18 Nov 14

“We need to show our customers we love them”

Turn your customers into fans, was the message of Jean-Laurent Paris at the Remarketing Forum in Hamburg. According to the DEKRA Automotive MD, the Remarketing sector faces a generational challenge, requiring a shift in attitude: “We need to show our customers we love them”.

Baby Boomers

While Baby Boomers (born 1946-'64) and Generation X'ers (born 1975-'79) still dominate the wider economy and the automotive market, we're already experiencing a handover to Generation Y (born 1980-'95). They will soon dominate. By 2015, Generation Y will represent 50% of the workforce worldwide, and 40% in Europe.

“One explanation for the name of this generation is that they always ask Why. They question everything”. The generational shift poses a particular challenge to the Remarketing sector, says Mr. Paris: “Globally, the average age of a new car buyer is 52 years. Generation Y buys second-hand cars”. But the newest generation will not only increasingly become the industry's buyers – already are also its sellers.

Social networks

The Internet has become the main tool for today's consumers, which means they have more information at their disposal than before, and more power, hence user-driven mobility solutions like Uber, Bla Bla Car, etcetera. Higher consumer expectations and fiercer supplier competition implies that a multi-channel approach is now key. Dealerships now compete with social networks, third-party websites and peer groups to provide information on their products. “People buying a car used to visit a dealership 5, 6 times before buying. That average has dropped to two. The prospective buyers have collected the information they need online. That only increases the importance of the first contact between dealer and prospective customer”.

But the industry is lagging behind. Remarketing needs to get with the times. “Having a used car programme is the most basic and natural thing an OEM can do; it creates the basis for value creation. If treated right, used car customers will be back in a couple of years for another vehicle. And yet, there are several markets where this option has not yet been developed”.

Vehicle maintenance

Mr. Paris mentions the Dacia Picnic – an annual event organised by the manufacturer for its clients: “It's great, because it makes people feel they are part of a community. This is the Starbucks approach: turn your customers into fans. Enable interaction, provide rewards. And that is exactly what appeals to Generation Y”.

Which means that selling a car is only part of the job: “Vehicle maintenance is an excellent leverage tool to maintain a relationship, through text messages, by sending out videos, etc.”

That new attitude also extends to the dealership's own salespeople: “Generation-Y salespeople will be less bonus-oriented. They want to be happy to work for you”.

Jean-Laurent Paris has been Managing Director of DEKRA Automotive Solutions since January 2013. This DEKRA unit provides Used Vehicle Management services to OEMs, Dealer Networks, rental and leasing companies.

Authored by: Frank Jacobs