Full speed ahead with technology
Automotive original equipment manufacturers (OEMs) face headwinds after many years of record sales across the industry. Advances in connected, autonomous, shared and electric (CASE) vehicles are forcing unprecedented technology and business model transformation. Consumer behavior is fast-evolving and these new behaviors will fuel changes in the market.
OEMs, and their dealers, must respond by being “wholly digital” to better connect with consumers. However, OEMs and dealers also need to support the core business while making investments that support future innovations. Our recent research found that chief marketing officers (CMOs) can play a key role in using digital, other advanced technologies, and data to reinvent the organization’s marketing, sales and service approaches to drive new levels of growth—but many aren’t getting the most they can out of their investments to date.
These challenges existed prior to COVID-19, however, now they are accelerated and there is greater awareness of the urgent need to get closer to customers.
Connect with customers digitally
Marketing and sales in the Automotive industry must continue to change. In addition to the broad-brush brand awareness and dealer-mediated sales, OEMs need to continue to move toward hyper-personalized, digital marketing and omni-channel sales models. To meet consumers’ needs, OEMs should redesign their services around a customer-centric model that is digitally enabled.
A lack of data presents a roadblock to improving consumer-facing services and experiences, such as online sales, immersive reality and artificial intelligence (AI)-based interactions and merchandising to the consumer.
Automotive CMOs plan to invest in strategic marketing categories to support the company's future growth strategy. When asked where they plan to increase investment, the top two responses from CMOs were customer experience (93%) and customer data platforms (90%).
CMOs also recognize the value and importance of investing in technologies to enable these efforts. The top three areas of focus for technology investments are:
These technologies—especially when integrated and used together—can provide a 360-degree view of the consumer to help OEMs anticipate their needs and surpass their expectations.
Select the right ecosystem partners
Three-quarters of automotive survey respondents agree their company has developed the right ecosystem and/or alliance partnerships, but only half indicate their data is well integrated with ecosystem partners. This lack of integration may hinder OEMs from delivering a seamless omnichannel experience, and it could delay innovations such as connected and mobility services.
Orient around business value
OEMs are balancing "keeping the lights on" with prioritizing investments to enable future growth. Customer data and CRM platforms, advanced analytics, and machine learning technologies are key to value realization. These tools enable OEMs to better understand customers’ needs and to align their offerings accordingly.
When we asked how automotive OEMs use data, just over half of these companies noted, “We make use of cloud computing and data lakes to share data effectively.” However, only about half of automotive CMOs say their customer data is integrated into marketing and sales. When data is not integrated, the business is less likely to achieve its goals, as each function is working with a siloed view.
Automotive companies are investing in technology and data integration foremost to improve customer engagement across the broader organization, and they believe there is additional value to be captured from these investments.
Obstacles on the road to growth
Several factors are preventing OEMs from getting the most value they can out of their advanced technologies and platforms—and CMOs feel responsible for the success of these investments. According to our research, barriers to ensuring that platform investments help meet growth objectives include a lack of culture to encourage widespread and in-depth technology adoption and usage (27%), cost of technology (20%) and C-suite buy-in (17%). C-suite alignment is critical, as leaders must work together cohesively to drive the technology agenda forward. Of course, funding the investment in the required technology can also be a roadblock. OEMs can use strategies such as zero-based approaches (ZBx) to unlock funds that can be reinvested into strategic growth initiatives and innovations that will transform the future.
Automotive CMOs we surveyed (20%) also said talent limitations prevented them from ensuring that customer data and insights are easily accessible and shareable across the broader organization. New technologies—such as AI—enable human-machine collaboration that can complement employees’ abilities in new and valuable ways.
How to get started
Automotive CMOs must rethink the evolution of customer expectations as they determine the best strategies and channels to reach customers. OEMs will need to leverage advanced technology platforms to fully exploit available first- and third-party data to support their marketing strategies.
Ecosystem partners, such as technology providers, are essential to bringing the strategy to fruition, and the data to life. OEMs should identify the right partners to provide the platform as well as the right services to connect with customers through differentiated and personalized communications.
OEMs can grow in the market by building capabilities in essential areas:
No matter what the marketing and communications strategy, the technologies to support it must be flexible, easy adaptable and scalable to constantly be ready to "change lanes" and meet future needs. Technology will always be changing, as will customer needs and expectations, so we must evolve in real-time—coming out of the pandemic and far into the future.