Loyal customers are pivotal to any successful automotive brand. But what makes a loyal customer in today’s digital marketplace, and what can automotive brands do to drive stronger loyalty?
In a Google survey of auto brand loyalists shopping for a new car, 41% were 100% decided before beginning their research. Loyal customers translate into repeat buyers. Unfortunately, a 2022 S&P Global study shows that customer loyalty to car brands is in decline and at an eight-year low.
This article dives into the challenges the automotive industry faces and tips and strategies to improve brand loyalty.
Problem One: A Confusing and Frustrating Buying Journey
Consumers like choices, to a point. Researchers find that too few choices lead to dissatisfaction, while too many options result in frustration, paralysis, and regret.
When most of the car buying journey was done in person, consumers could rely on the salesperson’s expertise to guide them through their options. Now that most of the car buying journey takes place online, consumers face the complex and sometimes overwhelming task of sorting through their options.
Several factors add to the complexity of the car-buying process. It’s a high ticket purchase that most people only make every few years, which adds mental and emotional pressure to the decision. Rather than a single source of information they can trust, buyers have to sort through advertising, the advice of friends and family, and any number of online resources.
Even for consumers who are certain about the make of automobile they want, there is a litany of other considerations. Model, electric or gas only, price range, fuel efficiency, safety rating, and possible add-ons can all contribute to decision fatigue.
Since having too many choices can foster post-purchase regret, car companies need to keep in mind that the car purchasing process is complex. Most car owners are not car experts, so there are many points during the multi-touch buying process when a consumer might feel confused, lost, frustrated, or overwhelmed.
Problem Two: Automotive Brands Are Not Leveraging Customer Data
With the majority of car buying research happening online, automotive brands can amass and analyze relevant, useful data that will help them speak to cleverly segmented groups of consumers. Data like this can be leveraged into targeted pay-per-click (PPC) search engine marketing (SEM) campaigns, including social media advertising, video marketing, and discovery advertising.
Customer data is useful both in customer acquisition and retention. However, many brands rely on third-party data from dealerships, garages, and comparison websites. These sources will not deliver the level of detail available to brands in today’s digital world. If the goal is to influence customers, brand-specific data needs to be collected, analyzed, and put to practical application.
Your marketing, sales, and customer service teams may think they know the customer’s needs, wants, preferences, and values, but data will expand and deepen their understanding. Plus, data can help intelligently segment customers in ways beyond age, gender, and income levels.
Problem Three: Increasing Distance Between the Brand and the Consumer
A whopping 96% of consumers mistrust and are skeptical of ads. This is important because 80% of consumers say trust impacts their buying decision. Advertising is essential because it drives visibility and puts the brand name and available models in the consumer’s mind. Still, automotive brands that rely on advertising alone are not making the person-to-person connection that influences customers.
General ads used to be effective, but in today’s digital marketplace, consumers respond best to advertising that speaks to their pain points and values.
Most pre-purchase research takes place online. Shoppers may stop by a dealership or survey their friends, but car brands are not the primary influencer in the purchasing process.
Consumers are more likely to be loyal to brands they feel a relationship with, which involves multiple touchpoints before and after a purchase. Positive reviews, outstanding customer service, and the personal touch in communication and follow-up bridge the gap between the digital world, advertising, and what customers need from a brand.
Tip One: Make the Pre-Sales Experience Memorable
When car buyers start the purchasing journey, six out of ten are unsure which brand they will buy. This means there is an opportunity for car brands to win back existing customers and win over new customers during the pre-sales journey.
At least 91% of buyers start their car buying journey online, and nearly 30% of all new car sales are now made virtually, without ever walking through the dealership doors. So, automotive brands that want to make an impact must be online.
While many people may pride themselves on making logical purchasing choices, especially for a big item like a car, the reality is that emotions are a driving factor 70% of the time.
