On Trust: The Value of the Emotional Buyer

On Trust: The Value of the Emotional Buyer

Auto dealers are always looking for that silver bullet:  what edge can I get on my competition to drive more traffic and increase market share?  The 2017 AMCI Inside Trusted Automotive Brand StudySM Report shows that trust is a significant factor in brand loyalty in the car business.  Maybe that seems obvious, but I encourage all car dealers and automotive advertising agencies to take a few minutes to read the article below, in particular focus on the 10 factors that influence customer loyalty.  And then let this one sink in:  a brand is no longer what we tell the consumer it is, it is what consumers tell each other it is.

 published the great article below, well worth the read for anybody involved in automotive marketing.

On Trust: The Value of the Emotional Buyer

June 19, 2017

With the spread of the internet and an ever-growing list of businesses to frequent, customer loyalty is more important than ever – and some brands have cracked the code. Starbucks, Apple, and Harley-Davidson, to name a few, know that if their customers form an emotional connection to their company, and their customers feel valued, they spend more money, are more likely to recommend the brand to friends and family members, and some maybe even go as far as tattooing logos onto their bodies.

It’s no surprise, really, that brands delivering “meaningful experiences” and providing empathy, authenticity, and customer values will be more successful than their less emotionally-driven peers.

The takeaway: customers are emotional beings, and car buyers are no exception. Cars are no longer just tools to get from point A to point B, what with the “internet of things” and the new, exciting realm of autonomous vehicles. The industry is veering towards the eventuality of our cars thinking and responding for us, and other automotive brands appeal to a sense of identity or a type of lifestyle – all of which drive a deeper, more intense emotional connection between product and consumer.

People don’t isolate their car purchases. They don’t file them away in a separate corner of their brain, setting aside emotion for logic; everything you buy becomes a part of your personal world.

Yet the auto industry is lagging behind.

AMCI, a global automotive consulting agency that specializes in “getting results for the world’s most influential automotive brands,” noticed the discrepancy between customer loyalty in non-automotive and automotive brands and wanted to know why the auto industry was so behind.

“The industry has a lot of entrenched approaches that are more about minimizing ‘things gone wrong’ rather than focusing on ‘things gone right’,” said Ian Beavis, Chief Strategy Officer at AMCI. “Despite improvements in quality, satisfaction etc, the industry is still paying enormous sums in incentives to get consumers to buy their products. Baseball was measuring the wrong things until Billy Beane came along. We think the auto industry has been doing the same thing by not coming to grips with Trust as a core issue that influences every other measure. Trust is the ultimate enabler and has been successfully used for many years in other industries.”

AMCI wondered: Why is the car-buying process still viewed as a “painful, disconnecting, soul-robbing experience”? Why is the industry so heavily reliant on incentives to move product? And, finally, why is the loyalty from customers so low in the auto industry?

The 2017 AMCI Inside Trusted Automotive Brand StudySM Report

Much of the research conducted during the past 30 years focused on rational measures of success, like “specific dimensions of quality satisfaction” and things “gone wrong”. While these rational measures are important when it comes to customer satisfaction and improving business, AMCI thought that didn’t provide the complete view into the consumer’s thought process.

Going off of the results of these studies, the automotive industry made efforts to improve their customer satisfaction by increasing the quality of their products – something that, as a whole, helps the brand but doesn’t do much to garner customer loyalty and advocacy, two ideas that AMCI focuses on as the “ultimate [brand] goal” and something the auto industry hasn’t effectively figured out.

In the 2017 AMCI Inside Trusted Automotive Brand StudySM, they hypothesized that “Trust was actually a fundamental driver of consumer car-buying behavior,” with a “direct, predictive impact” on the decisions customers make in terms of brand loyalty and willingness to recommend the brand to others.

DrivingSales has concluded the same thing in similar studies, noting that car dealers are more likely to purchase if they “trust the salesperson” and “know and trust the manufacturer.”

