'Consumers are changing, OEMs need to adapt'

Anuraag Bharadwaj, Vice President and Industry Platform Leader for Automotive - India at Capgemini, is responsible for defining strategy and scaling up strategy execution for growth domains, as well as resolving bottlenecks in critical programs. Earlier in his career, he was tasked with managing large P&L operations while delivering cutting-edge solutions like connected cars for Maruti Suzuki India Ltd. and Honda Cars, among others.

Bharadwaj spoke with Autocar Professional's Shahkar Abidi in the context of a recent report released by Capgemini Research Institute, titled 'Joining the race: Automotive's drive to catch up with customer experience'. The report reveals a significant gap between how automotive business leaders and consumers perceive the quality of their customer experience, an aspect crucial for the industry to understand. Below are the excerpts.

The report highlights a significant gap between how automotive executives and customers perceive customer experience. Could this gap be influenced by cognitive biases such as overconfidence or optimism on the part of business leaders? How might such biases affect decision-making in the automotive industry?

This is a very interesting topic. Now, coming back to the report, it is based on extensive feedback, involving interactions with 10,000 consumers and 600 executives from OEMs, mobility providers and other component suppliers. What's interesting is that there seems to be a disconnect in perceptions. I often feel that whatever I am doing is great; for me, my reality is what I perceive. However, for you, my reality is shaped by what you see. This creates a gap in understanding. This gap arises because the terms "consumer" and "customer" are often used interchangeably to describe the same group. The differing perspectives of consumers and executives can lead to misunderstandings about expectations and experiences in the automotive industry.

What I have observed is that we are exposed to various kinds of services and the digital disruption that has taken place. Access to valuable solutions was previously very limited; only a privileged few could get that experience. Now, this digital proliferation has made such experiences ubiquitous.

Take mobile technology, for example - almost everyone has a mobile device now. The experience we get on the mobile has heightened my expectations for what I want in a vehicle. I expect the same level of ease and convenience when purchasing a vehicle as I do when buying products from Amazon, Flipkart or any other platform.

On one hand, our exposure to these digital experiences has increased significantly. On the other hand, our expectations have also risen. However, OEMs and executives often believe that these changes should not affect them because their product class is different. The product I operate is high-value, and its impact is very different. My brand basically communicates trust. While this may have been sufficient in the past, things have changed. 

We were receiving input that prompted me to ask, "Why not conduct research?" Why should I limit myself to my instincts and approach an executive, potentially offending them by suggesting their perspective is incorrect? We needed to identify the issues and gather data. Perhaps I was misinterpreting the situation due to my biases. Now, our approach is purely data-driven. It has no biases from any of us, and customers will understand that. I wouldn't call [OEMs’] perceptions or projections biases; it's based on the data sets they have. Not everyone is actively engaging with the market, and the feedback coming from the market is not processed properly within the system. I would describe this as an information gap.

Is there a measurable spillover effect where best practices in one industry, such as e-commerce or another sector, raise the bar in a different industry, like automotive?

Normally, when it comes to customer experience, marketing agencies examine this issue. They have conducted research on this topic and found that it differs significantly from geography to geography, demographic to demographic, and based on economic viability. That's why assigning a specific number to this impact is very difficult.

When social media started gaining traction, particularly around the 2008 to 2015 period, we used to do sentiment analysis. At that time, I was not part of Capgemini, but sentiment analysis was a big thing in the market. There was a lot of excitement about how this would change the world.

The comments and feedback we received during that period were very polished and nuanced; they were not categorical in their expectations. Now, when I look at the current situation, people are restless and brutal. Their expectations are spot on. They know exactly what they want and how it should happen. They quote the example of Amazon, which provides clear information about their orders, such as product availability and delivery timelines.

They say, "You will receive your product in three days", and they provide updates minute by minute. My automotive customers specifically expect the same thing when configuring their vehicles. We are designing solutions to address this. Customers often ask, "If Amazon can provide information across so many different channels, why can't you give me the same information about my order?" This is how they are raising the bar. I was also discussing my experience with smartphones. When I first experienced a 30 Hz phone display, it quickly became outdated. Now, 60 Hz is the standard refresh rate, and they are moving towards 120 Hz.

Now, that experience which I am accustomed to, if my touchscreen in the vehicle is not doing that, I will say, "What nonsense, you are such a big brand. And my Alexa can understand my voice, right? My understanding is that my command can execute. But your command system is not able to understand.”

So, this is where the bar is going up drastically. You see, the voice-to-text or voice-to-voice command thing, earlier Siri was trying to do that. And other people were doing that, IBM was also trying to do that. Now, what happened is, suddenly when Google started Google Assistant and Amazon started Alexa, suddenly these models got trained so fast and the level of communication has changed completely. I still remember in one of Google's things, Sundar Pichai talked about how the assistant which is sitting on the other side is software rather than a human being. And we wondered, I mean, how could it happen? Today, that is common, almost every chatbot is able to talk and give you the context and a much more focused answer.

In automotive also, we are the same people. So, we have these experiences when we go to the vehicle, from purchase to the in-vehicle experience to services to everything, we want this experience and we say, why can't you provide it? This is available. We understand a bit of technology and things and solutions also. And you are, which, well, this is not so complex.

