From Touchpoints to Trust: The Impact of Service Design on Customer Loyalty for Automotive Brands | by Chu-Yi Vuong | IBM Design | Feb, 2025 | Medium

From Touchpoints to Trust: The Impact of Service Design on Customer Loyalty for Automotive Brands

Chu-Yi Vuong

Published in

IBM Design

11 min read

3 days ago

Authors

Oliver Ristau, Chu-Yi Vuong

We are Chu-Yi and Oliver, two designers from IBM iX Germany. In this article, we would like to outline our perspective on service design and its impact on loyalty. We strongly believe that seamless experiences across products and services matter, and can build trust within an ever-changing world. We hope that this will inspire like-minded designers and automotive strategists.

Services are everywhere

We often are not aware that we are designing a service. A service can be an instruction that guides you, an app that keeps you informed, or a real person that helps you to navigate around. Services are, essentially, a complex set of touchpoints and actors that help you achieve a certain goal. There is no product that works without an associated service, especially in the automotive industry. If you decide to buy a car (the product), you will need a place to buy it (sales services), a place to register and insure it (tax and insurance services), and a place to maintain it (workshop services), amongst many more services. As products become more connected and software-defined, it is even more important to have everything work seamlessly together. This is why services need to be well-designed, and why it is important to understand the interconnections of different products, services and actors.

Graphic 1: Overview of key automotive actors and touchpoints

Good service design is good customer loyalty

The automotive industry is currently experiencing three simultaneous transformations: the development of software-defined electric vehicles, the shift to a more direct (agency) sales model and the emergence of new business models through digital services. European automotive brands also face growing competition from new Chinese brands.

How can European automotive brands retain their customers and continue to attract new ones? Brands are dealing with a new generation of customers and have to find a way to meet the new customers’ needs. This challenge is prevalent in the hyper-competitive market in which new product and service experiences appear faster than ever.

We are convinced that human-centered product and service experiences are key to brands’ success. Brands should find ways to include feedback from all actors as early as possible to nurture their customer’s loyalty and to build a sustainable internal organization. Enhancing the customer-centric experiences with the desired amount and ethical usage of emerging technology, such as electrification, autonomous driving, connectivity, artificial intelligence (AI & Gen-AI), and cybersecurity will give brands the competitive advantage to differentiate themselves. It can also help to attract new customers and to strengthen their brand loyalty.

Loyalty is more than collecting points

Building loyalty has become challenging due to societal changes, digital transformation, and new service expectations. Based on our experiences, the meaning behind loyalty has transformed over the last few years.

There are several different types of loyalty programs. The graphic below lists some of them and provides examples of each:

Graphic 2: Examples of loyalty types (Camp, 2024; Sobhi, 2024)

There are also hybrid loyalty programs in which brands combine different types of loyalty programs. Whatever approach you decide to take on, we always recommend considering how programs are integrated and how these interact with different touchpoints.

But does a loyalty program really make good customer loyalty by itself? We believe that customer loyalty is shaped by experience and trust and is not simply defined by a loyalty program itself anymore.

Loyalty is about creating seamless experiences for all actors

Automotive brands provide various products and services to a broad spectrum of customers. These products and services accompany different types of customers in different phases of their life—each person is unique and different.

Every customer experiences a different set of needs and emotional responses given their unique outlook and phase in life. Automotive brands provide various products and services to a broad spectrum of customers, each accompanying them through different phases of their lives. We consider loyalty as cumulative emotions towards a service, product, or entity. Loyal customers will buy more from the same brand and disloyal customers will buy less. A single negative experience with a brand does not always affect a person's loyalty. It depends on how the brand manages the situation. Understanding the complexity of these emotional responses is crucial.