Automotive brands that capitalize on the available digital tools to create a relevant and memorable pre-sale experience will impact existing and new customers. For example, a brand may include video marketing content with the following:
- Virtual test drives
- 360-degree views of the car interior
- Exterior walkarounds
Bring the test drive and dealership lot experience to the customer wherever they are. Clarify the features and benefits to simplify the buying process. Deliver a feeling of comfort and familiarity to the customer in a safe and friendly way.
Tip Two: Deliver a Personalised Buying Journey
Shoppers aren’t just sitting at their desktop computers. They are using laptops, tablets, and phones and expect to be able to browse, view, and research from any device. This means that car brands need to deliver an omnichannel and personalized buying journey.
Before the purchase, personalization is about delivering the information a customer wants to them when and where they want it. It includes doing anything possible to simplify the car buying process so that a shopper can identify the right choice for their needs and budget.
After the purchase, personalization is about providing helpful tools, services, and support. It also includes sharing testimonials and positive information that helps buyers feel great about their choice.
Tip Three: Utilize Loyalty Programs
Loyalty programs are important in two ways. First, by increasing the interaction between a customer and the dealership or brand, they build on the customer relationship and motivate buyers to stick with the familiar brand. Loyalty programs are also a robust source of customer data that can be used to personalize every stage of the buying experience.
Loyalty programs motivate customers to share their personal details, from contact information to product preferences. From there, all of their online and in-store activity can be tracked.
Car brands can create customized experiences across the entire purchasing journey using the ever-expanding bank of customer data. This includes email marketing and digital advertising. Instead of guessing at each customer segment’s pain points and desires, brands have detailed data, increasing the impact of each marketing effort.
Loyalty programs vary. Some allow customers to accumulate points that give them discounts on products or services. Others include free maintenance for a period after a customer purchases a car. It increases the number of buyers who get their maintenance done by the dealership and keeps them returning, building familiarity and trust.
Car brands offer other perks for loyalty, such as invitations to sports events or exceptional financing rates. The best rewards to offer are those that motivate your customers, encouraging them to come back and stick with you.
Tip Four: Leverage Your Customer Data With AI
There is a lot that AI cannot do. It is not creative, original, or insightful. It cannot understand your customers’ motivations like your marketing team can. However, it can analyze data better than anyone or anything on the planet.
One mistake some brands make is collecting data from loyalty programs, digital marketing efforts, and email marketing and leaving them in separate buckets. Unleash the true power of your data by aggregating it in one place and using AI to get a 360-degree view of your customers.
AI technology paired with machine learning can help segment your audience in useful ways. It can predict churn so that you can take action to reduce it. It can also help you identify your customers’ lifetime value.
All of this data is critical to developing proactive retention strategies that are targeted, relevant, and effective. Instead of reacting to the marketplace and economic trends, effective data mining helps you anticipate your customers’ needs, thereby outperforming your competitors.
Tip Five: Create Special Offers for Existing Customers
If your existing customer can get a hard-to-resist special offer from a competitor as a new customer, create offers that only target existing customers. This makes your current customers feel special, motivating them to stay with your brand rather than shopping around.
If retention is your goal, customers should be able to benefit more from staying with your brand than they could by switching to another. This benefit doesn’t have to be a stand-alone discount. It could be part of a more extensive loyalty program that rewards each interaction with the brand—for example, purchasing branded parts and accessories or getting serviced by the dealership.
Tip Six: Continue Outstanding Service After the Sale
Automotive brands can influence brand loyalty by making after-sale service a top priority. One in four online automotive searches is related to maintenance, parts, and service.
Provided the customer service and quality of work are excellent, anything a brand can do to drive customers to get their parts and service from the dealership builds brand loyalty.
It’s Still All About Customer Relationships
Whether a brand targets budget consumers, top-end luxury buyers, families with kids, or wealthy single professionals, other brands compete for each car buyer. Focusing on customer loyalty limits churn and maximizes the value of each new customer. It’s a win-win for brands and customers.
If you would like to drive more undecided shoppers to your brand or have questions about targeted digital marketing strategies, connect with our marketing experts today.