Nowhere to hide …

‍At the Automotive News Europe Congress last month, Erik Severinson, the Chief Commercial Officer of Volvo Cars, suggested that western OEMs should look at how Chinese automakers are selling cars online and interacting with customers.  Although ICDP did have a research programme in China for a while ten years ago, I’m happy to take on board the comments made to me by a Chinese friend that if you’ve not been to China in the last six months, you’re out of date, so it seemed appropriate to check out what Severinson was saying.

‍Some things had not changed – the OEMs dictate the DMS system used by their dealer networks, giving them great visibility, but making it tough for multi-brand dealer groups to get an overall view of their business.  Despite what Severinson said, most deals are finalised in dealerships so the journey remains an omni-channel one, with the final stages concluded face to face.  Whilst some OEMs, particularly those who have their roots in the tech world have tried direct sales and agency, franchise in some form, including hybrid or ‘non-genuine’ agency remains the most common channel format, although some would not meet European regulatory standards.

‍Most interaction between dealers and customers still takes place using WeChat and it’s business equivalent, WeCom, but over the last decade this has become much more formalised and the WeCom channels are often owned by the OEMs, with their use mandate by the OEM.  This is an extension in functional terms of the OEM mandated use by dealers of specific lead management platforms that we are familiar with in Europe.  Entire WeChat conversations are on the platform and as this is the communication tool of choice for consumers, it effectively means that anything that has been included in a WeChat exchange is in the OEM-managed database, and added to the customer CRM record.  WeChat and WeCom owner Tencent is a major player across finance, banking and payments, music and entertainment, gaming and e-sports, as well as social media channels, allowing (under Chinese GDPR rules) the data from a car buying journey to be combined with insights from other sources to profile customers.  Conversations can also be analysed and scored for every sales executive, looking at their skills, but also compliance with manufacturer, dealer and regulatory standards.

‍As I mentioned, most customer buying journeys in China still conclude in a dealership, and here we definitely enter the world of ‘Big Brother’.  A growing number of OEMs and dealer groups are introducing smart name badges like the one shown in the image accompanying this blog.  These badges include a recording device which will capture the whole conversation between the sales executive and the customer.  This is then subject to the same analytical process as the text exchanges to allow the performance of the executive to be assessed, ensure that defined processes are being followed, product features correctly described and that there is a deterrent to any practices that are illegal or not in the commercial interests of the dealer.

‍There is no question based on my own experience at Auto West London of the value of having a full record of an exchange with a customer.  We already have this for telephone calls, including AI-driven analytics, and make regular use of it.  In the event of customer complaints, there is no ‘he said, she said’ argument because we can produce the full transcript and real-time recording.  If we feel that a sales executive is not working as effectively as they might, we can turn to the call analytics part of the dashboard and demonstrate where there is improvement potential using real examples.  We do not file and analyse every email and text message exchange against a customer record, though clearly they are available if needed in an unstructured form.  We certainly do not bug every sales desk.  I can see however in a people business that if you only focus on outcomes – sales vs target, conversion rates and the like – you are missing the most important information, which is what was good or bad about the process that led to those outcomes.

‍Manufacturers and dealers tend to focus on standardised ‘ideal’ sales processes as the way to improve outcomes, but firstly it assumes that the author of the process actually understood car sales (which is not a given) and secondly that there can be such a thing as an ‘ideal’ process when all customers are different, and most will resent being forced through a process that does not meet their needs or concerns.  Moreover, the only way to know whether the process is being followed would be to have the monitoring and analytical tools on all the exchanges, including the face to face discussion in the dealership.  And if you do have that monitoring, then you don’t need a rigid process because a good sales executive will be empathetic, ask the right questions, and deliver the information required by the customer to make their purchasing decision, and that will all have been monitored and positively scored by Big Brother.

‍It is ironic, but I feel that we will face a choice, and the arguments for and against are both based on the question of liberty.  Recording and monitoring everything (arguably a breach of personal liberties) gives you a great training and compliance tool to give sales executives the liberty to follow a sales process that truly meets the customer needs.  Conversely, I can tightly constrain the sales process, trying to limit degrees of freedom, so that I don’t need to record and analyse anything, but the customers must all fit into that straightjacket.  Which is best?

‍I don’t have the answer but we surely face interesting times ahead!   

‍A Management Briefing by Dr Andrew Tongue expanding on IT in the Chinese retail environment is available to ICDP members here