The Automotive Industry has a Trust Issue

When you see the process of buying a car unfold from the customer’s perspective, the problems become obvious. And the experience is that bad. Building on findings from C Space’s annual Customer Quotient (CQ) study, the new Trusted Automotive Brand Study from automotive consultancy AMCI Global has pinpointed the central issue.

Jessica DeVlieger

President, Americas at C Space

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.

Building on findings from C Space’s annual Customer Quotient (CQ) study, the new Trusted Automotive Brand Study from automotive consultancy AMCI Inside has pinpointed the central issue.

“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.

You may be interested in:

In Print: Our best thinking

Thinking In Print: Our best thinking delivered to your desk Every quarter, we publish the very best thinking from across our global network in In Print. It’s a physical magazine that brings together brilliant ideas, provocative thinking & our very latest insights....

Customer Inside: A Practitioners Guide to Online Communities

Report Customer Inside: A Practitioners Guide to Online Communities C Space partnered with the Market Research Society (MRS) and 130 client side practitioners to explore & understand how to get the most out of online communities (and the agencies that run them)...

How do you solve a problem for IKEA?

How do you solve a problem for IKEA? "We discovered a happy life at home is a mix of my space, your space, and our space - but people have a hard time really defining my space, within mixed/shared spaces." Lydia Choi-Johansson Intelligence...

The Rules of Community Engagement

The Rules of Community Engagement: A Study of the Motivations for Participation in Online Communities At C Space, we have been studying the art of engagement and honing our craft for well over a decade. We understand that vibrant participation begins with community...

Market Segmentation in Online Consumer Communities

Market Segmentation in Online Consumer Communities: Does it Matter? It is easy to understand why after investing heavily in a market segmentation strategy, companies would want their online consumer communities to represent those segments. But does segmentation really...

Gen Z & the Future of Mobility

Gen Z & the Future of Mobility Gen Z is diverse, connected, and mobile. Which begs the question: What does Gen Z want from their mobility experience? And how would they make it better? To find out, we brought together dozens of Gen Zers and execs from brands like Bose...

Customer Quotient: Automotive Report

Customer Quotient: US Automotive Report What draws people to choose an automotive brand? Is it price? Extended warranties? Superior service? Or something else entirely? Using the Customer Quotient™(CQ) framework, which analyzes and measures the nature of the...

Customer Quotient: Airline Report

Customer Quotient: US Airline Report In the airline industry, comfort and service can feel like afterthoughts. But there are some airlines that manage to delight and deliver an amazing experience. We used our Customer Quotient™ (CQ™) model – which identifies strong...

Customer Quotient (CQ) 2016

Customer Quotient (CQ) 2016 Customer Quotient™ (CQ™) is the capacity of a company – or brand – to build strong relationships with its customers. CQ describes and measures the five “intangible” attributes of a brand that consumers really value. The attributes that...

Customer Quotient: Grocery Report

Customer Quotient: Grocery Report More than almost any other industry, grocery and food retailers are best-positioned to drive customer loyalty by building strong relationships with customers, and reap the rewards of doing so. Because, in an industry where you’re...