Automotive Service Leaders: Accelerating Growth In Aftermarket And Customer Care

William Newman

The automotive aftermarket is expected to reach a segment size of $1.2 trillion globally by the year 2030 (McKinsey, 2016). As such, customer care and service leaders need to prepare for this growth and capture the opportunities that come from higher vehicle retention by owners, larger numbers of vehicles in operation (VIO), and the introduction of highly available and highly utilized connected and autonomous vehicles of many types and models, from heavy trucks to scooters.

The challenges facing customer care and service leaders are many. First, leaders must provision a meaningful and exceptional customer experience. Brands of all kinds exist and do it yourself (DIY) vehicle owners and do it for me (DIFM) service provider have many choices when it comes to recommending repairs and service parts. Often, leaders are faced with suboptimal business processes to conduct operations. From the very small, family-owned “mom and pop jobbers” who run entire businesses on clipboards and spreadsheets, to very large brand dealerships that often toggle between service repair and inventory applications, lack of process automation inhibits increased productivity. Third, DIY parts providers and DIFM service providers are often ill-prepared to take advantage of new business models, products, and services because they live in the “now” of today’s sales and service environment. With few assets to plan for the future, leaders are highly reactive to change around them. And finally, this inertia breeds a certain lack of speed and agility. It is very difficult to adapt to the changing needs of the customer even though this market shift is paramount.

Customers are always considered to be buyers, regardless of their position on the continuum of the customer care journey. The move between consideration and buying has blended through ownership cycles with many different use and service models. Add to this the impact that customers have to influence via social sentiment and word of mouth, and it is clear leaders have a responsibility to manage a customer lifetime value (CLV) throughout a brand, often representing hundreds of thousands of dollars.

The good news for leaders is that customer care and service organizations can be the catalyst for driving future growth. The sales arm has seen and will continue to see an uptick in the use of leads from digital sources, whereby most sales leads will come from online and digital sources within the next two years. Services margins will continue to rise through the use of advanced diagnostics, preventative maintenance, greater customer intimacy, and inventory visibility. And while total revenue will continue to climb as vehicles require greater frequency of repair due to greater utilization and part value, rises in customer satisfaction (CSAT) scores have the ability to drive down the average cost of services. In the future, margin will drive key gains for leaders in the customer care and service space.

For service leaders, a focus on experience data and management allows them to move to a cycle of continues delivery and improvement, relying on greater agility and data visibility – into both the vehicle and how it is used as well as the personal habits of the driver and consumer. Service leaders must continue to experiment and move beyond their comfort zones to take advantage of the opportunities the future holds in the area of customer care.

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About William Newman

William Newman serves as NA Chief Automotive Strategist at SAP, providing industry perspective and strategic advisory on new and improved business capabilities and innovation. He serves as the ASUG Point of Contact for the NA Automotive SIG. When not writing for D!gitalist, Medium or LinkedIn Editor’s Choice blogs, Mr. Newman enjoys distance running, travel and learning about some of the world’s best wine regions. An accidental orange farmer and vintner, you can follow him on Twitter and Instagram at @William_Newman.