What China’s automakers can learn from DTC brands

Few Chinese car buyers are ever fully satisfied with their purchase journey and automakers could learn from how DTC brands approach the customer experience, according to consulting firm McKinsey & Company. 

Why it matters

Customer experience is becoming an important differentiator for brands across multiple categories, so it makes sense to look at what DTC brands are doing: they have typically been built on a CX that addresses the pain points in existing customer journeys.

McKinsey also notes that, over the past decade, global leaders in CX have delivered returns to shareholders three times higher than less committed competitors. 

Takeways

• Electric vehicle makers are already deploying effective DTC strategies, connecting directly with customers and setting prices consistently (opaque pricing in the car purchase journey is a particular pain point identified by McKinsey). 
• When auto companies move to a different sales model they need to focus on customer engagement and driving loyalty as well as the internal mechanics of invoicing and dealer remuneration.
• Automakers’ traditional business model has meant limited engagement with end customers: learning how best to manage users will be a priority. 
• McKinsey advises making legacy dealers part of a DTC set-up: they already have close customer relationships, and retail touchpoints will remain an important factor in auto purchasing decisions. 

Key quote

“DTC sales models empower auto OEMs to curate omni-channel, end-to-end customer journeys in which customer engagement and experience are prioritized.

“Those that act fast to define a clear strategic focus that puts the customer first are most likely to win the next frontier of automotive retail in China” – Daniel Birke (partner, Beijing office) and Alexander Will (associate partner, Shanghai office) at McKinsey & Company. 

Sourced from McKinsey & Company

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