CX in The Automotive Industry

INDUSTRY SNAPSHOT
CX in the Automotive
Industry
THE CURRENT STATE OF CUSTOMER EXPERIENCE FOR
AUTO DEALERS
Isabelle Zdatny, CCXP

XM Catalyst
Bruce Temkin, CCXP

Head of the Qualtrics XM Institute
Moira Dorsey
XM Catalyst
January 2020

XM Institute INDUSTRY SNAPSHOT qualtrics.com/XM-Institute
EXECUTIVE SUMMARY
To evaluate the current state of customer experience (CX), the XM Institute surveyed
10,000 U.S. consumers about their experiences with 294 companies across 20 different
industries. In this Industry Snapshot, we analyze the quality of customers’ experiences
with the automotive industry.
UNDERSTANDING THE STATE OF CX IN THE AUTOMOTIVE INDUSTRY

How does the quality of customer experience differ across industries? To address this
question, the XM Institute conducted a large-scale benchmark study where we asked 10,000
U.S. consumers to rate their recent interactions with 294 organizations across 20 industries.1
In this Industry Snapshot, we examine the state of CX in the automotive industry. To develop
this Industry Snapshot, we:
§ Found the average XMI Customer Ratings - Overall for each industry. To generate
the average CX rating for each industry, we asked respondents to evaluate their
experiences with companies over the past 90 days.2 These questions – rated on a
seven-point scale – covered the three components of an experience: success (were
they able to accomplish their goals?), effort (how easy or difficult was it for them to
accomplish their goals?), and emotion (how did the interaction make them feel?).3 We
found the XMI Customer Rating - Overall for each of the 294 companies by averaging
the ratings for these three experience components. We then calculated the average
Customer Rating for each industry by averaging the Customer Ratings of the
companies within each industry.4
§ Calculated NPS. We asked respondents who had interacted with a company to
answer the standard Net Promoter® Score (NPS®) question: How likely are you to
recommend <company> to friends and colleagues? Consumers selected a response
from 0 (not at all likely) to 10 (extremely likely). We then determined the percentages
of each firm’s respondents who were promoters (selected 9 or 10), passives (selected
7 or 8), or detractors (selected between 0 and 6). We then calculated the NPS for each
1
Data comes from the Qualtrics XM Institute Q2 2019 Consumer Benchmark Survey – an online study of 10,000 U.S.
consumers completed during May 2019. Survey respondents were representative of the U.S. Census based on quotas
for age, income, ethnicity, and geographic region.
2
See the XM Institute report, “2019 XMI Customer Ratings – Overall,” (September 2019). The XMI Customer Ratings
– Overall are a continuation of the Temkin Experience Ratings. The Ratings were renamed after Qualtrics purchased
Temkin Group in October 2018.
3
We developed ratings for each of the three components of an experience – success, effort, and emotion – by
subtracting the percentage of consumers who rated a company poorly from the percentage of consumers who rated
it highly.
4
Although consumers rated a number of companies for our survey, we only analyzed the ones that received at least
100 consumer responses. Ultimately, we examined data from 294 companies across 20 industries. For this Industry
Snapshot, data on auto dealers comes from over 4,000 respondents evaluating their experiences with 19 large auto
dealers.
Copyright © 2020 Qualtrics®. All rights reserved. Page 2

company by subtracting its percentage of detractors from its percentage of

promoters.5
§ Determined likelihood to repurchase and trust. We also asked consumers how
likely they are to consider purchasing more products or services from the companies
they had interacted with on a scale of 1 (extremely unlikely) to 7 (extremely likely). We
also asked how likely they are to trust that the company would take care of their needs
on a scale from 1 (do not trust at all) to 7 (completely trust).
§ Established the frequency and effects of poor experiences. We asked respondents
to identify which organizations they recently had a poor experience with and then
asked, “Since the time that you had a bad experience with these companies, how have
you changed the amount of money you spend with them?” They could answer that
their spending completely stopped, it decreased, it didn’t change, it increased, or that
they haven’t spent any money with that company.
§ Identified the most broken customer journeys. To better understand which types
of interactions are most likely to affect the customer’s perception of an organization,
we asked respondents to identify which journey within a certain industry needs the
most improvement. We also looked at the correlation between which journeys a
customer identified as broken and how likely that customer was to recommend the
company.
AUTO DEALERS DELIVER AVERAGE CX

