The agency model: What’s the key to success?

The agency model: What’s the key to success?

22nd August 2023 · Arvato · Blog, News

Colin Gittens, our Director of Operations, spoke alongside Jason Craker from changemaker to AM Online about how the agency model is inevitable in the automotive industry. They discussed how it’s not a matter of if traditional OEMs join in, but when; why we’re starting to see this shift now and what the key ingredients for success are.

For OEMs, the primary benefit of the agency model is that it provides an opportunity to better understand and directly engage with their drivers. The OEM becomes the first point of contact, from handling the highly regulated financing process to ongoing ownership queries. Meanwhile, the dealership takes a more focused role in several critical customer experiences, such as handover and test drives.

In this piece, Colin and Jason explore the potential benefits of this switch in focus:

If OEMs and their retail partners can effectively capitalise on the opportunity of the agency model, it will be a major step towards what we believe is the future of the automotive retail ecosystem – creating lasting, ‘sticky’ customer relationships, with multiple exchanges of value.

They also explain the need for manufacturers and their retail partners to be able to control, extract data from, and then re-deliver value across every customer touchpoint, with those that will get ahead being able to:

Deliver true multi-channel service across the customer journey, build unique 360-degree view of customers and offer a personalised service, informed by a mutually accessible picture of the driver.

This personalisation element is key, with our recent research finding that more than two fifths (42%) of drivers would look to change the brand they bought from if they didn’t receive a tailored service.

The transition to the agency model is a major pivot for the sector; this transformation requires different skill sets from the existing operational mindset needed in many organisations.

You can read Colin and Jason’s full article for AM Online here and watch more of our thoughts on the path to successful agency models in a short animation we’ve produced here.

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