How the “Holy Triumvirate” of the Automotive Purchase Process can create a more innovative, individualized (not to mention, pleasant) customer purchase process to drive brand growth.
Across the universe of potential car buyers, whether they be defined as new vs. used, luxury vs. economy, A-tier credit vs. not-so-great credit, or all the above, the purchase journey, at least for those who are not cash buyers, is an experience defined and executed largely by the OEM, the finance provider, or the dealer. Yet while these entities employ unique journey solutions to their specific aspect of the overall customer journey to purchase, the unifying goal of growing overall brand loyalty through innovative and individualized solutions should be what unites and motivates all three … right?
However, for anyone that has gone through the car buying process, the reality is often a complicated experience, where the customer is required to navigate three distinct, yet crucial purchase journeys before they get to drive their car home.
So how, in this current atmosphere of record-high interest rates (for leases too), individualized expectations around how to buy and service a vehicle, as well as new and used vehicle inventory fluctuations, can the OEM, finance provider and dealer — this “triumvirate” of the car buying journey — work together for the benefit the buyer and the brand?
“If everything seems under control, you’re just not going fast enough.”
– Mario Andretti
Let’s face it, unless you’re the chair of the Federal Reserve, lowering interest rates is outside your control. But that does not mean OEMs, finance providers and dealers have no options to ease financing burdens for their customers. For example, monthly leasing programs have traditionally offered an avenue to purchase “more car for the money,” so to speak. At the same time, lease customers provide dealers and OEMs a predictable stable of returning customers who terminate leases and look to enter a new vehicle contract which in turn gives the dealer a pipeline of used vehicles while providing the OEM the opportunity to retain a group of highly satisfied customers willing to remain loyal and provide brand growth. On the other hand, customers need to see that their purchase partners are willing to work with them … share some of this interest rate pain and offer lease programs that are compelling, whether it’s a lower money factor or higher residual value — something that makes the monthly payment more palatable. This is especially relevant to returning lease customers who are expecting the brand to provide a seamless journey back to purchase. In a time where a loan payment is not much different than a lease, creative financing is a means of providing viable paths to purchase that will improve the brand experience.
“If I had asked people what they wanted, they would have said faster horses.”
– Henry Ford
Product innovation has long been a hallmark of the automotive industry, and it has certainly reinvented itself countless times to maintain relevance to current and future customers. However, today’s car buyers have come to expect individualized brand experiences, which don’t just include a variety of color choices. Consider the recent advances in online purchase options, at-home vehicle servicing, to say nothing of the oncoming tsunami of EV choices that will create sales, delivery, service and charging challenges for the dealer community. There is no question that historic advances in innovation are happening now, and across the entire automotive ecosystem, whether it be product, finance, sales or service, and today’s car buyers are coming to expect a holistic brand experience. The stakes are certainly high for branded OEM, finance Providers and dealers alike, but one question remains: Which brand will provide the kinds of differentiated innovation that will maintain loyalty, as well as provide brand growth through seamless purchase paths?
“I’ve always been asked, ‘What is my favorite car?’ I’ve always said, ‘The next one.’ ”
– Carroll Shelby
Finding that next car can prove challenging these days. With COVID disrupting chip and parts supplies, OEMs have had fewer vehicles to send to dealers, and fewer vehicles mean higher prices and less than desirable choices for customers. Dealers, with OEM support, need to shift their vehicle sourcing strategy by casting a nation-wide net to meet demand expectations. Coupled with high interest rates, work-from-home protocols, the conveniences of ridesharing services, and the expected arrival of autonomous vehicles, customers are starting to question and delay their purchase decisions. OEMs and dealers certainly need to leverage the emotional experience of a car purchase, whether it be the first car or the next one. But they cannot turn their attention away from the rising tide of innovation, which means they will also need to ensure that a seamless and memorable customer purchase journey is as important as horsepower, crisp handling, and that intoxicating new car smell.
“In the beginning, I looked around and, not finding the automobile of my dreams, decided to build it myself.”
– Ferdinand Porsche
The history of the automobile is replete with examples of one common element: dreamers. From Ford to Porsche to Musk, the true change agents of this industry all started with an inspired vision. However, every dream needs a reality check, and without the foundational ingredients of consistent and compelling market research and analytics strategies, even the most well-intentioned designs would never reach their full potential.
In this current market climate of seemingly daily seismic advances in technology, service and delivery models, changing consumer preferences and brand sentiment, it is clear that any OEM, dealer or finance provider with designs on consistent brand growth, should be looking to research partners that have deep roots in the automotive space, understand the latest advances in the industry and have advanced automotive experiences and expertise that will result in better brand journeys and outcomes for customers.
The Radius Auto team applies custom and innovative solutions — with a unique blend of qualitative, quantitative and advanced analytics approaches — that will drive and secure any brand dream into a grounded reality.