When we looked at the current state of customer experience in the automotive industry and
how it compared to the broader CX landscape, we found that auto dealers:
§ Receive average Customer Ratings scores. Auto dealers received an average XMI
Customer Rating – Overall score of 64% and tied for 9th place out of 20 industries (see
Figure 1). When we looked at how auto dealers performed across the three
components of an experience – success, effort, and emotion – compared to the
average of all 20 industries, we found that, although they are slightly behind the overall
average for both success and effort, they are actually ahead for emotion. This is good
news for auto dealers as, of the three components, emotion is most strongly
correlated with customer loyalty and tends to have the lowest scores.
§ Enjoy an above-average industry NPS. We found a strong connection between
customers’ experiences and their likelihood to recommend a company. Companies
that significantly outperformed their industry’s average XMI Customer Ratings also
earned a significantly higher-than-average NPS (see Figure 2). Compared to the 20-
industry average, auto dealers have a slightly higher percentage of consumers who
say that they are likely to recommend the company. To boost their number of
promoters, auto dealers should focus on the emotion component of customer
experiences as, of the three elements, it most significantly impacts likelihood to
recommend. An impressive 90% of customers who gave auto dealers a high score in
emotion say that they are likely to recommend the company.
§ Have enthusiastic older customers. Customer experience is strongly related to a
consumer’s likelihood to rebuy from a company, with a correlation coefficient of 0.85
5
See the XM Institute report, “2019 XMI Customer Ratings – Consumer NPS,” (October 2019).

(see Figure 3). While the percentage of automotive customers who say they are likely
to repurchase from the company is almost identical to the 20-industry average, auto
dealers perform significantly better than the overall average amongst customers who
are older than 65.
§ Earn the trust of consumers of all ages. While a customer’s experience with a
company does impact their likelihood to trust that company, the correlation is slightly
weaker than it is for their likelihood to recommend or repurchase (see Figure 4). The
percentage of customers who say they trust auto dealers to take care of their needs
is three percentage-points higher than the 20-industry average. Across all age groups,
automotive customers are more likely to trust an auto dealership compared to the
overall average, with the exception of the younger age group where the two groups
are tied.
§ Frequently deliver poor experiences. Although auto dealers perform slightly better
than the cross-industry average on the other CX dimensions we evaluated, they
deliver the second highest percentage of poor experiences, with 10% of customers
who interacted with an auto dealer over the previous six months saying that they had
a bad experience (see Figure 5). Of those who had a bad experience, 43% report either
decreasing or stopping their spending after that poor interaction. The age group that
is most likely to report having a bad experience with an auto dealer are 25- to 34-year-
olds.
§ Struggle during car service journeys. Thirteen percent of customers identified
“getting service on a car” as in need of significant improvement (see Figure 6).
Customers who selected this journey as broken had an average NPS that was 31
points lower than the industry average. And while only 4% of customers selected
“returning a car” as the most in need of improvement, those who did gave auto dealers
an average NPS that was 39 points lower than the industry’s average.
PROPEL YOUR EXPERIENCE MANAGEMENT TO THE NEXT LEVEL
Although the automotive industry overall receives average customer experience ratings,
there is a significant difference between the auto dealers who do CX well and those who do it
poorly. Additionally, auto dealers frequently struggle to deliver consistent experiences
across their networks of independent franchisees, some of which own many brands or belong
to large dealer groups. To overcome these challenges and remain competitive within the
industry, auto dealers must establish Experience Management (XM) as an organizational
discipline by mastering six XM Competencies and 20 XM Skills (see Figure 7).6 These
capabilities will help auto dealers succeed in the new business environment by allowing them
to:
§ Continuously learn. Auto dealers with strong XM Competencies and Skills will be able
to continuously collect and analyze feedback and behavioral signals from people who
interact with them – gathering the information necessary for understanding the
experiences, perceptions, and attitudes of their customers, employees, and
prospects. This requires them to shift away from their traditional collection practices,
which incentivize employees to game the system and pressure customers for good
6
See the Qualtrics XM Institute report, “Operationalizing XM” (July 2019).

