SAPPHIRENow 2019 - How BMW manages the customer's dealer experience

Profile picture for user pwainewright By Phil Wainewright May 7, 2019
Summary:
BMW has seen a big improvement in customer satisfaction by using Qualtrics to enable a more responsive customer experience - but will it save the industry?

BMW 4Series Convertible

Those detailed customer satisfaction questionnares that many of us never bother to fill in after buying a product or service are often counter-productive, even when customers do make the effort. That's why BMW of North America scrapped them nearly five years ago.

In place of the old 30-question survey, the car manufacturer introduced a new survey with just four questions, plus a free-form final question where the customer could add any other comments. Dealers ask customers to complete the survey after each service visit or vehicle purchase. The new survey format had two significant impacts, says Nicolas Boesch, Customer Experience Manager:

It allows us to find out what is on the customers mind ... [and] immediately increased response rate by 50%.

More importantly, it gives valuable feedback to which BMW and its dealers can immediately respond. The point of the exercise is no longer simply calculating a score. Instead, the focus is on discovering any issues and taking action to put them right. Customers get a response to the form within 24 hours and the goal is to resolve any issues within five days.

The old system had put too much focus on calculating a customer satisfaction index (CSI), says Boesch. The scores were totalled up every few months or at the end of the year, but it was a futile exercise. There was no meaningful way of responding to the scores, apart from pressuring the dealer to somehow improve them. Boesch says:

Looking at the scores was what really poisoned our CSI strategy ... We took that pressure away and put much more focus on the actions the dealer should take.

Taking action is the best way to improve customer satisfaction and BMW impresses on dealers that the likely outcome is more repeat business. Explaining why it matters to follow through proactively is an important part of encouraging the right ethos around the survey process.

Experience management in action

The BMW story highlights how recent SAP acquisition Qualtrics recommends customers use its experience management platform. What matters is building the right business processes around the technology, and then establishing a culture that goes beyond measuring sentiment to actually taking action to deliver a better customer experience. That's the key to standing out from the crowd, says David Mingle, automotive industry lead at Qualtrics:

You have to do a whole lot of things right, but most importantly, you have to create emotion. People will forget what you did but they will never forget how you made them feel.

As well as the individual actions at the dealer level, BMW also aggregates the responses at a regional and global level to find pointers to guide its product management strategy. The Qualtrics platform provides smart analytics to intelligently draw conclusions from analyzing millions of free-form responses, says Boesch. Some manufacturers have started using this data as a predictor of warranty issues, adds Mingle, since it provides an early warning of recurring issues being reported by customers.

Experience data from other sources can also be consolidated into the Qualtrics platform. BMW already feeds in sentiment data from five different social media channels, says Boesch:

It's important to us to have all that data in one system.

BMW is also looking at incorporating sentiment analysis of calls into its customer contact center, and feedback collected from other touchpoints, such as the welcome call made to new car buyers.

My take

Experience management (XM) is one of the big talking points at this year's SAPPHIRENow conference, coming in the wake of the Qualtrics acquisition. Listening to some of the hype, you almost get the impression that XM is the magic potion that will solve all ills in the modern enterprise.

The reality is probably a little more prosaic, in that XM can indeed be gamechanging if you're not already doing it. The older mechanisms for measuring customer satisfaction that BMW did away with reflect the habits of an earlier era. Those were the days when data collection was slow and laborious, and it was much harder to be responsive.

The Qualtrics platform is taking a more joined-up, real-time approach that focuses on customer outcomes rather than simply gathering metrics. That's very much in tune with the trends towards the XaaS Effect and frictionless enterprise that we frequently cover at diginomica. To that extent, it's clearly a good idea, and the BMW use case shows off its potential.

Where the XM message falls short is that sometimes it's not enough simply to improve the experience. Sometimes you need to completely change the business model. Mingle cited the example of ride-sharing companies like Uber and Lyft, which provide a completely different automotive experience that effectively cuts the car makers out of the customer relationship.

However much you improve the experience of owning a BMW, can it ever compete with the convenience of simply calling up a ride whenever you need it? Especially if it's competing with a Tesla ownership experience that allows you to profit from the growth of ridesharing.

In conclusion then, I think Qualtrics has a lot to offer businesses that are starting out on the XM journey. The growing integration with SAP's product portfolio across customer experience and elsewhere also gives SAP a useful boost in the CX/XM realm. But SAP shouldn't overhype it. It's not the final piece of the puzzle, just another step an enterprise must take on the journey into the connected digital era.