Competitive vehicle maintenance cost (including parts and service) helps in creating an overall positive vehicle ownership experience, which is critical in customer retentions and acquisitions. Towards this client wished to assess competitiveness of Periodic Maintenance cost charged by their dealers vs. competition dealers.

Vehicle owners are identified in each market who serviced their vehicles at authorized dealer’s service center from 0 km to 100k Km. Service history of such vehicles are collected and compared with similar data of competition vehicles. Costs of labour, part, fluid and consumables are compiled as listed in the invoice. Subsequently, analyses are conducted to determine price competitiveness at various level.

Vehicle owners who are due for or have recently completed 100k Km service in each market as per nameplates are recruited to participate in the survey. Only owners who purchased vehicles and serviced the vehicle from authorized dealers for all service intervals are included. Service cost estimates from reputed Independent Workshops are also compared with Dealer service costs, this provides insights into reason for some customers going outside dealer service network.

The results provide Client team a holistic view of cost of maintenance from customer’s perspective. The data supports in determining part pricing strategy and variable marketing support to be provided to distributors taking into consideration the competitiveness of parts and labour rates charged by them.

 

Client Testimonial

“TCM data has become a critical part of our market intelligence needs and we have now made it a part of our annual research budget since last 5 years. It is helping us to plan better negotiation strategy with our distributors. And we believe in the longer run this will have a positive impact on our cost of ownership perceptions.”

Aftersales Pricing Director

Competitive vehicle maintenance cost (including parts and service) helps in creating an overall positive vehicle ownership experience, which is critical in customer retentions and acquisitions. Towards this client wished to assess price competitiveness of their spare parts vs. competition.

The methodology adopted for this exercise is mystery shopping wherein transaction price of predetermined list of spare parts across application areas are tracked for Client and Competition models. Dealer, Wholesale and Retail sales channels were covered.

The part list are divided into baskets having similar applications, this ensures that we can obtain prices from the dealership and other trade channels seamlessly. Subsequently, analyses are conducted to determine the price competitiveness. The findings are summarized and shared in PowerPoint file, master database and analyses are shared in MS Excel for future reference. In addition to the report, an Excel based dashboard was also created for easy access and price comparison.

The part list are divided into baskets having similar applications, this ensures that we can obtain prices from the dealership and other trade channels seamlessly. Subsequently, analyses are conducted to determine the price competitiveness.

The findings are summarized and shared in PowerPoint file, master database and analyses are shared in MS Excel for future reference. In addition to the report, an Excel based dashboard was also created for easy access and price comparison.

 

Client Testimonial

“Competitive spare parts pricing data along with evidences are highly actionable. It helps us to negotiate with our distributors and suppliers based on fair and factual data. Also we are able to provide better value for money to our customers.”

Aftersales Pricing Director

Client’s vehicle pricing team needed answers to some critical business questions, they asked us: “What is the trend of our price positioning within each vehicle segment vis-à-vis our competitors? Are our promotion activities competitive enough to support the overall brand and model positioning? ROI and impact of our current promotions and whether to continue/discontinue/modify? Which combination of monetary and non-monetary discount/benefits work for us and competition?

Comparison of pricing and promotion data of client vs. competitor vehicle is presented 24×7 live through ‘Online Vehicle Pricing Tool’ developed by 4SiGHT. The online tool also helps to compare vehicle specifications and simulate scenarios based on transaction price and consumer perceived value (CPV) of each vehicle feature or equipment.

Vehicle pricing data is collected through mystery shopping. Existing owners or residents matching the profile (Nationality, Income, Age, etc.) of the desired vehicle segment are recruited as mystery shoppers. They are trained to maintain consistent negotiation and high level of data quality. Mystery shopper physically visits the showroom to check out offers, negotiate best price and would obtain a quotation, specification, negotiated price (handwritten if not printed) and brochure. For Fleet, we use a company trade license and negotiate for 5 to 10 units to qualify for bulk purchase.

Monthly tracking of vehicle pricing and promotions helped the regional office of our client in UAE to devise a pricing strategy in agreement with their distributors in different markets within Middle East. It also enabled them to synchronize their tactical promotional activities across markets to overcome competitive threat emanating from respective markets.

