We live in a customer-driven world
Marketers know this best: they strive to build brand value and customer loyalty today, and in the future, but the impact on revenue is hard to measure in the short term and often underperforms against expectations. The transportation and mobility industries, and especially the auto industry, are not immune to this classic struggle.
A gap exists between an original equipment manufacturer's (OEM) or national sales company's (NSC) desire for customer lifetime value (CLV) and a dealer’s distinct desire to sell vehicles today. This is why many dealers are hesitant to consider collaborative options beyond the incentives system that they have come to know and love. For them, incentives equal cars sold—and one does not exist without the other.
Dealers are not entirely wrong. Incentives are key to making a good number of sales, especially in moments when the customer is close to purchase but needs an additional monetary stimulus. In cases like this, the power of incentives is undeniable. Step back to look at the bigger picture, however, and it becomes quite evident that converging industry and market forces are pushing toward an enhanced customer experience rather than a purely sales-driven approach. By focusing on sales numbers alone, dealers run the risk of establishing short-lived, transactional relationships with their customers rather than creating the lifelong loyalty characteristic of an experiential automotive brand.
So, where does that leave the traditional incentives system? How can incentives be used to change the customer and business dynamic? And how is performance best managed across the network?