connected customer

Commercial Services | Automotive

The automotive‘Connected Customer’Customers are taking control of the salesprocess – how can you make the trendwork for you?

6411_Automotive Report_v6:Layout 1 29/1/09 12:05

1. IntroductionAt BearingPoint we believe the arrival of Web 2.0 has

enabled a paradigm shift in the way automotive consumers

behave. It is of huge significance to the industry, and it is

not yet complete.

‘Web 2.0’ is a phrase which has become the preserve of digital marketeers and technologycompanies. As a result the Web 2.0 debate often has been focused on the ‘art of thepossible’ from a creative and technical standpoint. Yet the real issue for the automotiveindustry is what impact this next generation of the Internet is having on consumerbehaviour, and how car manufacturers and their dealers should adapt their well establishedCustomer Relationship Management (CRM) models to reflect these significant changes inthe traditional car buying process.

The changes we identify in this report are ongoing, and growing. They manifest themselvesin the way customers are using Web 2.0 to take control of their own buying process,removing control from manufacturers and dealers

In simple terms, the information which people use to decide whether to buy a car no longercomes solely from the industry – it now also comes from other buyers and owners.

BearingPoint calls the newly-empowered consumer the ‘Connected Customer’. It’s an areawe have become the leading experts in, across multiple industry sectors.

Instinctively, not least as consumers, we all recognise this is happening to some degree –but if the automotive industry is to meet this challenge and exploit it, there needs to bereliable data to base decisions upon. Until now, this data did not exist.

We set out to bridge this gap. This report gives an overview of detailed, quantitative andqualitative research carried out in this area specifically for the automotive industry, allowingmanufacturers and dealers to make strategic business decisions based on real data.

The findings reveal the scale of the challenge for manufacturers and dealers, making clearthat they need to readdress the way they interact with existing and potential customers.

We hope they provoke debate within the industry, and we believe they show thatBearingPoint continues to demonstrate leadership in the automotive sector in providingcounsel, solutions and advice to our clients.

I’m confident that what you will find in the pages ahead will give you pause for thoughtabout our industry.

James RodgerVice President, Global Automotive LeaderBearingPoint

6411_Automotive Report_v6:Layout 1 29/1/09 12:05

Automotive Report | 1


The automotive ‘Connected Customer’

Contents

1. Introduction

2. Executive Summary 2

3. Key Findings 5

4. The ‘Connected Customer’: responses, suggestions and the challenges andopportunities for manufacturers and dealers. 7

5. In conclusion 10

6. Methodology 11

7. Detailed findings 13

7.1 Car buyers instinctively turn to the Internet to research their purchase 13

7.2 Online sources form a powerful alternative to traditional methods ofresearching a car purchase 14

7.3 Customers trust manufacturers on the empirical details... 16

7.4 ...but they turn to consumer review sites when it comes to the experience 16

7.5 Trust in dealers is low 17

7.6 Independence of opinion is key for future customers 18

7.7 Customers are actively engaged in providing content for websites 18

7.8 A wide range of people are using online communities... 20

7.9 ...and a shared sense of community is the most mentioned reasonfor using them 21

7.10 Interaction and experience are high on customers’ priorities foronline communities… 22

7.11 ...and manufacturers are going to have to be smarter about thefeatures of their websites 22

7.12 Actually buying a car online is still a step too far 23

7.13 Manufacturers can be flexible in combining the online and thephysical experience 24

6411_Automotive Report_v6:Layout 1 29/1/09 12:05 Page 1

2 | Automotive Report



2. Executive SummaryThe ‘Connected Customer’ – how car buyers have taken

control of the sales process.

The research that we will examine in this report shows that

a watershed moment is upon the automotive industry. To

understand the scale of this change it’s important to think

about how comparatively quickly it has occurred.

In a century the industry has gone from Henry Ford rolling out the first mass-producedcar, the Model-T, to selling family cars which can park themselves and cruise on anautobahn at 140 mph using their own radar.

Yet the way customers buy these vehicles, probably the second most expensive itemthey purchase after their home, had barely changed at all. The line of purchase, fromadvertising, through car magazines reviewing the product to the customer testing thecar at a dealership and then purchasing would be as familiar to the Model-T buyer asit is to the owner of the latest generation Mercedes S-Class.

