Customer experience ‘vital for premium car brands’
By Kyle Lindsay
Friday, January 17, 2014 - 15:00
QUALITY: CAP warning for aspirational brands
Aspiring premium car-makers must understand ownership experience is as important as the quality of the cars they launch, CAP Consulting have insisted.
CAP claim fast and efficient problem-solving for customers far outweighs luxurious dealerships and award-winning commercials in building success, as more manufacturers than ever prepare for premium launches.
The automotive experts argue that the customer experience of owning the car when inevitable problems arise is what sets genuine premium brands apart.
Matthew Freeman, of CAP Consulting, points to Lexus in the United States as an example of achieving premium status from a standing start.
“Lexus became the leading premium brand in the US by making customer satisfaction the central focus of the brand,” he said.
“When it decided to recall the LS only months after launch, all recalled vehicles were dealt with in a mere three weeks and returned to their owners washed, vacuumed and with a full tank of fuel.
“In doing so, Lexus transformed a technical issue into an example of the brand delivering on the key promise: ‘we will not let you down’.
“Customers for emerging brands are always taking a risk and in this example Lexus understood back in 1989 that winning trust was the first priority and that dominating the customer satisfaction charts was key to achieving authentically premium status.”
Mr Freeman added that simply emulating existing premium brands will be insufficient to guarantee success in the sector for new entrants.
“Luxurious dealerships, memorable commercials and clever product placement all have their part to play, but the benefit they can deliver, at best, is only parity with existing brands,” he said.
“And with the premium space getting ever more crowded – thanks to the likes of Volvo, Jaguar, Alfa Romeo, Infiniti and others pitching for prestige status – going ‘above and beyond’ the norm is vital.
“New brands face an even greater challenge.
“The historic experience of Japanese and Korean brands entering the European market shows that customer scepticism can be a challenge to overcome for any car type.
“But those manufacturers managed this by reassuring their customers that the risk of buying into a hitherto unknown quantity was safe to take.
“By offering long-term warranties and gaining a reputation for fast, efficient problem solving they didn’t just acquire new customers, they kept them.”
Mr Freeman claims data supports this approach, with a Bain and Company study revealing a customer is four times more likely to defect to a competitor if the problem is service-related.
Meanwhile, a World Economic Forum survey conducted in the mid-2000s found there was little fundamental trust in product manufacturers.
“For those manufacturers who believe it is enough to engineer and build a superb product they need to understand the ramifications for their target customers,” added Mr Freeman.
“If you want to tempt people out of £50,000, £75,000 or £110,000 BMWs and Audis, the customers have to be confident that this is a decision which won’t come back to bite them financially or in terms of the overall experience of ownership.
“Ultimately, the existing premium brands have set the bar high so that new entrants will have to jump even higher.
“They must convince buyers that they are not taking any chances by switching loyalty. It is not enough to be ‘different’ or ‘idiosyncratic’, as the marketeers will claim.
“Nor can they hide behind the familiar claim that they are exclusive merely because they will not chase high volume sales.
“Essential to success in the premium space is managing the customer journey through the lifecycle of ownership, both for new and used cars.
“Buy an Audi or BMW and you become part of a culture, regardless of whether it’s a £14,000 A1 or a £100,000 7 Series.”