Direct to Consumer Auto Sales are a Huge CX Opportunity
Our editor-in-chief, Mary Drumond recently became a paying customer of Tesla’s, and as a frequent car-buyer, she is a fan of their direct-to-consumer auto sales. Hearing her rave about it got me wondering: what about Tesla’s experience had the power to make her swoon over its customer-centricity?
I interviewed her on the whole journey to find out.
The Direct-to-Consumer Auto Experience from a CX Pro’s Eyes
Until Tesla, she’d never had a truly “good” customer experience buying a car from a dealership. The scale only ever went up to “tolerable.” The expectation was something like this:
Picture strolling into a dealership, gawping at the shiny new steel carriages, taking in that “new car” smell…
…and then being forced to plead with a sales rep with dollar signs glinting in their eyes and the smell of an extended warranty pitch on their breath. A sales rep who, because of the present shipping crisis and compounding chip shortages, holds all the cards.
Next, hours on end of back-and-forth haggling that can chew through an entire afternoon.
That’s a slightly exaggerated take on the typical experience…but only slightly. Just the thought of it can keep interested car buyers away.
When she first walked into the store, she was mentally prepared to tolerate the typical car-buying rigmarole. But she was pleasantly surprised by what she described as a “high-tech, innovative, seamless and customer-centric” experience that blew her expectations.
Booking the Test Drive
Mary had been considering an EV for some years before she finally crossed the threshold. What she wanted was a luxury car with engine power that would rival her current luxury SUV (that cost $200/mo. to refuel). This made Tesla the only real option.
The first step was to book a test drive online with a simple form. By the time she arrived at the store, the car (a Model 3) was ready and waiting with the test route pre-programmed into the onboard navigation. You’re probably thinking, “hang on, where are the salespeople in this equation?”
That’s part of the magic: there were none.
There were Tesla employees, of course, but they only acted as product liaisons and facilitators. They weren’t there to sell the car. They were there to ensure Mary had the best possible customer experience and nothing else.
And it’s important to note, these employees are salaried, not paid on commission. With no monetary incentive to pressure consumers, employees are free to let the buyer make the final call at their leisure — unheard of in a business known for some intense haggling.
Next came the fun part — putting the rubber to the road. In her words, “the driving experience was phenomenal.” In Mary’s words, the car was like a personal roller coaster. It went from 0 to 60 in about 2.5 seconds, without the usual fanfare or anticipation, which took some getting used to. Combustion engines need to wind up to get to speed; not so for EVs. They just go.
Sealing the Deal
On arriving back at the store, Mary was directed on how to set up her personal Tesla account to place the order and customize her vehicle. This comes with a $200 order fee.
Total transaction time = 15 minutes. 10 minutes later, the sale was approved.
Over the next couple days, Mary got set up on the Tesla app. Here, she could see her vehicle’s expected delivery time and make the down payment. During the wait, she signed a few forms with personal and financial info and got her VIN delivered for insurance. A day before the vehicle arrived, she got a check-in call from an employee to make sure all was well.
When she went into the store again to pick up the car, facilitators were waiting for her to walk her through the technology and features like charging, supercharging, onboard security, etc. In-store onboarding took about 20 minutes, not counting the additional online tutorials that Mary could access on her own time.
Then she made 2 signatures on documents already set up with her information and went on her way in her new electric roller coaster.
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Customer-Centric to the Core
“It was easier to buy a Tesla than to buy an iPhone.”
– Mary Drumond
That’s how Mary summarized her experience. And as a diehard Mac user, she would know.
No haggling, no waiting on the manager to approve a price, no phoning a friend or killing hours in the lobby. Just a stress-free done deal.
Are Teslas cheap? No. But do you know exactly what to expect at every point in the transaction? Absolutely. And that’s what sets it apart.
Through every step of the process, Mary was in constant contact with a rep via text updates — real texts from a person, not bot-generated. Expectations were always crystal clear. And that was a source of both certainty and comfort. That kind of commitment to customer-centricity can be hard to replicate in any industry, much less automotive.
A study released by Capgemini (Apr. 2020) indicates that reluctant auto buyers are most often swayed by two things: an attractive offer or a good customer experience. In Mary’s case, she had been waiting for the right price. But the outstanding customer experience strengthened the relationship significantly, making the follow-through that much smoother.
Direct-to-consumer auto sales should not remain unique to Tesla
Mary’s experience with Tesla went so far beyond expectations that she can’t see herself tolerating the typical dealership ordeal. That’s exactly the sort of Algernon Effect that should signal the alarm for legacy automakers; adapt or fall behind.
The trouble is, they may mistakenly believe they’re already adapting to compete with Tesla by making their own EV lines. But that’s not playing to win the game. That’s playing to make up lost ground. That same route leads straight to any brand’s worst nightmare: commoditization and price wars.
Tesla’s hypermodern, customer-centric experience will only continue to influence the market’s expectations. It sets a new standard for the industry, one that severely impacts how consumers perceive their relationship with other automakers.
Post-COVID changes might be a blessing in disguise
There’s good news for both manufacturers and consumers. As a byproduct of dealing with COVID, most auto brands have already been forced to reckon with moving processes online. That puts direct to consumer auto a tad closer to the norm.
Capgemini’s above study also details changes in buyer mindsets caused by the pandemic. A major driver of change was a desire to control personal hygiene as much as possible by avoiding public transit. Consumers also want contactless options for delivery, negotiation, and purchase. Additionally, hygiene features like purifying air filters and UV sterilizers in the car itself are in-demand.
Any automaker that did its diligence during this period won’t be starting from square 1, but there’s still a lot of ground to cover, and Tesla has a clear headstart. Post-COVID buyers will hold onto those concerns and expect those service offerings to improve over time, not diminish.
Legacy automakers should be wary of missing the turn before they hit the road that leads to slow, painful death. Death by commoditization. While making the shift to online services is crucial, it shouldn’t compromise the customer experiences that give brands their edge. Knowing what makes you worth it to your customers is the distinction between a good brand and a great one.