RACfounded

AAfounded

First radioadvertin USA

First TVadvertin USA

Radio Carolinestarts

broadcasting

Top GearBBC2

Model TFord

introduced

KwikFitlaunched

1900 1950 2000

Top Gearmagazine

Miniownerslounge

AutoTraderonline

GMNextsocial

community

WhatCaronline

FaceBooklaunched

Blockexemption

Amazonstarts

trading

First cardealers go

online

BBCRadio

Internetcreated

ITVlaunched





As in so many areas it is the Internet and communication technologies which have driventhe changes

Initially, in the 1990s, Web 1.0 gave consumers informational choice on a scale they couldnever had imagined, but the information they were using was essentially unchanged –it was provided by suppliers of goods and services in the same way it always was, juston a greater scale and via a new medium.

The acceleration of change in the last five years, with the advent of Web 2.0, hasbeen phenomenal. This second-generation Internet is hugely more interactive – it hasbecome a tool rather than simply a funnel for carrying information – and its directionand development is increasingly driven by everyday users, rather than businessesand organisations.

At BearingPoint our interest, across multiple industries, has not been in the technologywhich makes this possible, but in the effect it has on customer behaviour and itsconsequences for businesses. In the automotive sector this is starker than in manyindustries, thanks to the linear nature of the way people have bought cars for decades.

What manufacturers and dealers should be thinking about today is not only how farbehind this curve they may be, but where they will need to be in five years’ time. Thestaggering pace of the changes which have taken place since the turn of the centurywill only increase.

To act, businesses need quality data, and until now this has been thin on the ground.

The primary research that we review in this report raises the bar – by providing solidevidence of what has changed and why. This provides automotive industry decision-makers with real data and tools on which to build strategies that will help to meetand exploit these changes in the marketplace.

BearingPoint calls this new buyer the ‘Connected Customer’, a new breed of informed,confident and networked consumer who seeks out the information he needs to make abuying decision himself (and often ignores that offered to him by suppliers of goods andservices). Crucially, he often does this as part of an online community, trusting theinformation he shares with like-minded consumers.

In many cases, then, he has made a decision about whether or not to purchase before heinteracts with the car manufacturer or its dealer network at all. How can the industryface up to this challenge?





We see it as positive, not negative. The key word which underpins our findingsis ‘opportunity’.

We do not, for example, suggest that the dealer model is out-dated.

On the contrary we found that the point of purchase is unlikely to change in the near andmedium-term – but our research does show how customers are making their decisionsabout which car to buy long before they arrive on the forecourt. Moreover, the customerwho arrives at the dealership today is vastly better informed about the models on offer,the options available, the financial realities of the deal he can achieve and, finally, is ableto check what he’s offered in real-time against what is available from the entire marketregardless of geography.

What does this mean for dealers and manufacturers? More than anything it means thedealers’ role must change if they want to sell cars to the new ‘Connected Customer’,whilst manufacturers need a new CRM model if they are not to lose further influenceover potential customers.

In summary, this report shows that there is no revolution in car buying, but thereis fast-paced and constant evolution which, if not understood and acted upon by theindustry, could have dramatic effects on sales and market share.

It finds many positives along with the potential threats and we at BearingPoint havesolutions formed from our long experience and from this new data which can helpmanufacturers and their dealer networks exploit them.





3. Key Findings

3.1 What’s changed?

In simple terms, customers now see themselves as in control of the sales process,and our research and analysis suggests they are right.

Historically, customers decided whether or not to buy a car in the showroom – today theyare increasingly making that decision in their living room.

The Internet is now the primary source of information for car buyers – and morepowerfully still, the areas of the Internet customers go to for trusted informationhave changed too.

We found that whilst respondents still trust manufacturers’ data on the facts (mpg,top speed etc.), it was increasingly other buyers, forums and independent websites theylistened to when it came to qualitative and experiential information (reliability, comfort,cost of ownership, etc.).

The challenge for manufacturers and dealers is to recognise these changes, address thisgrowing loss of influence on the buying decision, and adapt from the old command-and-control CRM model.

3.2 The role of dealers is changing

Our research shows that consumers trust manufacturers for empirical data, andother buyers/reviewers for comparative data, but we found that trust in dealers wascomparatively low across the board.

Adding the ‘Connected Customer’ to the equation creates a problem for dealers – ifthe customer doesn’t trust the information he gets from dealers, and he can now getinformation he does trust from elsewhere, what role does he see the dealer taking inhis potential transaction?

The answer is a very functional role – the ‘Connected Customer’ sees the dealer as thepoint of test-drive, purchase and support.

Of more concern, though, is the fact that many ‘Connected Customers’ have rejected aparticular model before test-drive, so the dealer never has a chance to influence thebuyer at all.

