Back in 2009, at an industry gathering, then-CEO of Hyundai Motor America John Krafcik proclaimed that “Americans would rather go to the dentist than visit a car dealer.”
As someone who has both had a root canal and purchased a car, I can’t disagree! Why is that? Because, even though buying a car is a big financial commitment, car shopping should be fun. You get to test drive new models, blast the sound system, take in that new car smell. It’s an experience most people have only a few times in their life.
But when you see the process of buying a car unfold from the customer’s perspective, the problems become obvious. The haggling, the manipulation, the mind games. The experience is that bad.
“Historically, automotive companies use self-referential, closed-loop focus on customer satisfaction rankings and the minutiae of quality score,” the study says. “Turns out this may have been the wrong thing to measure all along. Using the CQ methodology, we proved that there is one very highly reliable predictor of loyalty and advocacy – Trust.”
AMCI’s study includes the 100-point Trust Index, which identifies 10 “Trust Drivers” that, when taken as a group, predict with over 90% accuracy how much customers trust an auto brand, and how trusted by an auto brand they feel. What I find particularly eye-opening is that not one single auto brand – evaluated by customers as either a manufacturer or a retail dealer – scored above 50 on the Trust Index.
It’s clear: auto brands have lots of work to do in the trust-earning department. But doing the work will pay off for them. The benchmark CQ research shows that the brands that deeply understand and make an emotional connection with customers maintain better revenue performance, enjoy higher return on assets, earn more repeat purchases, and have a customer base that is more likely to recommend them.
What’s the upshot for auto brands? The AMCI study makes it explicit: “Every automotive brand is potentially leaving hundreds of millions of dollars on the table by not focusing on building trust. Trusted companies will win and untrusted companies will lose market share.”
The Trusted Automotive Brand Study shows that increasing your Trust Index score is associated with higher rates of repeat purchase. If you put that into practice, the study points out, “a typical mid-sized brand could expect as much as $100 million in increased revenue on improved customer retention on returning leases alone with just one point of improvement on the AMCI Inside Trust Index.”
The pace of innovation in the automotive industry is staggering. New technologies are becoming the new normal. And all of this is advancing the industry and our lives. However, auto brands must acknowledge that product innovation alone is not enough to appeal to consumers and to earn their trust and loyalty. For them, buying a car is an emotional experience. It plays a major role in how they feel walking into a dealership, and driving out of it. As the AMCI study shows, auto brands would be well served to work as hard on improving their emotional connection with customers, and the experiences they have, as they do on innovating their product.
They should seek inspiration from outside the industry, too. Beloved brands like Starbucks and Harley Davidson, for instance, have focused on bolstering the brand qualities – such as empathy, authenticity, and shared values – that customers say matter. As a result, good things have followed, like recommendations, increased loyalty, more revenue, and, of course, trust.
Trust breeds loyalty. The key for auto brands in earning it is to see their experience from customers’ perspectives. Once they do, we’ll want to visit the car dealership more than the dentist.