scores rather than useful insights. Instead, these new XM capabilities will enable auto
dealers to first identify which moments most affect the loyalty of key customer
segments – such as returning or getting service done on a car – and then establish
listening posts that collect feedback and signals about the quality of those
interactions. For instance, an auto dealer may find that younger customers tend to
give it lower satisfaction scores after getting their car serviced because they don’t
know what to expect during the process and don’t understand a number of charges
on their bill.
§ Propagate insights. Once auto dealers understand how the people who interact with
them think, behave, and feel, they then need to get those insights into the hands of
the people across their ecosystems who are best equipped to act on that information.
For example, auto dealers with strong XM skills will not only recognize that, say,
getting a car serviced is a key moment of truth for customers, they will also be able to
quickly share qualitative and quantitative feedback about those interactions with the
people who are directly and indirectly responsible for delivering them, such as
mechanics and general managers. Furthermore, they will tailor both the content and
the form of these insights for each role, with customized alerts triggered when certain
criteria – such as a low NPS or CSAT score– are met.
§ Rapidly adapt. Distributing customer insights in the right form to the right people
across the organization will allow auto dealers to act quickly on the intelligence they’ve
collected and shared, thus enabling them to rapidly create or improve experiences in
a way that addresses people’s changing needs and expectations. For example, auto
dealers may institute weekly huddles where frontline teams discuss customers’
feedback about getting their car serviced and brainstorm ways to improve this
journey. After implementing their improvement ideas, the teams could ensure the
changes are having the intended effect by continuing to monitor customer feedback
and tweaking the experience until they achieve the desired result.

The State of CX in the Automotive Industry
The 2019 XMI Experience Ratings - Overall ranks the customer experience of 294
companies across 20 industries and are a continuation of the Temkin Experience
Ratings, which have been published annually since 2010. Each company’s Rating is
calculated by averaging their score across success, effort, and emotion.
2019 XMI Customer Ratings: Changes in XMI Customer Ratings :

Industry Averages 2016 – 2019
Groceries 75% Auto Dealers Overall Averge
Retailers 72%
Fast Food 70%
69%
Banks 70% 66% 64%
Parcel Services 69% 57%
68% 68%
Streaming Media 69% 64%
60%
Credit Cards 67%
Hotels 65%
2016 2017 2018 2019
Auto Dealers 64%
Insurance 64% Success, Effort, Emotion Ratings
Investment Firms 63%
Auto Dealers Overall Average
TV & Appliances 63%
Airlines 63% 67% 69% 67% 68%
58% 56%
Wireless 63%
Software F irms 61%
Utilities 61%
Car Rental 61%
Computers & Tablets 60%
Health Insurance 55%
TV/Internet Service Providers 51% Success Effort Emotion
XMI Customer Ratings Across Age Groups:

Auto Dealers vs. 20-Industry Average
Auto Dealers Average Overall Average
79% 76%
70% 68% 70% 70%
60% 62%
49% 50% 54% 57%
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+
Base: 10,000 U.S. consumers, 294 companies, 20 industries

Source: Qualtrics XM Institute Q2 U.S. Consumer Benchmark Study
Copyright ©2020 Qualtrics®. All rights reserved.
Figure 1

Connection between CX and Likelihood to Recommend

in the Automotive Industry
ALL INDUSTRIES
Correlation between NPS* versus Industry Average based
CX and Recommend on XMI Experience Ratings
Likely To
Pearson Recommend 2019 XMI Ratings
correlation = 40 compared with their
0.83 30 industry averages 12.2
20
2019 XMI 10 Bottom 4th 0.5 3.7
Experience Quintile Quintile
0
Ratings
-30 -20 -10 -10 0 10 20 2nd Top
-4.1 Quintile Quintile
-20
-30 Average NPS minus
-14.8 industry average NPS
-40
-50
AUTO DEALERS
Distribution of NPS* Likelihood to Recommend
Auto Dealers vs. 20-Industry Average Based on How Auto Dealer Customers Rate
Success, Effort, and Emotion
Auto Dealers Overall Average
Low Rating Neutral Rating High Rating
58% 54%
Success Effort Emotion
20% 23% 22% 23% 85% 86% 90%
38% 36% 41%