One customer, who purchased a new Land Rover in 2008, told us:

“I read the Top Gear review, amongst others, but what mattered most to me wasspeaking to, at least electronically, perhaps ten or fifteen people who had alreadybought the car, and reading what twice that number of people thought on the‘What Car?’ website. By the time I came to make a buying decision I was aware ofthe pitfalls and the advantages and had rejected models from Porsche, Audi andBMW on the strength of owner reports and forums, together with the deals available.

“I didn’t visit a dealer until I’d identified the exact car, never mind model, I wantedand negotiated a price. That was the only dealer I saw, a long way from home.I agreed a deal, subject to test drive, and ultimately bought the car.

“My buying process took about two months, but I spent about two hours at a dealerin all that time – to pay and drive it away basically.”





3.3 Online – but only so far

What quickly became clear to us was that whilst the Internet was the mostsignificant tool in deciding which car to buy, it was not seen as a means of actuallymaking a purchase.

People felt strongly that they wanted to ‘see and feel’ the model they might buy. Theyalso didn’t trust online pictures as a guide to condition, and wanted to deal ‘face to face’with a dealer. Fewer than one in five would even consider buying a car online.

At BearingPoint we see this as a major opportunity for dealers. We have seen that therole of the dealer is changing, but the data makes clear that the dealer will have a clearrole in future – in providing test drives and being the final point of purchase and support.Dealers must quickly understand what their role is in this new environment, and executeefficiently and professionally.

Yet combining this trend with the point at which the ‘Connected Customer’ makes hisbuying decision also presents a major challenge – dealers may well only get one chanceto influence these new customers; the ‘Connected Customer’ will arrive later in the carbuying process, be better informed, and will be more confident.

3.4. Opinions are increasingly being shared

Online communities are growing, and individuals amongst them increasingly understandthe impact of their views on a given car, and are more and more keen to share them withother potential customers.

This twin growth (in those seeking the information, and those willing to provide it)indicates that the market impact of online communities will continue to grow – threequarters of respondents indicated that they already had contributed, or would be willingin future to contribute, their purchase and ownership experiences.

However, in the automotive sector the trend is still relatively immature compared toother sectors such as travel and consumer electronics.

The question for manufacturers is how long will it be before a more mature onlinebuying guide for the automotive industry which mirrors travel sites such as‘Trip Advisor’ emerges?

Already, major automotive consumer publications such as ‘What Car?’ and ‘MotorcycleNews’ host well-used forums and customer review pages, but there is not yet a ‘one stopshop’ such as ‘Trip Advisor’. We believe this is a question of when, not if, though.

How will manufacturers first embrace and then influence this? How will they assessand respond to information, and ensure customers with good experiences take part (oursurvey showed that almost as many people would be willing to contribute after a positiveexperience than a negative one), and stay one step ahead as sites change and grow?


@@Email

MobileTerminals

www.www.

CorporateWebsite

MobileMarketing

Call CenterLevel 1

Call CenterLevel 2

Point ofSales

Dealers

txttxt

SMS

txttxt

SMS IVRIVR

The Corporate or‘Transactional’ Realm

The ConnectedCustomer or‘Relationship’ Realm

CustomerExperience

Inte

rnet

Telephone

Physical Netw

ork

Lean Lean

Testing MarketingConcepts

Co-creatingOfferings

Tailored Collaborative TailoredCollaborative

Participating Listening Influencing TestingMonitoring

Developing& Measuring

Advocacy CommunityMonitoring/Influencing

Facilitating Customerdialogue

Self-helpKiosks




4. The ‘Connected Customer’:responses, suggestions and the challenges andopportunities for manufacturers and dealers.

With the arrival of Web 2.0, customer communications can

be divided into two distinct realms – traditional, functional

and transactional interactions on the one hand, and the new

subjective and experiential data shared between customers

on the other. At BearingPoint we call these the ‘Corporate’,

or transactional realm and the ‘Connected Customer’,

or relationship realm.

The Corporate realm – future strategies for manufacturers and dealers

The Corporate realm (shown in the upper half of the diagram) will remain the domain ofmanufacturers and their dealers. The interactions in this realm will be largely transactional,and therefore future strategies here need to focus on increasing automation andefficiency and making it as easy as possible for customers to interact and do businesswith them.

Manufacturer CRM models should reflect this and, as we have already seen, dealers inthe new marketplace fit wholly into this role. To deliver upon the expectations of the‘Connected Customer’, manufacturers must understand consumers ‘empirical’ informationrequirements and make it easy for customers to access the information they want (andtaking advantage of cost-out opportunities by not wasting money on digital gimmicksthat customers don’t actually value).


