements. This approach ensures that each component of the technology stack is optimized and updated independently, providing greater flexibility and efficiency to respond to changing industry dynamics.
From my point of view, using one system is not the best approach in the era of technology, where you can facilitate the integration of the best solutions that exist in each area of the journey. So, for example, for digital marketing, CRM, commerce, or whatever you need, there's a specific system that perfectly fits your needs.
Want to learn more from our experts’ insights? Watch the full recording of the webinar.
Then, visit our after-sales solutions page to discover how you can drive your automotive business forward in the digital era.