The online vehicle pricing tool also helps in cohesive teamwork between client’s Head Office in Japan, Regional office in UAE and Distributors across Middle East.

 

Client Testimonial

“This research provides critical inputs for pricing strategy implementation with our distributors across GCC. In addition to MSRP, Cash Discounts and Transaction price of our competitors, it also provides all active promotions in the market along with estimated cash value of these offers on a monthly basis.”

GM – Sales & Marketing, Japanese OEM

The Client were planning on entering the highly competitive LCV category in the region with KSA being their primary focus. The KSA market is dominated by offerings from the major Japanese OEMs. The client’s offering was feature-loaded but did not originate from the known countries for LCVs posing a unique challenge to break into this segment. It was also a less established brand but fast growing in the passenger segment. The client needed to develop the offer to Go to Market, tweak the product to local tastes to the extent possible, all this keeping in mind the country of origin challenge.

We selected Buraidah as the location as this is where pickups are highly entrenched into the local culture and often the primary vehicle for daily work-related activities.

A static clinic was conducted, where we tested the client vehicle against  three main competitors at a venue – the market leader and two less established models. This was a quantitative exercise and followed by FGDs among acceptors and rejectors of the vehicle to understand what’s working or not working in its favor. FGDs were done in the presence of the vehicles for easier identification of the product features that were being discussed. This was followed by a Dynamic Test of the vehicle on a pre-approved route to assess the vehicle performance under different driving conditions such as initial pick up, acceleration, deceleration, braking, turnaround and off road.

The vehicle performed on par with market leader on exteriors and interiors and was superior to the other, less established vehicle brands. In terms of specifications, while the vehicle torque and horsepower were comparable to the market leader and superior to other vehicles, the small turbo engine failed to enthuse audiences and it lacked credibility on its ability to perform better than competitors. Spares was a barrier given it was new entrant from a less established brand. The drive test appeared to have further strengthened the associations with weak performance. The vehicles luxury features and aggressive styling did find broad appeal and differentiated it from others

Our recommendation was despite the higher specs, to peg the product vs the # 2 brand in terms of product and price positioning, rather than take on the market leader head on. Offering a larger engine would needed as the cost of entry into the category. Managing the availability of spares would be a challenge and offering longer warranty periods would alleviate this concern and allow for price premium to lesser established brands. The product will continue the growth momentum for the OEM with the expansion into a new segment.

 

Client Testimonial

“The team was professional in their conduct and the insights were thought provoking and changed our views in the offering and go to market strategy”

“Head of Product Planning”

A superior offering not backed by sound customer experience management of the sales and after sales process results in negative WOM and poor translation of brand consideration into purchase in automotive. The core of the issue for our client lay in dealers reporting high experience scores through internal surveys, despite negative WOM, indicating the scores didn’t reflect on ground reality. The client’s ambitious goal was  to be among the top 2 brands in terms of experience in every market over time. Creating an actionable programme that would drive change at the grass root level would support this goal.

An audit of the customer journey was conducted to review completeness of areas of measurement. Competitive survey results helped prioritize these across markets. Feedback interviews were undertaken through CATI with emphasis on obtaining the customer perspective along with managing the relationship. Unreachable customers were pushed online surveys as a value add to cover more customers and widen our complaint resolution process. Significant emphasis was placed on getting closer to the event by narrowing the gap between receipt of database and the interview.

Trainings were imparted to dealers and we participated in dealer events to create relevance of using the tool and highlight regular updates. Closing the loop services were provided to facilitate actionability and visibility at senior levels. Advanced quantitative tools were used to priorities areas of improvement, i.e. those with least effort/cost and maximum impact on experience. All information was provided via a portal for ease of access across dealers and their frontline staff. Dealer feedback on the tool and website were regularly obtained and incorporated.

As the experience improved, erstwhile customer delights became hygiene requirements, and these were identified for maintenance and new emerging delights were identified for prioritization. The measurement areas were thereby constantly updated to reflect evolving customer expectations.

The research helped gain the dealers’ trust which facilitated speedy implementation of the results and drove change in behavior of frontline staff. The metrics became a buzz word on the shop floor.

The client who was languishing at #4 in most markets over 3 years moved to #1 or #2 in all markets. They became the benchmark for customer experience in some markets. They lower health funnel scores improved and they dramatically improved sales over time.