In support of this, dealers must understand the functional requirements of ‘ConnectedCustomers’ regarding test drives, financial transactions, and ongoing support. They needto execute these processes as efficiently as possible, recognising that ‘Connected Customers’will contact them later in the car buying process and thus giving them potentially onlyone opportunity to get this right.

Equally, dealers need to be empowered with the same access to information as the‘Connected Customers’ they are seeking to sell to. Manufacturers need to ensure theirknowledge management systems support the provision of this information.

Interacting in the ‘Connected Customer’ realm –monitor, listen and influence

The relationships which used to exist between customers, manufacturers and dealerslargely have moved to the ‘Connected Customer’ realm. Crucially, this is also where thenew relationships between customers exist.

Manufacturers cannot control this second realm but they can influence it, sometimessignificantly. They must develop strategies to deal with the new breed of ‘ConnectedCustomers’ that occupy it. Strategies in this realm will focus on monitoring, listeningand influencing – including the sponsorship or set-up of affinity communities as wellas developing brand advocates who will influence other ‘Connected Customers’.BearingPoint believes that this must be a priority in 2009 for manufacturers,even amid the economic difficulties of the wider market.

Manufacturers must understand that their ‘old’ command-and-control approach tomarketing communications is inappropriate for the Web 2.0 environment. ‘ConnectedCustomers’ make up their own minds as to whom to consult, and have a myriad optionsavailable to them.

It will be important to maintain integrity in the Web 2.0 environment; any attemptsat manipulation by manufacturers and dealers will be obvious and damaging (the‘Connected Customer’ will recognise anonymous posts from suppliers: contributors to‘Trip Advisor’ and ‘Amazon’ occasionally point out the dubious sources of comments).However, pro-active, transparent interventions need not be manipulative and couldbe welcomed if presented appropriately.








For example, by identifying ‘Connected Customers’ who are openly supportive of acertain brand, manufacturers can cultivate and nurture brand advocates and use theirsupport to attract other potential buyers. Another opportunity is the sponsorship of acommunity which has an affinity to either a brand (for example an owners’ club)or the values of that brand (high performance, excellence in design etc.).

By embracing those Web 2.0 forums that are opinion-forming, manufacturers anddealers may participate directly in the exchange of information with ‘ConnectedCustomers’. For example, manufacturers and dealers could provide links on their ownwebsites to independent review websites (as for example already happens in the travelindustry). This not only makes it easier for the customer to search for independentinformation, it also shows an open and honest approach, and a high level of confidencein the vehicles and services being offered.

Given that ‘Connected Customer’ communications are so impactful on other customers’decisions, it is important that manufacturers and dealers are aware of what is being saidabout them. Companies should determine how to monitor 3rd-party web activities suchas review sites and blogs, and respond to them appropriately.

Not only is this a chance to influence individual buying decisions with timely andappropriate interventions, it is also an opportunity to identify customers at risk ofdefection from the brand and take individual corrective action. It also provides acost-effective source of marketing intelligence by enabling understanding of whatconsumers like and dislike about products, and offers an opportunity to take this intoaccount for future product development and marketing campaigns. Additionally,it can be an early-warning system for product defects and other corporate issues.

To make this work effectively, companies must assign accountability within theorganisation for this activity (whether marketing, CRM, corporate communications,etc.); determine how to make effective interventions when appropriate (with anappropriate code of conduct – open, transparent, honest, etc.); and ensure a systemfor internal feedback to exploit early warning of problems (such as those which mightnot be picked up by warranty).


5. In ConclusionThe key factor in all these findings is that they represent

a great opportunity for manufacturers and dealers to take

advantage of what is happening.

There is no bad news – yet. It will only become so if nothing is done.

What is clear is that this is a trend set to continue, to grow and to become more andmore significant. The question for manufacturers and dealers is not whether to engagewith it, but how to.

BearingPoint has developed the answers to many of these questions. Our experiencedglobal automotive team would be happy to discuss these issues further with you, anddetails of some of the key team members can be found at the end of this report, togetherwith their contact details and areas of expertise.

We think you’ll be surprised at just how much we can help, and at the effect we can haveon how your business can take advantage, today and in the long-term, of these excitingchanges in the way people buy cars.








6. MethodologyWe surveyed 1,002 people across the UK who had chosen

a car as a retail customer or a fleet user-chooser in the

preceding twelve months, or intended to in the next

twelve months.

So that we could be certain our respondents were comparing like with like, quotas wereset to ensure that we mainly spoke to those who were buying new or nearly new cars.In order to retain a balance within the sample, soft quotas were put in place to obtaina good spread of age and gender, and to allow us to analyse the relevant sub groups indetail. The fieldwork comprised of an online questionnaire sent to a random sampleof panellists.

