Tataaa! The End. Or: New opportunities for the car business
Mastering the new. This was the reason why VW works council chairman Bernd Osterloh called for an additional board member to deal with the topic of digitalization at Volkswagen – a management function at top management level that would explicitly address the complexity of digitalization. The company is not lacking in good ideas, Osterloh says, but “The question is simply: who will bring it all together”?
A call for someone to focus on immediate change rather than designing the company’s visionary transformation into a mobility company? After all, the car manufacturer had in Johann Jungwirth a reputable CDO already. However, it is one thing to design a visionary transformation process showing the path towards a possible future for the company and another to manage change that is required to prepare the organisation. (Please note that I discussed already the difference between change and transformation as well as their interrelation in an earlier article).
In this context, I remember suggesting to one of my clients to digitalize parts of the company’s customer journey in order to stay ahead with shifting consumer behaviours. It was 2000. A time when more and more people discovered the internet for other things than merely academic purposes. However, my clients met my suggestion with doubt – “Why should we need a website? Do you really think consumers will shift to online or isn’t it not merely a fashion thing?” Everything digital was grey fog back then. Since then, consumer behaviour e.g. in the automotive business has changed. Drastically. The sales funnel shifted online and almost 90 percent of customer touchpoints have become digital. Foreseeing change and preparing for its implications is crucial, i.e. when this change forces entire industries to transform their business model and revise their corporate purpose.
Not new technologies change the world, but undiscovered consumer needs
The rapidly advancing digital (r)evolution is presenting companies with new challenges almost every day – hitting the automotive industry right at its core, with prominent topics such as e-mobility, autonomous driving and digital value-added services. It is all about mastering new challenges on daily basis in a rapidly evolving digital world and shifting consumer preferences.
While customer behaviour patterns are changing in response to ecological, technological and social developments, they force automobile manufacturers not only to transform their business – from delivering a car to providing value-added mobility services – but also challenge their communication patterns. What is at the heart of a brand’s identity, might become a burden. If a brand cannot move on from “Das Auto” to become “The Mobility”, its relevance will fade away soon.
Compared to modern electric vehicles, such as the QUANT 48VOLT, which is powered by advanced flow cell technology rather than conventional batteries, the classic car is “old school” without valid sales arguments. Two generations on – the streets will be full of E-cars – kids will wonder what turbochargers, 9-speed transmissions, DSG gearboxes, catalytic converters and dual carburetors were ever needed for.
Newly emerging value chains redefined consumers’ touch points
The classic sales funnel of the car industry has mapped the customer journey over a certain period of time, thinking in product cycles. Customer dialog intensifies shortly before the new purchase “is due”. With the dawn of networked mobility services, manufacturers are creating completely new business models that don’t live by product cycles anymore or single points of sales. Digital service offerings via apps, mobile software updates via cell phones or digital platforms with central access to the vehicles’ software – the number of customer contact points AND sales points have increased significantly. Instead of thinking in terms of product cycles, customer dialog has become an ongoing task.
Reading the signs and predicting what consumers will perceive as added value for their future mobility needs is a challenge. Equally important is to understand how to design and take up the dialogue with digitally agile and multi-active consumers that can have a myriad of touchpoints with all brands at any time, having those touchpoints create a consistent and unique brand experience with your company. Digital marketing is not a tech gimmick in communications anymore. Our experience is that precisely mapped and designed digital customer journeys become more efficient and transparent – as brand you can enter into very targeted customer dialog, engage consumers in storytelling and even can lend purpose to consumers.
Changing who you are and what you are known for as a brand might be risky, but sometimes without alternative.
While car manufacturers are struggling to stay ahead of constantly evolving consumer needs, value chains are disrupted and business relationships with once loyal suppliers are given the count. An entire industry is about to redefine its business and purpose. How well companies will succeed is not merely a matter of their technical, but also communication competence. Building a new, authentic corporate purpose, (future) employees, investors and customers can trust in, is a matter of new thinking. Don’t forget, it also comes with new opportunities.
We know how to map touchpoints for customer journeys, create dialogue with consumers along the way and generate leads for businesses. We also support companies to carve out their corporate purpose and provide brand edge. In doing so, our clients benefit from our curiosity for the new as much as from our extensive automotive industry insights. Look at us as your sparring partners with strategic and creative expertise for fresh perspectives in communications.
Purpose has become a fundamental factor that drives decision-making processes. This has tremendous implications for human resources.