ExampleRecently, one of our team members experienced a flat tire. The dealership's support hotline provided prompt assistance in identifying the optimal solution to this issue. They towed the vehicle to their repair facility and replaced the tires within 24 hours. Additionally, they offered a rental car or free public transportation tickets. This brand demonstrated an understanding of their customer’s unexpected issue and ensured continued access to mobility options. Because of their integrated system, they already knew our team member had an all-in-service contract with them. Claim invoicing and payment were, therefore, all processed by the dealer. When they purchase their next car, those kinds of services will have an impact on their decision. So, depending on the services that are provided and communicated to you, you will either have a stressless or stressful experience with a flat tire.

Nobody is perfect. Considering and acknowledging the various roles of different actors that are needed to make a product or service work is important. In the end, we are all humans. We should remind ourselves that when we talk about actors and users, we talk about humans too. Recognizing the human aspect is important for designing experiences and mitigating unexpected outcomes, such as maintenance issues. Understanding stories, emotions, and challenges helps create better products and services, fostering seamless experiences and customer loyalty.

Graphic 3: Simplified example and overview of a consumer’s automotive experience

With service design, we have a mindset and a set of tools that provide transparency with regard to our products and services. For instance, the service blueprint visualizes the customer’s journey and connects these with interactions on the frontstage and backstage levels as well as with supporting processes.

Seven dimensions of building automotive loyalty

We think that the following seven dimensions are essential to design a good customer loyalty experience:

Human FactorPeople are social beings and strive for interaction, connection, trust, and emotions. And depending on life situations and societal influences, we have different needs that can also change over time. This also affects mobility choices. Decisions are made based on individual factors and behaviors are formed. Everyone thinks, feels, speaks, and does things differently. Empathy maps and journey mapping are examples of how these individual factors can be visualized and put into context. Recognizing that every touchpoint involves human interaction is crucial. When these interactions are positive and respectful, they contribute to a stronger sense of loyalty. It is through these interconnected relationships that a brand can create a supportive and loyal community of all actors.
Brand ExperienceA unique and positive brand image can enhance customer retention and attract new customers. However, it is important that the image of the brand is reflected through its products and services. Making sure that the brand and its values are represented in each physical and digital touchpoint can be helpful.
Product ExperienceThe product experience consists of the quality of the built product, how long the product lasts, and its overall look and feel. Additionally, it considers the overall experience, including the level of personalization, infotainment system, safety features, companion applications, and mobility aspects such as range, engine or battery type, and power.
Service ExperienceServices bring products to life–They can be physical, digital, or both (phygital). Starting with the first exploration, a consumer might visit a car dealer to test cars and get a better impression of the products. After that, they might continue their exploration online through the car configurator. Throughout the whole customer journey, different services across different touchpoints address different needs of different actors. If done right, services can be the indicator that shapes customers’ connection with the brand, which leads to loyalty. Therefore, it is helpful to understand the interconnections of services with the product. However, other factors such as work culture play a role in service delivery, too. Employees who feel empowered and respected are more likely to show their satisfaction in interactions with consumers and therefore shape customers’ experience. This can be part of someone’s journey that, in the end, leads to loyalty.
EcosystemThis dimension looks at how well products and services integrate into existing ecosystems from consumers and how these are connected to other systems. To achieve this, systemic thinking methods, such as the ecosystem map and the causal loop, help to understand where products and services are positioned and how these are intertwined with different systems. Android Auto and Apple CarPlay are good examples of how your vehicle extends to other touchpoints of the user that are outside of your own system.
Environmental ImpactE-mobility is everywhere. Customers are also more aware of the materials used. Volvo was one of the first to offer recycled plastics and leather-free interior options. Each brand has their unique approach. Based on our experience, consumers nowadays are conscious about their environmental impact—and that includes the CO2 emissions of a car, its repairability, reliability, and longevity. It is recommended that brands prioritize circularity actions to meet peoples’ and the planet’s needs. Making the Sustainable Development Goals by the United Nations part of the design process is one example of this.
Buying BehaviorCustomers want to feel valued. They want their needs to be taken care of. Buying behavior is primarily influenced by aspects such as sales channels, financing options and leasing terms. There are, of course, more differentiators. Provided services, maintenance costs, taxes, and insurance premiums come to mind as examples.