The study talks about the disproportionate focus on pre-purchase. So what are the main obstacles preventing organisations from investing more in post-purchase experiences? Is it a short-term revenue focus, or do you think other cognitive or organisational barriers are there which may be preventing them?

I will look at how we're designed to work, and when we say we, it's how the corporate world is designed to work, and that's what is also prevalent here. So when you make a sale, it's tangible. You can count, it's hardcore number driven. You say, I did this and my sales went up by so much.

There is direct correlation you can execute. Any manager, business manager, business leader, thinks this is where my revenue is coming. I am ready to invest. They are the people who have the money. They have the budgets. They have the say in the organisation. So all these complex phenomena come together. If I produce the vehicle and I don't sell it, I am incurring losses. So I have to liquidate my inventory. Mostly you will see it's a cash and carry industry.

OEMs require advance payment from dealers - not even a single day's credit is given. Currently in the Indian market, there's a Rs 70,000 worth of inventory overhang in the system. OEMs are working with banks to help dealers through low-interest, long-term, easy loans. This is why, despite the festive season, SIAM numbers show a dip - the market is flooded.

Despite the festive season, there's a dip because the market is flooded. This drives investment in sales and shapes the customer journey. It starts with the moment of truth - when someone first thinks about buying a vehicle or mobility solution. From there, they have numerous options.

They immediately search Google for vehicles in their class and price range. If this information isn't readily available, the experience suffers. When websites ask for personal information like phone numbers and email IDs, customers hesitate because they know it leads to pesky calls. However, some companies have successfully used customer data to create positive experiences, which I'll discuss when we cover Gen AI. This focus exists because it shows immediate business outcomes.

That's why there's such strong emphasis on customer experience at this stage. Moving to the services part - globally, service revenue belongs to dealers in the business model. How the dealer looks at it when a customer comes – it's not a human being who is walking in with a vehicle.

It's a person who is covered in money and that is walking. Now, how much of a pound of flesh I can take out of him, because that's my revenue model. I am least concerned about what is there, because I know in this whole district, or in this region, 10 kilometres radius, there is no other service provider who can service this vehicle. 

Once you've bought the vehicle, you must return for servicing. You need to come in for warranty periods, free services - whether it's three services, or five, or two-year services. So dealers can deliver whatever experience they want. And I am not the brand, by the way, if the name is going bad, it's going off the brand. They've already got their money.

OEMs also lacked incentive to change this. In India, while OEMs own the dealer management systems, dealers must pay for implementation, infrastructure, and royalties. Now, what OEM thinks, if I develop this solution, or I provide this solution, what do I get in return? That is where the challenge was. 

But things are changing fast as people realize this approach isn't working anymore. Customer loyalty is declining dramatically. It's a basic marketing principle that retaining customers is more economical than acquiring new ones. With today's information, products, and channels available, acquiring customers is becoming increasingly difficult. Plus, with mobility solutions available, people aren't forced to buy vehicles anymore.

Please continue.

Companies are now saying, "Hold on - we have something valuable here. Let's preserve it." More solutions are emerging in the customer experience area. Take connected vehicles, for example. Currently, you might get a random call saying your service is due after three or six months. You might respond, "I've only driven 200 kilometers because I was traveling. Why should I service my vehicle?" Now, with telematics data (which you've consented to), they can see your actual usage.

They can access that data. They are accessing. They know from the last service you have travelled only 200 kilometres. Instead of just checking service schedules, they could say, "Ma'am, we notice you haven't driven your car much. Is everything alright? Have you been traveling?" That would show genuine care - the human touch we expect. Why should interactions be purely business-focused? People want real relationships. That's where the gap is, and that's where investment needs to go. Customer lifecycle value is becoming crucial. That data also has come out in this report, that if you are not delivering the customer the right kind of experience, be ready to lose money and lose it big time.

So the report shows a notable discrepancy in the net promoter score (NPS) between customer and executive perceptions. Did you explore the reason behind this gap? If you can provide some context on it?

So NPS is like a person is asked a question and asked to rate, and the range of rating that person can provide, minus 100 to plus 100. So it's like, if somebody is really or truly angry with you, they are given enough firepower to demolish? In this report, sectors like financial services, insurance, and banking show high NPS because they're not offering tangible products - they must excel at customer experience. Customers have choices there - they're not locked into one insurance provider. So it has to be a great customer experience. 

So, when this question was asked, people responded to the entire ecosystem, the entire experience that they get. It said, you promised me great things at the sales point in time, but this is how you treated me during ownership. I didn't expect this from you. While OEM executives weren't completely disconnected from reality, the gap between 2 and 12 is significant.

They have cushioned it a bit. They acknowledge room for improvement, saying "My customer isn't very happy. We can do better." But there's still justification: "We're providing adequate service. Yes, you wait 10 days for booking, but we're servicing your vehicle." This cushioning, while partly justified for complex vehicles, shows how filtered information affects their grasp of real-time customer experiences. That's what I believe causes this disconnect. They also know they have cushioned it a bit, and they would say, "No, my customer is not very happy with me. I know I can improve a lot and he can grow".