Figure 1: The demographic make-up of our respondents

Demographic % of respondents that % of respondents Total %had bought a car in intending to buy a carthe last 12 months in the next 12 months

Male 49 53 52

Female 51 47 48

18-24 9 5 7

25-34 11 15 13

35-44 20 23 22

45-54 24 22 22

55-54 19 24 22

65+ 17 12 14

Source: FreshMinds Research / BearingPoint survey





0

10

20

30

40

50

60

Perc

enta

ge

A franchiseddealer

A non-franchisedgarage

A private sale A car auction Don’t know/other

Have bought in the last 12 months Will buy in the next 12 months Total

0

10

20

30

40

50

New Less than 1 year old 1-2 years old 3-4 years old 5 years old+

Perc

enta

ge


Figure 2: Age of the car for our respondents


Figure 3: Vendor of the car






7. Detailed findings

7.1 Car buyers instinctively turn to the Internet to research their purchase

When we asked where the ‘first port of call’ was for researching the purchase of a car,‘the Internet’ was the most mentioned response. Even though television and magazineadvertising represent the greatest expenditure by car companies in attracting customers,buyers do not see these as primary sources of information.

Figure 4: Where did you / will you look for information before buying your car?


Digging deeper, when we prompted respondents with a series of options, it becameobvious that the manufacturer’s website is the first place that buyers go to researchtheir purchase – although, as we shall see later, only certain information is sought andtrusted. This represents an enormous opportunity for car manufacturers to mould theinitial conversation with their customers, and begin to drive online brand advocacy.

Figure 5: Which of these sources did you / will you consult?


0

10

20

30

40

50

60

70

80

Perc

enta

ge

Internet Carmagazines

Dealers Newspaper Friends& family

Carbrochure

TV Ownopinion

Don’tknow

Other


0

10

20

30

40

50

60

70

80

Perc

enta

ge

Have bought in the last 12 months Will buy in the next 12 months

Man

ufactu

rer’sw

ebsite

Catalogue

Afran

chised

dealer

Printed

consu

mer

magazin

es

On

line

consu

mer

magazin

es

Consu

mer

revieww

ebsite

Friends

&relatives

Indepen

dent

carretailers

TVm

otoring

show

s

Curren

tow

ners

Motorin

gorgan

isations

Socialnetw

orks

Oth

er

Non

eofth

ese





7.2 Online sources form a powerful alternative to traditional methodsof researching a car purchase

Figure 6: To what extent to you agree or disagree with the following statements?


Attitudes towards online sources, compared with more traditional sources of information,are revealing. As the chart above shows, when asking customers directly about theirattitudes and behaviours, online sources are relied upon heavily. There is also evidentrespect for the information provided by manufacturers (so long as it is factual information).Manufacturers should capitalise on this trend. They are increasingly the first port of call,but they are failing to secure a further ‘conversation’ with the potential customer.

So where do these customers go?

The value of consumer review sites is sometimes brought into question – after all, thecontent of these sites is unregulated and provided by anonymous sources – but it seemscustomers trust them. 70% in our survey agreed or strongly agreed with the statement‘I value independent opinions from online consumer review sites’.

We probed further into the experience of consumers when consulting car salespeople.We wanted to understand whether the perception of the car salesperson as being a lesscomprehensive source of information matched the reality. By comparing the responses ofthose that had bought cars with those that were going to, we discovered that the actualexperience is very similar to the reality. As the public face of the brand, car salespeopleare still not able to provide potential customers with all of the information that theyneed, and a flight to more independent sources is inevitable.

0

20

40

60

80

100

Perc

enta

ge

I use onlineresources to research

a majority of mymajor purchases

I rely on informationprovided by themanufacturer

when buying a car

I valueindependent opinionsfrom online consumer

review sites

Car salesmencan provide me with allthe information I need

when buying a car

Strongly agree Slightly agree Neither agree nor disagree Slightly disagree Strongly disagree





Figure 7: How much would you agree with the statement ‘car salesmen can provide me

with all of the information I need when buying a car’


Figure 8: How much would you agree with the statement ‘I research the majority of my

major purchases online’?


0

5

10

15

20

25

30

35

Strongly agree Slightly agree Neither agreenor disagree

Slightly disagree Strongly disagree


Perc

enta

ge

0

10

20

30

40

50

60

70

80

Perc

enta

ge

Strongly agree Slightly agree Neither agreenor disagree

Slightly disagree Strongly disagree

Have bought a car online Total





7.3 Customers trust manufacturers on the empirical details...

Consumer review sites are most popular for the type of data which comes from use andexperience. These are the types of information that another consumer would be bestplaced to provide. In simple terms, manufacturers are trusted to provide the hardfacts and figures around the vehicle, but not its comparative merits when set againstthe competition.