(1 - 6) (7 & 8) (9 & 10) 20% 15% 17%
Detractors Passives Promoters
Percentage Likely to Recommend** across age groups:

Auto Dealer Average Overall Average
75% 79%
70% 73% 68% 73%
66% 64% 68% 66%
62% 60%
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+
*Net Promoter Score is a registered trademark of Bain & Company, Satmetrix Systems, and Fred Reichheld.
**These numbers represent the percentage of consumers that selected 8, 9, or 10 on a scale between 0 (“not
at at all likely”) to 10 (“extremely likely”).

Figure 2

Connection between CX and Rebuy

ALL INDUSTRIES
Correlation between Rebuy Versus Industry Average Based
CX and Rebuy on XMI Experience Ratings
Likely To
Pearson Rebuy 2019 XMI Ratings
correlation = compared with their
30
0.85 industry averages
6.8
20
10 2019 XMI 2.3
Experience Bottom 4th
0 Ratings Quintile Quintile
-50 -40 -30 -20 -10 0 10 20
-10 2nd Top
-20 -2.7
-30 Average likelihood to rebuy

-8.6 minus industry average of
-40
likelihood to rebuy
-50
AUTO DEALERS
Distribution of Likelihood to Rebuy Likelihood to Rebuy
Auto Dealers Overall Average Low Rating Neutral Rating High Rating
68% 67%
25% 27% 82% 83% 86%

7% 6%
35% 33% 40%
19% 17% 17%
(1 - 3) (4 & 5) (6 & 7)
Unlikely Neutral Likely
Percentage Likely to Rebuy* across age groups:

76%
67% 67% 72% 69% 71% 68% 71%
59% 61% 64% 64%
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+
*These numbers represent the percentage of consumers that selected 6 or 7 on a scale
between 1 (“extremely unlikely”) to 7 (“very likely”).

Figure 3

Connection between CX and Trust

ALL INDUSTRIES
Correlation between Trust Versus Industry Average Based
CX and Trust on XMI Experience Ratings
Likely To
Trust 2019 XMI Ratings
Pearson compared with their
correlation = 30
industry averages 6.4
0.79 20
10 2019 XMI 2.1

Experience Bottom 4th 0.1
0 Ratings Quintile Quintile
-50 -40 -30 -20 -10 0 10 20
-10 2nd Top
-20
-30 Average likelihood to trust

-7.0 minus industry average of
-40
likelihood to trust
-50
AUTO DEALERS
Distribution of Likelihood to Trust Likelihood to Trust
Auto Dealers Overall Average Low Rating Neutral Rating High Rating
64% 61%
29% 32% 77% 79% 83%
7% 7%
33% 34%
22% 20%28% 14%
(1 - 3) (4 & 5) (6 & 7)
Do not trust Neutral Trust
Percentage Likely to Trust* across age groups:

72%
61% 64% 64% 61% 63% 61% 66%
59% 59% 59% 59%
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+
*These numbers represent the percentage of consumers that selected 6 or 7 on a scale
between 1 (“extremely unlikely”) to 7 (“very likely”).

Figure 4

Cost of Bad CX in the Automotive Industry
Bad Experiences: Decreased or Stopped Spending:

Percentage of consumers who had a Percentage of consumers who
bad experience with a company in these decreased or stopped their
industries within the previous 6 months spending after the bad experience
TV/Internet Service Providers 17% 38%
Auto Dealers 10% 43%
Utilities 9% 21%
Airlines 9% 51%
Health Insurance 9% 21%
Wireless 8% 34%
Car Rental 8% 53%
Computers & Tablets 8% 52%
Fast Food 7% 67%
Parcel Services 7% 35%
Insurance 7% 40%
Retailers 7% 59%
Banks 6% 42%
TV & Appliances 5% 43%
Hotels 5% 53%
Credit Cards 5% 60%
Investment Firms 5% 48%
Groceries 4% 51%
Streaming Media 4% 38%
Software F irms 3% 41%
Percentage of bad experiences across age groups:

14%
12%
11%
9% 9% 9%
8% 8%
7% 6%
5% 5%
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+