Methodology

The AMCI Inside study built upon “traditional measures of loyalty” and the customer quotient (CQ), representing how well customers feel a brand “gets them.” These led to the AMCI Inside Trust IndexSM, a measure of consumer trust in the brand, the dealers, and how much the customer feels trusted by the brand in return. Using this index, AMCI identified 10 “Trust drivers” that can predict “with more than 90% accuracy how much consumers trust a brand” and vice versa:

  1. Commitment to quality
  2. Authenticity
  3. I don’t feel ripped off
  4. I feel respected
  5. I feel proud
  6. Good use of my time
  7. Genuine dialogue
  8. “Gets” me
  9. Shares my values
  10. Better “intuition” than competitors

AMCI Inside had over 2,500 people who were either currently owners of the brand or had been in the past five years rate 34 automotive brands. Those surveyed were asked to rate the brand as both manufacturer and dealer for clarity and to see if there were any differences between the two. Manufacturers and dealers were rated on a seven-point scale.

An additional 1,168 responders rated 24 non-automotive brands of which they were current customers to see if there were any differences between automotive and non-automotive brands.

What they learned

To no one’s real surprise, the AMCI Inside Trust study showed that, yes, Trust was a “highly reliable predictor of loyalty and advocacy” for a brand, regardless of which industry it belonged to. The emotional factors that drive trust, advocacy, and loyalty were universal, with the ten Trust Drivers holding steady across different brands/businesses. In other words, trust is trust is trust, regardless of the industry it’s couched in.

Jared Hamilton, CEO of DrivingSales agreed, saying “It may seem like Trust is an obvious focal point, but the automotive industry is sometimes unable to find ways to get customers to trust them. It’s partially due to a stereotype of car sales, which unfortunately is still true in some cases. It’s partially due to the need of continued effort in creating relationships, which can be hard to accomplish.”

While the study was ongoing and the results being compiled, AMCI made plans to release a ranking of Most to Least Trusted Automotive Brands. Once the results were analyzed, though, AMCI noticed something surprising. The differences in Trust scores between the automotive brands rated weren’t “what was most interesting or important.” Why?

Because not a single automotive rated in the study scored higher than a 50 on the Trust IndexSM scale.

The good news: the auto industry can improve their scores and, as a direct result of a higher Trust IndexSM score, reap the financial rewards they’re missing out on.

AMCI thinks that part of the problem can be attributed to customers not feeling like they belong to a special group or receiving individualized treatment or services, something that is difficult to implement in the large-scale world of automobiles. After all, in such an expansive industry it can be difficult to evoke “customer intimacy” and a “sense of belonging.”

As Beavis pointed out, the current strategies employed by automotive brands in today’s market lead to “high incentives and a push rather than pull approach to sales,” doing “nothing to help attract and retain quality employees.” This may lead to a lower quality of customer service.

Dealers vs. OEMs

When it comes to dealers and OEMs, dealers are often the “target of pointing fingers regarding customer service.” However, despite the stereotype, the Trust Study found that OEMs didn’t have an advantage over dealers and vice versa.

“There is no question that the behavior of both the OEM and dealer play a significant and often intertwined role in building or destroying trust with customers,” said Beavis. “In general, focusing solely on the transaction be it sales or service, without genuine care for what is right for the customer, is at the root of the problem. Up selling items or services that prey on a customer’s ignorance are often cited. Many dealers cite OEM stair steps incentives as a customer trust inhibitor.”

That isn’t to say that there were no differences. The highest-rated Trust Drivers varied between dealers and OEMs, with those at the dealer-level rated more highly in authenticity, creating a genuine dialogue, and showing respect for the customer and their time. At the OEM-level, the higher-rated drivers were related to quality and reliability, value and other elements of production, as well as not feeling “ripped off.” (Brief example: Kia and Chrysler had the higher trust in the dealer vs. OEM, with Acura, Jeep, and Subaru trusting the manufacturer level more highly.)