Figure 9: How much would you trust a manufacturer to give you reliable information on

the following factors?


7.4 ...but they turn to consumer review sites when it comes tothe experience

The chart above is almost perfectly reversed when we asked the same questions ofconsumer review sites. The top three are the areas where consumers trust manufacturersleast – reliability, second hand value and driving appeal.

Manufacturers ranked in top three

0

10

20

30

40

50

60

70

80

Vehicle

specs.

CO2

emm

issions

Taxdisc

band

Fuelcon

sum

ption

Safety

Performan

ce

Practicality

Insu

rance

group

Bran

dim

age

Run

nin

gcosts

Drivin

gappeal

Second

han

dvalu

e

Reliability

Perc

enta

ge





Figure 10: How much would you trust a consumer review site to give you reliable

information on the following factors?


7.5 Trust in dealers is low

Where trust falls away is when the dealer becomes involved. Customers did not eventrust dealers to be honest about hard facts – mpg, top speed etc. This represents adouble challenge for dealers: firstly our survey has shown that they need to find a wayof engaging with customers earlier in the purchase process; secondly they needto recognise that their role is largely functional as a point of test drive, purchasetransaction and ongoing support.

Figure 11: How much would you trust a car dealer to give you reliable information on

the following factors?


0

10

20

30

40

50

60

70

80

Vehicle

specs.

CO2

emm

issions

Taxdisc

band

Fuelcon

sum

ption

Safety

Performan

ce

Practicality

Insu

rance

group

Bran

dim

age

Run

nin

gcosts

Drivin

gappeal

Second

han

dvalu

e

Reliability

Perc

enta

ge

Consumer review sites ranked in top three

Car dealers ranked in top three


Consumer review sites ranked in top three

Vehicle

specs.

CO2

emm

issions

Taxdisc

band

Fuelcon

sum

ption

Safety

Performan

ce

Practicality

Insu

rance

group

Bran

dim

age

Run

nin

gcosts

Drivin

gappeal

Second

han

dvalu

e

Reliability

Perc

enta

ge

0

10

20

30

40

50

60

70

80



Will be more reliant Will be reliant about the same Will rely on less Will not rely at all

Perc

enta

ge

0

20

40

60

80

100

Socialnetw

orks

Carretailers

TVm

otoring

show

s

Catalogue

Curren

tow

ners

Franch

iseddealer

Man

ufactu

rersw

ebsite

Friends

&relatives

Printed

consu

mer

magazin

es

On

line

consu

mer

magazin

es

Consu

mer

revieww

ebsite

Motorin

gorgan

isations




7.6 Independence of opinion is key for future customers

Independent sources were the most mentioned as being places to go for futureresearch. It was clear that buyers do not regard the dealer as a source of informationabout anything other than purchase options – neither the dealer nor the manufacturerwere trusted sources for comparative information. In other words – the decision aboutwhich car to buy is being made before significant contact with dealers. Moreover, friendsand family, online consumer review sites, and car magazines were the sources thatcustomers could see themselves using more in the future.

Figure 12: How far do you think you will rely on the following sources in the future

when buying a car?


7.7 Customers are actively engaged in providing content for websites

Understanding how customers are using online communities is one thing, but who isactually adding content to them? We found that 26% of our respondents had alreadywritten an online review, and that 45% would consider writing one. Although our sampleis already Internet-savvy, these numbers show how widespread contribution to onlinecommunities is.





Figure 13: Have you ever written an online review?


Comments included:

“I was impressed with the product and was prepared to endorse it by writinga factual review to assist others in choosing the right item for them.”

“Because I use websites to get others reviews when making a decision about certainproducts and therefore I feel that I should also contribute my good or bad experiences.”

“Asked by the seller to review products and service.”

“Telling or sharing with others of a very bad service I encountered with a ‘supposedly’reputable company... I was not alone in my views as it happened.”

Some of the comments above highlight a typical criticism of online reviews – that theytend to focus on the very good, or very bad experiences. The generally-received wisdomis that contributors must have something that they really want to say in order to expressan opinion. We found otherwise. 23% of people wrote to share a bad experience, 22% toshare a good experience. Most interestingly of all, 20% just wrote reviews to share theexperience of the purchase.

Figure 14: What first prompted you to write a review?


