Luxury customer experience in automotive

In this blog series, I’ll be discussing some lessons that the automotive industry can learn from the luxury industry, especially in relation to “hyper-personalization.” In this first article, I’ll show why automakers should be interested in offering luxury experiences, and describe some levers they can pull to do so.

Why should the automotive industry be interested in a luxury strategy?

The high end of the automotive market is attractive to many manufacturers at the moment because, while overseas competitors are increasingly active in the mass market, European companies are in a better position to dominate the top end.

Traditional European players, some of them already perceived as premium brands in customers’ minds, are now adopting a strategy of “premiumization” – i.e. selling by emphasizing the quality of their offers to position themselves in the high-end segment. They see premiumization as a way of diversifying their business and gaining a competitive advantage while widening the gap between themselves and the new digital native players.

In the automotive industry, customer expectations about top-end offers will primarily be defined by their experiences with luxury players in other sectors. It therefore makes sense for OEMs and other mobility players to examine what constitutes luxury experiences in those sectors.

In a luxury approach, personalized automotive experiences are not enough. Based on a strategy of customer segmentation and clienteling (described later in this article), personalization is pushed to the point where it delivers exclusive and unique experiences. In this hyper-personalization, as it’s called, AI, data analytics, and other advanced techniques are combined with human intervention to create an unprecedented level of individualization.

Studying luxury players shines valuable light on customer experience

In the luxury industry, people rather than products are at the center of the strategy, and segmenting customers properly is critical. First of all, the segmentation has to be based on criteria such as projected buyer potential, the customer’s potential influence, the average shopping basket, and so on. At this stage, each part of the marketing mix (Product, Place, Price, Promotion/Communication) is adapted to a specific segment, with nothing left to chance. Thus, the strategy is well-designed to bring valuable and meaningful experiences to every customer.

Understanding the relationship between customer experience in automotive and luxury is crucial, then. To make sure we offer customers what they really want, it’s vital to look beyond product customization and focus on the human aspects of customer experience. For the following discussion, I’d like to invite you to make a real effort to put yourself in the shoes of the customer and think about what they expect from luxury brands.

Proven ways to create a luxury experience

So what insights from luxury industries can be translated to mobility users? Let’s look at a few of the most important luxury codes – those intrinsic elements that make this industry so special in customers’ eyes.

Instant solutions

Customers today – not only in luxury segments – increasingly expect to get what they want anytime and anywhere, in any channel, and at the right price. Gen Z and other younger generations, in particular, are known to be highly connected with a tendency to live in the present.

It follows that automotive companies should offer mobility users real-time solutions. Everything must be available at the moment. With this limited time-focus, not responding fast enough could mean losing the customer.

For the manufacturer, fulfilling this expectation requires digital continuity and advanced data management. Only with reliable availability of real-time data is it possible to respond instantly to the customer’s need or desire, and even to anticipate it before it has been expressed.

Tailored experiences

At the high end of the market, customers are likely to expect exclusivity: differentiation taken to an extreme level. Part of this is about customization of the product so that the customer feels they’re driving a unique vehicle, or one of a very limited number.

However, automotive players have to go far beyond the product itself to build and strengthen relationships with their customers. And this requires customization of the experience of interacting with the brand, as we’ll explain below in connection with the concept of ceremony.

The creation of a feeling of exclusivity is one of the most important levers that mobility players can use to differentiate their products from others at the upper end of the market. Exclusivity shouldn’t be limited to the buying stage – aftersales should also be considered in this context, and integrated into the overall customer experience strategy.

Legacy and storytelling

Legacy is about transmission: passing on know-how or a story from generation to generation. For a luxury brand, archives are crucial as a reminder of successes and failures that explain what the brand is in the present time. A good example here is the Ferrari Museum near Bologna, Italy.

This type of bond to history helps companies to create emotional attachments within their community. The word “community” itself is important, as it describes a relationship between a brand and people that goes beyond the business aspect.

Legacy can also be linked to a brand’s original activity: the brand DNA as it’s often called. A heritage of building racecars, to continue the Ferrari example, could be infused into the present and transmitted to future generations through storytelling that leverages the archive.

Ceremony

We’ve discussed the culture of instantaneous responses, the sense of exclusivity, and the place of legacy and storytelling. Now let’s take a deep dive into a retail experience that is one of the most specific luxury codes: the ceremony.

With hyper-personalization, the product remains the star, but other aspects contribute to the experience. Dealers should think in terms of building a ceremony around the product, where the car is center stage but a lot of other things are going on around it. The ceremony must be linked to the salesperson. All gestures and words are planned in advance. This is a customer moment when brand representatives are actors playing a role where time is stopped: a fully immersive moment where all senses are stimulated. The aim is to surprise the customer.

The concept of ceremony could usefully be applied in the delivery of a new vehicle to the home – a process that is typically poor at the moment but could be infused with luxury insights. After delivery, the OEM or dealership could maintain communication with the customer, offering help with using the car or scheduling maintenance. This would help maintain the bond between customer and brand, provided it is done in a way that emphasizes communication and support, not selling more products.

The human touch

In this type of ceremony, it’s essential that digital enablers of the experience are disguised or kept in the background – they mustn’t be the stars of the show. Some of the most prestigious luxury brands are known for keeping paper notes with personal details of customers – their families, their birthdays, and so on, subject to individual agreement. These details form part of the company’s archives, mentioned above; it’s all part of the legacy concept and one that helps keep the relationship interesting and personal.

This is something that automotive firms will want to consider, particularly for niche brands, though it’s unclear at this stage how far it can be replicated. What is clear is that well-timed, personalized communication is vital, and has to happen through the customer’s preferred channels. In other words, the brand needs to understand the best way(s) to contact each individual and do so in a way that feels to the customer like a unique experience. It is the brand that needs to adapt to the customers, not the opposite. Behind the scenes, this will necessitate the collection and use of a mix of demographic and behavioral data from multiple touchpoints.

Clienteling: relationships before selling

When we think about customer journeys and the customer lifecycle, inevitably we start to think about loyalty. But this term is associated with the mass market, with connotations of spam and other unwelcome approaches in consumers’ minds.

In the luxury sphere, taking care of customers is critical and goes far beyond loyalty programs designed to satisfy business goals. Luxury players devote a lot of energy to thinking about relationships, as opposed to selling products.

The concept of clienteling is at the center of luxury strategy; it provides a foundation for tailoring unique experiences and addressing each customer as an individual. In the automotive industry, this idea should be applied at every touchpoint a customer has with a brand: for example, when the customer enters a car dealership for a test drive, calls the customer service center to schedule maintenance, or needs help choosing the best mobility solutions based on their history and preferences.

The customer doesn’t want to feel that a mechanistic process or protocol is being followed during these interactions. They’re looking for that sense of exclusivity and personalization, and expect to be treated as a human being and taken care of by other human beings.

Summing up

I hope this discussion has convinced you of the value of offering a luxury customer experience to automotive users and given you an idea of what’s involved.

Capgemini is currently conducting detailed market research into customer experience in automotive – look out for the results in the next few weeks. Meanwhile, please get in touch if you’d like to know more.