It is interesting to note that “some of the some of the biggest gaps favoring the dealer were seen in some brands with lower trust overall.”

Dealers have the power to “overcome some of the lack of trust in its manufacturer,” and really should strive to build trust at this level. If done successfully, it could lead to “advocacy for a specific dealer despite lower trust in the manufacturer.”

Demographic Differences

The study did find differences between men and women when it came to how much they trusted automotive brands. As it turns out, men were “significantly more likely… to trust an automotive brand and to feel trusted by it” and had significantly higher scores in the Trust IndexSM. These scores were consistent across OEMs and dealers. The exception? Non-luxury brands didn’t manifest any gender differences.

Though automotive brands earn more trust from their male customers, more women actually buy cars than men. Tesla, Toyota, Subaru, and Acura were more trusted by women, while men trusted brands like Porsche, Hyundai, Land Rover, and Infiniti.

The Trust study also revealed differences across different age groups. Those surveyed in the 30-44 year old age group had higher Trust IndexSM scores for “specialty and non-luxury brands” as opposed to the other age groups. AMCI theorized that this is the age when people are buying their first new car or just the first car for themselves. It’s a “milestone,” a “point of pride,” and an emotional connection.

On the other hand, specialty brands were more trusted by the 18-29 year olds, perhaps more attractive to this group “looking to express their identity.”

So what should dealers do?

The ranking of automotive brands against one another doesn’t really matter when it comes to trust, especially with all of them scoring under 50 points on the Trust IndexSM. The focus for all brands should be on improving the trust between brand and customer, garnering that emotional attachment – just like that one coffee shop on the corner they swear by – that will in turn increase their brand loyalty and advocacy.

Dealers should strive to be the “winners of the ‘heart share,’” to be the best at providing a “trustworthy, consistent customer experience” for their, well, customers. The Trust study points to five key areas dealers should focus on: inspired leadership, committed teams, building competency, authentic experiences, and consistency over time.

Additionally, Beavis emphasized “developing a relationship with customers by removing stress and creating transparency” as a successful strategy to garner consumer trust and loyalty. He also noted that the “trend toward one price and one point of contact is showing a lot of promise particularly among millennial customers.”

Striving to evoke trust in the consumers should be a priority; as AMCI Inside noted in their study, “if you are an OEM that spends hundreds of millions of dollars each year on incentives and tier-one advertising, but have customers that walk into a non-trustworthy, impersonal, inconsistent experience at retail, you have wasted that money.”

It isn’t just a matter of losing existing customers, either. If the retail experience a dealer or OEM offers is perceived as impersonal or rude, perhaps even condescending, that brand runs the risk of losing potential customers through disgruntled customers advocating against the brand. Scott Cook, co-founder of Intuit, hit the nail on the head with his simple quote:

“A brand is no longer what we tell the consumer it is, it is what consumers tell each other it is.”

Despite the risks, it is good that customers are emotional beings: it means dealers and OEMs and the auto industry as a whole stand a real chance of improving their scores and thus increasing customer loyalty (and, in turn, earning their financial support).

And in terms of finances, building trust is absolutely worth the time and effort (and yes, the cost). For example: “if 250,000 people are coming off of lease in a given time period, with just a one-point improvement in Trust IndexSM score (and a median price point of about $30,000), a manufacturer can realize an upside of nearly $50 million.”

It isn’t rocket science to think that a customer would rather shop somewhere they feel valued and trusted. The better the experience with a particular business or brand, the more likely the customer is to become a regular. Generally speaking, it’s safe to say most people don’t visit establishments they don’t like unless it’s their only option or something absolutely necessary – like going to the DMV, or buying a car.

As for specific advice for dealerships looking to improve their Trust IndexSM? With a smile, Ian Beavis said, “Hire AMCI Inside.”

By |2018-04-17T17:49:43+00:00June 21st, 2017|Advertising, Agency, Brand Loyalty, Branding, Marketing|