Perc

enta

ge

0

10

20

30

40

50

Yes No, but would considerwriting one

No and I would notconsider writing one

0

5

10

15

20

25

Perc

enta

ge

Badexperience

Goodexperience

Sharingexperience

Asked to Communityspirit

Fromreading other

reviews

Debate Can’tremember





7.8 A wide range of people are using online communities...

Understanding the types of people that are using communities is important in highlightingwhether there is a wider trend towards these kinds of sites, or whether the trend islocated amongst a group typically considered more Internet-savvy (such as young menin their early twenties). When we asked how likely people might be to use an onlinecommunity for a make of car, we found a wide-range of people showed an interest.There was an even split between men and women, and although there was an inevitabledrop-off with age, between the ages of 18 and 54, there is an even spread of people thatwould consider using this type of community.

One of the factors here is that many of the forums and consumer test pages used haveassociations with established media brands trusted already by older people (‘What Car?’and ‘Motorcycle News’ for example).

Figure 15: How likely would you be to use an online community for a make of car?


Perc

enta

gePe

rcen

tage

0

20

40

60

80

100

Male Female

Very likely Quite likely Neither likely or unlikely Quite unlikely Very unlikely

0

20

40

60

80

100

Differences by gender

Differences by age

18-24 25-34 35-44 45-54 55-64 65+





7.9 ...and a shared sense of community is the most mentioned reasonfor using them

Communities are considered to be a useful source of information, but one of the mainreasons for using them is the ‘shared experience’ that using a community engenders.In other words, it’s useful but it’s also pleasurable.

Dominant barriers for people using a community as a source of information were adisinterest and a lack of trust in the information provided. By looking at the figureson the kinds of information which people seek from manufacturers, and the kindsof information sought from consumer review sites, there is a clear opportunity formanufacturers to provide potential customers with a combination of the empiricalfacts, whilst also working on the ‘shared experience’ that communities provide.

The difficulty for those companies who are being discussed on these forums andcommunities is, therefore, how to engage without appearing to be an unwelcomeguest at a party.

It can be done, and BearingPoint has some exceptional examples of businesses andorganisations which have been bold enough to do it, and have seen a huge drop-off ininaccurate negativity online as a result.

Figure 16: Why do you say this about an online community? (Answers for people that

say they’d be likely to use one, or those that say they would be unlikely).


Perc

enta

ge

Sharedexperience

Source ofuseful information

Unbiased Ease Curiousity Not sure

Motivations not to use

Notinterested

Don’t trust(or don’t like)using thesekind of sites

Unreliable Prefer othersources

Like to makedecisions myself

Biased

0

10

20

30

40

50

60

70

80

Motivations to use

0

10

20

30

40

50

60

Perc

enta

ge


Perc

enta

ge

0

10

20

30

40

50

60

70

80

90

100

Man

ufactu

rersforu

m

Latestn

ews

Usefu

lw

ebsites

Ow

ners

forum

Specialm

ember

benefits

Q&

Afor

prospectivebu

yers

Ow

ner

reviews

Techn

icalh

elp

Roadtest

reports

Reallifeexperien

ce

Very likely Quite likely Not likely




7.10 Interaction and experience are high on customers’ priorities foronline communities…

Understanding real-life experience, reading road test reports and getting technical helpwere all valued by customers.

Figure 17: How likely would you be to use an online community if it had…


7.11 ...and manufacturers are going to have to be smarter about thefeatures of their websites

Items such as computer downloads, ‘design your own car’ functions and informationon manufacturing were not considered as relevant. These items, which are often used todraw customers to car manufacturers’ sites all fall into the ‘fun and games’ category,or are likely to result in more of a feeling of being ‘sold to’.

Figure 18: How likely would you be to use an online community if it had...


Perc

enta

ge

Compu

terdow

nloads

Mailin

glist

Finan

cialservicesin

formation

Shop

forbran

dedm

erchan

dise

Inform

ationabou

tm

anu

facturin

gprocess

Inform

ationabou

trelated

events

Design

your

own

carfu

nction

Ow

ners

photos

orvideos

Drivin

gtips

Dealer

orservice

providerrecom

men

dations

Dealer

searchen

gine

Forsale

and

wan

ted

Must have Nice to have Not necessary

0

10

20

30

40

50

60

70

80

90

100





7.12 Actually buying a car online is still a step too far

Buying online is still considered a risk by most people, and this manifests itself in theamount of money they are prepared to risk. The idea of spending thousands on a caronline is seen as a step too far for most respondents. This is good news for dealers andmanufacturers – with the evidence showing that when it comes to handing over themoney and picking the car up, a dealer is the preferred choice (long-term support isalso a factor here).

