Operations network - consent under gdpr 24.01.2018
Paul Kavanagh & Elke Neuteboom
1. BUILDING LOYALTY & LASTING CUSTOMER RELATIONSHIPS
What’s driving the changes in loyalty in the Automotive industry?
Paul Kavanagh
Elke Neuteboom
2. What we’ll cover
• Key factors in declining levels of loyalty in the automotive market
• Loyalty in other industries – how do these compare to the Automotive Industry
• Approaches for driving customer loyalty
6. Factors influencing Loyalty
Experiences: Both Good and Bad WOM/Recommendation/Detraction:
Friends, Family, Colleagues
Reliability
Brand experience &
Customer Service
Dealership Service
OEM owned vs. Independent
Advertising
Reviews:
Magazines, TV, Social Media
Events
Customer Journey
Warranty claim handling
8. Factors influencing Loyalty
Cultural/Global differences
Country of Manufacture
Local macro environment
Availability
Peer pressure
Dealer location
Profile of consumers
Practicality
Status
10. Changes since the 1940’s…
1940’s 1950’s 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s
WWW August 1991
Facebook - February 2004
You Tube - February 2005
Gocompare - Nov 2006
First PC’s
1975
First computers
1940’s
Reduced differentiation/greater convergence?
Choice: model range expansion
Reliability
Technology
Efficiency
Power…
Improvements
Globalisation Brand Mergers
Company Car Fleets Car allowances/ Personal lease
More information
12. Loyalty in Insurance and Utilities
Conditioned switchers /
Experimenters (23%)
Perceive switching to be easy and
tend to tend to find time to make
the switch
Neutral / Unengaged (27%)
Do not display any extreme
views towards switching/loyalty
– appear to neither agree nor
disagree to majority of
statements
Time-poor / Lazy/ Passive loyalists
(30%)
Possibly time poor - tend to be more likely
than the other groups to be persuaded to
switch but less likely to do if off their own
back (may not get around to doing it)
Loyalists (19%)
Close the door to
competitors –
entrenched with
current suppliers
and do not tend
to shop around
Very unlikely to
search for offers
Very likely to search
for offers
Very unlikely to switch Very likely to switch
1
2
3
4
Study amongst 2,024 nationally representative UK consumers in
conjunction with Panelbase.com
14. When replacing their car, 44% of new
car owners bought same brand as
current car
35% say their next car is going to be
the same brand. 46% don’t know
Loyalty to car brand
Study amongst 2,024 nationally representative UK consumers in
conjunction with Panelbase.com
15. Factors influencing brand/model purchase decisions
Study amongst 2,024 nationally representative UK consumers in
conjunction with Panelbase.com
16. Loyalty in Insurance and Utilities
4
Conditioned switchers /
Experimenters (23%)
Perceive switching to be easy and
tend to tend to find time to make
the switch
Neutral / Unengaged (27%)
Do not display any extreme
views towards switching/loyalty
– appear to neither agree nor
disagree to majority of
statements
Time-poor / Lazy/ Passive loyalists
(31%)
Possibly time poor - tend to be more likely
than the other groups to be persuaded to
switch but less likely to do if off their own
back (may not get around to doing it)
Very unlikely to
search for offers
Very likely to search
for offers
Very unlikely to switch Very likely to switch
1
2
3
Study amongst 2,024 nationally representative UK consumers in
conjunction with Panelbase.com
Loyalists (19%)
Close the door to
competitors –
entrenched with
current suppliers
and do not tend
to shop around
4
17. Loyalty in Automotive
Study amongst 1,000 UK new car owners in conjunction with
Panelbase.com
Conditioned switchers /
Experimenters (18%)
Perceive switching to be easy and
tend to tend to find time to make
the switch
Neutral / Unengaged (29%)
Do not display any extreme
views towards switching/loyalty
– appear to neither agree nor
disagree to majority of
statements
Time-poor / Lazy/ Passive loyalists
(36%)
Possibly time poor - tend to be more likely
than the other groups to be persuaded to
switch but less likely to do if off their own
back (may not get around to doing it)
Loyalists (17%)
Close the door to
competitors –
entrenched with
current suppliers
and do not tend
to shop around
1
2
3
4
Very unlikely to
search for offers
Very likely to search
for offers
Very unlikely to switch
Car brand
Very likely to switch
Car brand
18. Loyalty in Automotive
Study amongst 1,000 UK new car owners in conjunction with
Panelbase.com
Conditioned switchers /
Experimenters (18%)
Neutral / Unengaged (29%)
Time-poor / Lazy/ Passive loyalists
(36%)
Loyalists (17%)
1
2
3
4
Very unlikely to
search for offers
Very likely to search
for offers
Very unlikely to switch
Car brand
Very likely to switch
Car brand
Conditioned Switchers are most likely to use car
review websites (44%), or dealer outlets (39%)
or dealer websites when finding out more
information before buying a car.
