At the end of the car-buying experience, few people can say they genuinely enjoyed the experience. A recent Planet Money podcast details many of the reasons “Why Buying A Car Is So Awful” (February 12, 2013). The story mostly blames complex franchising laws that protect car dealerships — making it difficult for automakers to get drop dealers that fail to deliver a quality buying experience. If you give this story a listen, you will have a story to your students when you cover channels of distribution.
What can a carmaker do? And will it pay off? For some evidence, see “Continuum Redesigns Audi’s Car Dealership Experience” (Bloomberg Businessweek, February 14, 2013) which points out that Audi’s repurchase rate (the percent of Audi buyers who return to buy another) is 46%, compared to 55% plus for its major German competitors (i.e., BMW and Mercedes Benz). A research study Audi commissioned found that an average dealership could sell as many as 217 additional cars by improving customer service. So Audi hired a service design firm to improve the customer purchase experience.
These two stories could be used to give your students an in-class challenge. Ask them to redesign the new car auto purchasing experience as an exercise. I am going to have students work in 2-3 person teams for 10 minutes and have them generate ideas. These types of critical thinking experiences can be fun — and get them engaged in the material. I think this works well when you cover retailing or channels of distribution. It might also fit with a discussion of product. We start our product chapter by describing how experiences involve a combination of good and service. It provides a nice reminder for customer lifetime value (a concept we introduce in chapter 3).