This suggests that it is unlikely that cars will become as ‘digitalised’ as some otheritems, and that manufacturers can best use online sources to help customers researchtheir purchases.

Figure 19: How likely would you be to purchase or commit to purchasing the following

item online?


Perc

enta

ge

I already have purchased this item on line

I might consider purchasing this online

I would definitely consider purchasing this online

I probably wouldn’t consider purchasing this online

I definitely wouldn’t consider purchasing this online

0

20

40

60

80

100

Mortgage Car loan Car Washingmachine

Laptop Digitalcamera

Mobilephone

Holiday Insurance Clothing CD orDVD





7.13 Manufacturers can be flexible in combining the online and thephysical experience

We sought to understand the barriers to online purchasing in more depth. Most of thereasons mentioned for not wanting to buy a car online involved an aspect of the physicalexperience, such as inspecting the car, test driving the car or discussing the purchasewith a dealer.

Figure 20: Why do you say that you would not consider purchasing a car online?


These opinions were further displayed in the comments that customers made aboutcommitting to a large purchase such as a car online:

“I’d want to see it in detail first to examine every part of it, especially if second-hand.I’d also like a chance to take a test drive before committing to it.”

“I like the experience of going into the showroom and getting personal service.I feel more confident in the purchase, particularly if there is any recourse.”

“There’s no way of completely knowing the website’s “trustability” and you can’treally see what state the car’s in.”

“It’s not something I would consider as it’s such a big expensive item.”

But does this trend really represent much of a barrier to automotive firms? It is clear thatone of the key lessons manufacturers need to draw from our survey is the need to movethemselves and their dealers further up the information line a potential customer travelsdown before making a decision.

Could it be the case that people may feel more willing to commit to a car online ifthey still had the dealer experience at the end, and a chance to change their mindat that point?

There may be other options for manufacturers to explore. In many cases, the buyingexperience gives an impression of the ownership experience. Delivering cars to the buyerfor test drives, or providing online booking options for customers to find a time to tryout their intended purchase, represent opportunities to engage the customer with thephysical product as well as the online experience.

I wouldwant to

see/inspectthe car

I wouldwant tosee AND

test the car

I prefer todeal faceto face

with dealer

Too muchrisk/

untrust-worthy

Tooexpensive

Other Pictures maybe false

Don’tknow

Perc

enta

ge

0

5

10

15

20

25

30

35


About the BearingPointAutomotive PracticeBearingPoint is a global management and technology

consulting company known for applying deep industry

experience to deliver consistently impressive results for

our clients. More than 17,000 management and technology

consultants collaborate with clients in 60 countries to help

them solve their most pressing challenges from strategy

through to execution.

In the automotive industry, we help companies gain efficiencies and performanceimprovement across the full value chain. We work with most of the world’s major carmanufacturers and some of the leading first-tier suppliers, supporting our clients in theroles of both management and technology consultants. Our capabilities span the entireautomotive value chain. BearingPoint consultants have helped automotive companiesimprove their production and supply chain operations, reduce warranty costs through thedevelopment and implementation of innovative diagnostic-driven early-warning qualitysystems, set up the systems and processes for new production plants, optimize theirspare parts management operations, and develop and execute strategies for effectivemulti-channel customer relationship management.

We have a genuine passion for this work and for the industry as a whole, and it comesthrough in our everyday approach and in the spirit of our people. We’re proud of a numberof attributes that keep us at the top of our field:

• Industry experience: We know our clients’ business problems, the trends that impactthe industry and the processes required to achieve results. Many of our consultantsjoin us with years of experience, working with some of the top companies in theautomotive industry.

• Experienced workforce: We believe we have one of the most experienced workforces inour industry. Our extensive business and technology experience and commitment to ourclients drive our success. Our automotive practice has more than 15 years of experienceserving as business advisors and systems integrators to the industry.

• Enduring relationships with world-class clients: Each year, virtually all of our mostsignificant clients renew their relationship with us by asking us to assist them indeploying innovative solutions to address new business challenges.

• Innovative, results-focused solutions: We combine our industry knowledge withtechnological experience to create solutions that bring real, tangible and innovativebusiness value to our clients.

• Global presence: We support our clients’ operations around the world, seamlesslydelivering the same results-driven solutions wherever they do business. We are constantlyaligning these advantages with the needs of the industry. We know these needs canchange over time, which is why we stay locked into the pulse of the marketplace—standing at the ready to apply our extensive experience on behalf of our clients.


connected customer

Business

automotive industry

car manufacturers

automotive sector

car buyers

way automotive consumers

traditional car

way customers

massproduced car