By understanding the relation between and importance of these dimensions, automotive brands can develop comprehensive loyalty strategies that address the diverse needs of their actors. By focusing on both tangible factors, such as product quality, and intangible factors, such as brand experience and services, brands can build strong and long-lasting customer relationships that result in loyalty. All dimensions play a role and should be considered together rather than as siloed steps to follow. You can have the best sales team in the world, but when products and services do not act together and meet customer expectations, loyalty fades and we have unsatisfied customers.

Best practices help to take on a new perspective

An example from the hospitality industryThere are many great examples that show how customer loyalty can be shaped successfully, inside and outside of the automotive industry.

We think the Dutch roastery and café Single Estate Coffee is one of the great examples outside of the automotive field. Single Estate Coffee does not only serve coffee—they make sure that you get the most pleasant experience with it, too. And this is only possible through the great orchestration of their service. For example, the well-trained staff asks you about your type of coffee machine to provide you with the perfect grind size for your coffee brewer (the optimal grind size influences the taste of your coffee). They put the grind size number on the bag so that you can adjust it on your next visit, staff wear branded shirts to make it easier to identify them, and you’re handed a card to provide background information about the coffee bean you are tasting. Each aspect of the experience adds up to how you remember it and, therefore, how you feel connected to this brand.

This example highlights a crucial point that is relevant for every product and service: A positive customer experience fosters trust and loyalty. Automotive brands can learn from such personalized and attentive service. These small and thoughtful gestures can make a significant difference in how your customers perceive and remain loyal to your brand.

Examples from the automotive industryTo give you examples from the automotive industry, we want to share what we think makes some brands stand out amongst the rest.

NIO, a Chinese car manufacturer for premium electric vehicles, offers customer-centric vehicles with leather-free interiors and battery swapping technology. The battery swapping is one key differentiator that works well in their Chinese home market, which has a wide network of swapping stations. In areas with only a few swapping stations, this benefit could quickly dissolve and customers will more likely fall back to advanced fast charging technologies from other brands.

Apart from its main product, NIO has its own interpretation of a good and engaging showroom. They call it NIO House: “Welcome to NIO House. A pleasant, welcoming space for our users and community to express, share and experience memorable moments together” (NIO, 2025). With that, NIO makes it possible to form a relationship with the brand beyond the car. It is not just about mobility. It is about lifestyle and emotion. However, what works well in the Chinese home market does not guarantee success in European markets. In 2024, NIO sold around 400 new cars in Germany—which is less than 1% of what the established premium brands sold: Mercedes: 257.888 new cars and BMW: 232.886 new cars (Kraftfahrt Bundesamt, 2025).

Established brands have their existing sales teams and dealership networks that offer a good in-person service experience with some digital add-ons, like online configuration. If we compare BMW with NIO, the online car configurator from BMW offers a wide array of different options that are not necessarily compatible with each other (for example, the BMW i4 has four engine models, three trims, two packages and 72 single options). NIO, on the other hand, offers six different premium cars with almost all features in their base or long-range model with a few additional options to choose from (comfort package, performance brakes, sunroof dimming, winter tires, etc.) and personalization of exterior and interior colors.

“The key to solving business problems is to focus on the human problems.” (IBM, 2025)

In the end, loyalty is all about working together as a team, treasuring what makes us human, and understanding how everything is intertwined to shape a service experience that enriches our daily lives. This is how we can gain trust from all actors, create happy and returning customers, and have satisfied employees, too.

So, we ask you to:

Consider the human factor and make seamless experiences that foster trust and loyalty. Service design can be a very helpful way to achieve that.
Learn from other industries and different organizations of all sizes. Integrate these learnings into your product and service experiences.
Try not to assume the status quo. Go out, observe, speak to people, and learn from them.

This article has been co-written by Oliver Ristau (Associate Design Director) and Chu-Yi Vuong (Senior Service & UX Designer) from IBM iX who are based in Germany. The above article is personal and does not necessarily represent IBM’s positions, strategies, or opinions.

Sources

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