TRUST IS SUCH A KEY COMPONENT TO SUCCESSFUL SALES AND RELATIONSHIP BUILDING. ARE DEALERS READY TO BOOST CUSTOMER TRUST?
My column last month was entitled Back to the Future and as we enter a new year, I thought it appropriate to continue that theme. As we step into 2016, I believe that we are on the cusp of some very significant disruptions to the automotive industry that will undermine some of the assumptions about the market and about the industry in general that most within the industry have always trusted and relied upon.
In many cases our trust of something or someone is based on our experience with the person or the thing. I’ve learned to trust that I can walk on four inches of ice and not fall through into the lake. On a more basic level, we all trust that the sun will rise every morning and that spring will — eventually — follow winter. After all, that has been our experience. Most of us probably don’t even think about those things in the context of “trust” but rather take it as a given that “that’s just the way things are.”
A more poignant experiment in trust occurred after the terrorist shootings in Paris last November. Just a few days after the shootings, a young Muslim man blindfolded himself and lay signs on the ground on either side of him. The first sign read “I’m a Muslim but I am told that I am a terrorist,” and the second sign read “I trust you, do you trust me? If yes, hug me.” It is actually a very moving video that you can find on YouTube, but more than that it demonstrates that the man’s trust in his fellow citizens was well placed with dozens of people — some in tears — coming up and giving him a hug amidst the anger, pain and fear in Paris.
As the industry moves to automate more and more of the dynamic driving task leading ultimately to the fully-automated or so-called “driverless” vehicle, an entirely different trust proposition comes to the forefront for consumers.
The automotive industry in Canada has enjoyed some significant success over the past three years with record sales in each of those three years. Is it fair to say that the sales success the industry has enjoyed has been based on consumer trust in their vehicle, their dealer, and ultimately the manufacturer that designed, engineered and built the vehicle? Let’s take a look at each individually.
I think it is fair to say that consumers have a high degree of trust in their vehicles. In fact, I think some in the industry would suggest that consumers have an unrealistically high degree of trust in their vehicle with the expectation that the vehicle will operate infallibly for years in all types of circumstances, whether they properly service and maintain the vehicle or not.
The industry is largely responsible for engendering this kind of thinking because vehicles built today are built to such a high level of quality that even a minor rattle, vibration or clicking will be viewed as being unacceptable. The most recent J.D. Power Initial Quality Study confirms that overall vehicle quality did get better in 2015. However, the study also pointed out that the area where consumers were experiencing the most problems was in the infotainment and connectivity areas where the benchmark for functionality and ease of use is the smart phone.
In my view, this represents a real challenge and potential disruption for the industry, given that the modern vehicle is becoming more connected and more automated, as each new generation of vehicle is rolled out.
The J.D. Power study highlighted the challenge that as the vehicle becomes more electronics-based a consumer’s benchmark for how the human machine interface should work is not another vehicle but rather their iPhone or an app on it. If consumers cannot trust vehicle manufacturers to provide them with the same type of user experience with the electronic technology in the vehicle it may pose some significant issues for the industry — or at least certain brands.
What about the dealer? I think it is fair to say that dealers enjoy a higher degree of trust than they are perhaps used to, which has been brought about to a significant degree by the Internet and the leveling of the transactional playing field with respect to the purchase of a vehicle. The Internet and social media have made it possible for the consumer to find out anything they want about not only the vehicle they would like to purchase but also the dealership(s) that they may be considering purchasing it from.
Additionally, all-inclusive price advertising as mandated by regulation in many jurisdictions has also increased transparency for the benefit of the consumer. This greater transparency has somewhat altered the dynamic with respect to dealership from a price discussion (all of that is known) to a relationship and customer service discussion as in who do I trust to take care of me and my vehicle going forward?
Is it fair to say that the sales success the industry has enjoyed has been based on consumer trust in their vehicle, their dealer, and ultimately the manufacturer that designed, engineered and built the vehicle?
A potential disruptor for dealers — which we have already seen in the market with Tesla to a certain extent — is that if consumers already know the vehicle they want and the price they are going to pay for it from the Internet, then perhaps there is less need for huge showrooms and inventories of vehicles if the dealer’s role becomes more one of the aftersales service and maintenance of the vehicle.
Finally, the vehicle manufacturer — do consumers trust vehicle manufacturers? I think clearly the answer is yes. Every day in Canada, potentially 23 million people get in their vehicles to go to work, the supermarket, the hockey rink etc. with a high degree of trust that the brakes will stop the car, the accelerator will move the car forward, and should the vehicle be in an accident, that they will be very well protected.
However, as the industry moves to automate more and more of the dynamic driving task leading ultimately to the fully-automated or so-called “driverless” vehicle, an entirely different trust proposition comes to the forefront for consumers. Similarly, as the vehicle becomes more connected to everything outside of itself — whether it be other vehicles, the infrastructure, or the cloud, as a focal point for the burgeoning Internet of Things, consumers quite rightly will question whether they can trust the manufacturer.
This is because in addition to trusting the manufacturer to build a safe vehicle the consumer will also need to be able to trust their manufacturer to ensure the vehicle is properly protected from a cyber-security perspective to ensure that not only will the vehicle be secured from being hacked, but also that any personally identifiable information that will be moving between the consumer and the outside world via the connected car will be both secured and not abused. Automakers cannot afford to get this wrong.
May 2016 prove to be a year when the industry takes advantage of the coming disruptions to build up trust. We can afford to do no less.
