Insights

What’s A Car For, Anyway?

How automotive brands can navigate the shifts in customer expectations

2020 will be remembered as the year a pandemic swept across the globe and caused unprecedented disruption, with its short- and long-term effects set to fundamentally change how we live our lives in the future. The automotive industry will not escape this shift.

Even prior to the pandemic, automakers were under pressure from shifting customer expectations and new technology driving toward a radical pivot. Now, expectations are changing once again, as people and companies take stock of a changed reality. Our research has found that those brands that create meaning in people’s lives are the most likely to navigate this shift successfully.

A Lippincott survey of 30,000 consumers spanning 500 brands in four countries, found that for automotive brands to be truly meaningful, they need to deliver both “connection” and “progress” for customers. When connection (an emotional bond that powers lifetime value) and progress (helping customers do something they were not able to do before) reinforce each other, a brand becomes significantly more resilient, with greater customer willingness to follow it into adjacent offerings or forgive it for any missteps.

Brands that succeed in doing this are called Go-to Brands, and they are likely to see five times more revenue growth, in good times and bad, than brands that fall short in delivering connection and progress. So, using these core dimensions, how can automotive brands navigate the inevitable shifts in customer behavior and demand?

THREE KEY BEHAVIORAL SHIFTS

Shift one: Permanent remote working

Aside from essential workers, many people will spend the pandemic working from their homes. And while many are itching for a return to the normalcy of their daily routine, we may see more people prefer the teleworking lifestyle even after social distancing restrictions have eased.

For the automotive industry, this more permanent increase in remote working means that cars may be called upon to play a more selective role in people’s lives. Suddenly the car is needed less for mundane daily commutes and can be optimized around performing other tasks: taking weekend trips, enjoying sports and recreational activities, and spending time with family. This could mean offerings that traditionally appealed to niche audiences will have the opportunity to swing into mainstream appeal.

Shift two: A preference for privacy

Prior to COVID-19, ride-sharing and mobility services were rapidly reducing the practical need for car ownership in an urban context. However, in the future we may see an increasing reluctance to use shared public transportation. People are going to want solutions that are private, cost-effective alternatives.

For automakers, this may mean that the connection their brand has with customers may need to be built within the construct of a different kind of relationship. Consumers will be looking for mobility options that do not require travel via mass transit — ride-sharing, autonomous vehicles, and other mobility services will be met with people hungrier than ever for these solutions.

Shift three: Comfort with virtual retail

Even the most technologically challenged among us have been thrust into the arms of the digital world. We have all become more comfortable communicating via video call and instant messaging apps, while completely replacing brick and mortar retail visits with online experiences.

Automotive retail has traditionally been built on the in-person experience of visiting a dealership to experience the product and seal the deal. However, this is likely to change as customers become more comfortable transacting entirely online. As customer demand turns towards a smooth online purchase process; automotive brands will increasingly need to meet customers where they are and establish trust in the digital retail process.

HOW TO STAY MEANINGFUL

People are looking for a more personal connection with brands that champion their values and show they care. Equally important is a brand’s ability to enable progress for customers, whether by solving a larger societal problem or making a smaller quest in daily life easier. According to our research, automotive brands included in our study scored well on the drivers of connection and progress. (See the Exhibit below.)

In the time of COVID-19 and its aftermath, doubling down on these dimensions can provide a roadmap for brands to create meaning for customers in a new reality. To drive both connection and progress, the following principles will help navigate a new customer landscape:

Lean into your brand purpose: With the role of the car in customers’ lives poised to change, whether through becoming a vehicle optimized for leisure or a mass mobility solution, connection to a brand is more important than ever. A strong brand purpose will help drive this connection. Ask yourself: As a customer, in my new situation, what could I want or expect from a company promising whatever your purpose says? What unique assets do you have to bring in service of customers’ new needs and circumstances? What role do you have customers’ permission to play?

Put customers at ease in unfamiliar territory: COVID-19 will leave unfamiliarity in its wake. From concerns about hygiene to privacy to reliability, connection will come from an automotive brand’s ability to mitigate customer stress and uncertainty. Additionally, customers are going to look for flexibility; they may be reluctant to make financial commitments that do not allow them to respond to the unexpected. This is an opportunity for brands to both drive connection with customers while helping them make progress in their lives. What solutions can your brand put forward that ease anxiety and give customers new flexibility when it comes to car ownership and mobility?

Go-to Brands achieve five times more revenue growth than brands who fail to deliver connection and progress to customers.

Be a part of the broader societal solution: Help make further progress for customers by accelerating the roll-out of mobility solutions that do not require travel via mass transit. At the same time, help people connect to their local communities. Are there ways you can connect your customers meaningfully to others who are looking for the same mobility solution?

Analyze the moments that matter: Whether enabling progress for customers through new mobility solutions or making the path to purchase entirely digital, analyze which brand touchpoints need to be created or reimagined. Think about how your brand purpose and experience can be expressed powerfully in the digital realm beyond a physical dealership and beyond the product itself. How can you build connection in the virtual realm both for people first discovering your brand, and in ongoing engagement?

During this pandemic and in its aftermath, staying meaningful will help automotive brands successfully address the mobility needs of a changed world.

What’s A Car For, Anyway?


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