Figure 5

Journeys That Matter in the Automotive Industry
Journeys that Need Improvement: Journey NPS Versus

Percentage of consumers who Industry NPS
say that customer journey needs (point difference)
significant improvement
None of these need to be
48% -5
significantly improved
Getting service on a car 13% -31
Resolving customer service
9% -5
issues
Scheduling service on a car 9% -22
Purchasing a car 7% -16
Financing a car 7% -14

Finding answers to basic
6% -27
questions
Finding a convenient location 6% 2
Selecting the car that best meets
6% -16
your needs
Parking 5% 21
Returning a car 4% -39

Receiving status updates about a
3% -14
new car purchase
Using online self-service 3% 13
Starting to use a car 1% -20
Receiving a car 1% -22
Percentage of Consumers who Selected Top 5 Journeys as Problematic:

Across Age Groups (could select two journeys)
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+
Getting service on a car 14% 16% 18% 20% 19% 12%
Resolving customer service
issues 6% 9% 11% 10% 20% 17%
Scheduling service on a car 8% 12% 10% 15% 12% 10%

Purchasing a car 10% 8% 10% 9% 10% 12%
Financing a car 9% 9% 10% 11% 7% 6%

Figure 6

Figure 7

CX in The Automotive Industry

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INDUSTRY SNAPSHOT

Isabelle Zdatny, CCXP

Bruce Temkin, CCXP

UNDERSTANDING THE STATE OF CX IN THE AUTOMOTIVE INDUSTRY

Copyright © 2020 Qualtrics®. All rights reserved. Page 2

company by subtracting its percentage of detractors from its percentage of

AUTO DEALERS DELIVER AVERAGE CX

Copyright © 2020 Qualtrics®. All rights reserved. Page 3

PROPEL YOUR EXPERIENCE MANAGEMENT TO THE NEXT LEVEL

Copyright © 2020 Qualtrics®. All rights reserved. Page 4

Copyright © 2020 Qualtrics®. All rights reserved. Page 5

The State of CX in the Automotive Industry

2019 XMI Customer Ratings: Changes in XMI Customer Ratings :

XMI Customer Ratings Across Age Groups:

Base: 10,000 U.S. consumers, 294 companies, 20 industries

Copyright © 2020 Qualtrics®. All rights reserved. Page 6

Connection between CX and Likelihood to Recommend

20% 23% 22% 23% 85% 86% 90%

38% 36% 41%

Percentage Likely to Recommend** across age groups:

Base: 10,000 U.S. consumers, 294 companies, 20 industries

Copyright © 2020 Qualtrics®. All rights reserved. Page 7

Connection between CX and Rebuy

-30 Average likelihood to rebuy

25% 27% 82% 83% 86%

Percentage Likely to Rebuy* across age groups:

Base: 10,000 U.S. consumers, 294 companies, 20 industries

Copyright © 2020 Qualtrics®. All rights reserved. Page 8

Connection between CX and Trust

10 2019 XMI 2.1

-30 Average likelihood to trust

Percentage Likely to Trust* across age groups:

Base: 10,000 U.S. consumers, 294 companies, 20 industries

Copyright © 2020 Qualtrics®. All rights reserved. Page 9

Cost of Bad CX in the Automotive Industry

Bad Experiences: Decreased or Stopped Spending:

Percentage of bad experiences across age groups:

Base: 10,000 U.S. consumers, 294 companies, 20 industries

Copyright © 2020 Qualtrics®. All rights reserved. Page 10

Journeys That Matter in the Automotive Industry

Journeys that Need Improvement: Journey NPS Versus

Purchasing a car 7% -16

Financing a car 7% -14

Returning a car 4% -39

Starting to use a car 1% -20

Receiving a car 1% -22

Percentage of Consumers who Selected Top 5 Journeys as Problematic:

Scheduling service on a car 8% 12% 10% 15% 12% 10%

Financing a car 9% 9% 10% 11% 7% 6%

Base: 10,000 U.S. consumers, 294 companies, 20 industries

Copyright © 2020 Qualtrics®. All rights reserved. Page 11

Copyright © 2020 Qualtrics®. All rights reserved. Page 12

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