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:

The physical brand

The physical brand Our physical experience with a brand is the brand. In our digital world, physical is disruptive. Daniel Sills is the producer of Outside In, a podcast that explores changes in business and consumer behavior and...

What being the number one supermarket really means

What being the number one supermarket really means

by Richie Jones (C Space)
Research Live

After a week of retail results, C Space’s Richie Jones looks at the changing landscape for the supermarkets and how it’ll take more than mergers to keep Sainsbury’s on top.

How millennials are disrupting healthcare — and how to change benefits because of it

How millennials are disrupting healthcare — and how to change benefits because of it

by Hannah Walker
Employee Benefit News

More than half (56%) of millennials visited a doctor’s office in the past year, compared to three-quarters (73%) of non-millennials, according to a survey from C Space Health.

Mike Sepso: ‘Esports are a New Layer of Sports’

Mike Sepso: ‘Esports are a New Layer of Sports’ Subscribe to the Outside In podcast: From Asia to the Americas, there are 320+ million esports fans around the world -- and the audience is expected to double by 2020. But the professional sport of...

Kohl’s is improving store performance by equipping managers with real-time customer data

Kohl’s is improving store performance by equipping managers with real-time customer data

by Hilary Milnes
Digiday

Customer data is going right down to the store level at Kohl’s, where the company is using it to serve managers action items around how to better drive sales in their stores. “These functional developments are becoming table stakes — that’s what everyone in retail is competing on,” said Bill Alberti, chief client officer at customer agency C Space.

Amazon Stock Plunges 10%: The Industry Reacts

Amazon Stock Plunges 10%: The Industry Reacts

by Hugh Williams
RetailTechNews

Amazon saw third-quarter earnings beat Street estimates, but its revenue and fourth-quarter outlook fell short of expectations, causing the stock to plunge 10% in extended trading. Christina Stahlkopf, senior research consultant, C Space, notes that despite the results, Amazon is still a unique business.

For the holidays, Walmart and Target are using physical store networks to compete with Amazon

For the holidays, Walmart and Target are using physical store networks to compete with Amazon

by Hilary Milnes
Digiday

Walmart and Target are getting holiday ready using the biggest asset that Amazon doesn’t have to drive sales during the shopping season: large store networks. Bill Alberti, Chief Client Officer at C Space, comments.

How To Love Qual Data At The Speed And Price Of Quant Data

How To Love Qual Data At The Speed And Price Of Quant Data

by Ken Yanhs
Forbes

Online communities can be a great way to blend quantitative and qualitative feedback together, particularly if you are looking for feedback from the same group over time. Companies like C Space and Fuel Cycle offer great solutions for building these communities and managing them over time, allowing marketers to engage with their customers and hear feedback in a deeper and more meaningful way.

The Majors Winners

The Majors Winners

The Drum

Created to highlight the extraordinary work carried out by both individuals and teams, across the creative, design and tech industries, The Majors awards – in conjunction with The Drum – took place last week. C Space took home the Major Marketing Team title.

Hasbro: A Blueprint for Play

Hasbro: A Blueprint for Play Subscribe to the Outside In podcast: Play is a product of our imagination and creativity. It’s up to play companies to turn great play ideas into fun experiences, then get them to market, fast. And there’s no bigger “play...