Luxury car brands have a smaller proportion of
Conditioned Switchers (13% vs 25%)
Luxury car brands have a larger
proportion of Lazy Loyalists (40% vs 26%)
Neutrals are less likely to have
one or more social media
accounts than the other groups
19. Other research findings (in the US)
The 10 brands that
earned the most
return business:
Ford – 44%
Toyota – 43%
Kia – 40%
Hyundai – 39%
Honda – 38%
Chevrolet – 38%
Subaru – 36%
Nissan – 35%
Mercedes – 35%
Lexus – 34%
Experian's Loyalty and Trends Market Report (2014)
http://www.thestreet.com/story/12861722/1/10-car-brands-
with-the-most-loyal-buyers.html
Longer term owners are less loyal than
newer owners:
Long-term owners (those who have held onto their existing
vehicles for at least a 12 years) only exhibit 34% brand loyalty
when they finally trade them in compared to 57% of shorter-
term owners (those owning up to 12 months)
Experian Automotive
http://www.forbes.com/sites/jimgorzelany/2014/11/04/the-longest-term-car-owners-are-also-the-least-brand-loyal-buyers/
Brand loyalty among car buyers is dying a
slow death:
• 79% percent of car shoppers research vehicles online
• 50% are open to any auto brand (54% in Millennials)
• Purchasers are no longer considering one or two select
brands, they review the market
• Greater information (online) means Millennials are looking
at the full range of options
JD Power's 2013 New Autoshopper Study
http://www.thecarconnection.com/news/1086885_j-d-power-confirms-brand-loyalty-is-dead-especially-among-millennials
Brand loyalty is
fading among
car buyers:
The main reasons for
this are:
• We are buying cars
less frequently
• We shop around
constantly, even in
the dealership
• The industry is
changing rapidly—
and so are auto
brands
Experian 2012
http://business.time.com/2012/10/30/why-
brand-loyalty-is-fading-among-car-buyers/
21. View from pole position on the grid 18.04.2013 Bahrain Grand Prix / XPB
Brands start from Pole Position…
“it’s your customer to lose…”
22. Every touchpoint in the customer journey is important
We love
brand X
Dealer
Experience
WoMPurchase/
Service
Warranty
&
Breakdown
Social
Media
Brand
Experience
Product &
design
features
Advertising
& Reviews
Rational
Emotional
Experience
23. Some approaches to influence customer loyalty
Addressing the Rational, Emotional and Experience needs:
• Optimising Digital & Social Media strategy
o Most important amongst ‘Conditioned Switchers’ and Millennials
• Enhancing the emotional link to the brand
o More effective brand/dealer communication after purchase
o Loyal customers want to be treated differently to a ‘new
customer’ – “hug them like they are family”
o Loyalty schemes
• Customer experience
o Know customers in detail and their history
o Differentiation and consistency of service at every touchpoint
Rational
Emotional
Experience
24. An example of how communication does not always enhance a
relationship…
Although a well meaning and intentioned dealer
communication, there are issues…
1) Personalisation displays a complete lack of knowledge of
the customer
2) Why was the letter sent? The vehicle owned is 10 years old!
What communications like this say is we don’t know who
you are…
• Is this a dealership issue or a brand’s issue?
• Will communications like this enhance customer loyalty?
• How often does this happen in your brand?
