Driving innovations in automotive customer retention with AI

Customer loyalty is a key factor for success in any industry. In the automotive sector customers who are loyal to a brand or a dealer are more likely to buy again, recommend to others, and provide positive feedback. However, customer loyalty is not easy to achieve or maintain, especially in today's market where customers have more choices, more information, and more expectations than ever before.

Customers nowadays are less influenced by traditional factors such as location, performance, heritage and design, and more by factors such as convenience, experience, and personalisation and even the brand’s commitment to environmental sustainability. Loyalty is waning for reasons often rooted in dissatisfaction with service quality, high costs, poor customer service and lack of transparency.

We recently brought automotive industry and IT experts together for a CGI thought leadership event to explore buying trends and the technology strategies that could be used to help retain customers in this challenging market. In this blog we will share some of the tips and best practices that were discussed and expand on how firms can address these issues and establish innovative customer retention strategies within their business.

Consumer market buying trends

Automotive firms need to monitor and adapt to market trends to better retain customers as preferences vary by demographic. For example, the latest annual research conducted by the UK’s largest automotive platform Auto Trader in August 2023¹, revealed that 87% of 17 to 34-year-olds find the concept of buying a car online appealing, compared to only 52% of those 55 and over. What’s more, a separate study showed 42% of 17-24-year-olds want to complete tasks online such as paying a deposit to reserve a car, compared to just 26% of those 65 and over. With around 7 in 10 car buyers claiming to have done, or wanting to complete car buying activity online, the ability to provide an omnichannel experience that seamlessly connects the online journey with the in-person experience is essential to maintain customer engagement.

However, contrary to speculation, Auto Trader’s research found that car ownership remains vital to young people, with the need to own a car for independence and to get around showing no sign of waning. In a study of over 2,000 17–24-year-olds, 90% said that owning a car is important to them, with 70% of which claiming ownership had become more important to them over the course of the last 12 months.

Among the same age group, 63% would consider an EV for their next car, compared to just 37% of those over 45. However, despite this interest, there are only nine new EV models available for under £30K, placing them far out of reach for most young drivers. Automotive and asset finance providers need to expand their product selection to be more affordable to meet this growing demand as well as keeping up with new entrants coming into the market.

Leveraging data to personalise customer targeting

The disconnect between finance providers and their customers often stems from impersonal marketing strategies leading to missed opportunities for engagement and retention.

The solution lies in leveraging data to bridge this gap, creating a more tailored and effective approach to customer interactions. In our session, Qualco, a leading Fintech solutions provider discussed how this can be done:

1. Analytics and data management: By combining vehicle data, customer demographics, financial behaviour, and market trends, automotive providers can create accurate predictive models to forecast customer needs and preferences.
2. Customised campaign execution: Using real-time data to drive tailored marketing, enhancing customer engagement and conversions while adapting to market and preference changes.
3. Customer–centric outcomes: Create offers and incentives using up-to-date market data. These offers are informed by the latest insights, increasing their appeal, and ultimately improving customer satisfaction and loyalty.

Artificial intelligence to improve customer loyalty

Organisations are increasingly using the diverse power of AI to improve customer retention and developments in the new tech are revolutionising the following areas of the automotive business:

1. Customer value: AI can offer more proactive and responsive digital assistance which ensures customers receive immediate support and tailored solutions. Personalised recommendations and product comparisons further enhance the customer experience and loyalty.
2. Innovation: AI solutions can cater to customers in their preferred languages, ensuring a more inclusive and accessible experience. This innovation not only meets customer needs but also anticipates future demands.
3. Business growth: Improved forecasting and prediction capabilities, including generative actions, enable companies to stay ahead of market trends and make informed strategic decisions.
4. Efficiency: From data ingestion and triage to categorisation and labelling, AI streamlines workflows and reduces manual efforts. This significantly increases operational efficiency and allows the firm to focus on strategic initiatives.
5. Sustainability: Automated digital audits help automotive providers monitor and improve their sustainability practices. AI can provide other creative solutions to the various environmental challenges and reporting requirements.

Conclusion

Customer attrition in the automotive service industry is increasing and it is vital for service providers to implement innovative customer retention strategies and align their practices with evolving market trends. By using advanced analytics and real-time data, along with AI to help with the heavy lifting, the automotive industry can offer personalised marketing, tailored offers, and proactive customer support, thereby enhancing engagement and increasing loyalty.

Here at CGI, we keep the customer front of mind when designing digital experiences. If you would like to discuss how your business can incorporate AI and data analytics to enhance the customer experience, please get in touch.

Sources

1 - Visit Auto Trader Insights for the latest car buying research