There may be fewer new-vehicle customers around in the next few years, which means dealers will need to make a good, memorable impression to appeal to consumers’ emotions.
New vehicle sales in Canada continue to trend downwards, despite a near all-time high in Canadian consumer confidence.
Global research firm, AlixPartners, predicts a “profit desert” for the auto industry “as it contends simultaneously and for an extended period of time, with massive spending on ‘CASE’ (connected, autonomous, shared electric) vehicles and with stagnation in key markets globally, including the United States.”
While AlixPartners sees global auto market growth for new vehicles at just 1.6 per cent through 2026, its forecast for the U.S. market is that it will begin a cyclical downturn, falling to 16.9 million units in 2019 and only 15.1 million units in 2021. That represents a drop of more than 12 per cent from 2018 levels. Whether consumers are holding on to vehicles longer (we’ve inflicted on ourselves with long-term financing), buying used instead of new, or avoiding the vehicle ownership option, the implication is that new vehicle customers will be more difficult to find in the next few years.
Customers have long memories, for better or for worse
In psychology, it is generally recognized that there are distinct types of processes that determine what people remember. A very simple classification of these processes divides them into three types: short-term memory, working memory; and long-term memory.
Short-term memory is fairly limited and is more focused on immediate experiences, such as specific events, sights, smells, sounds, etc. Working memory builds on short-term memory and is used to carry out everyday tasks that require some level of knowledge or available information. Long-term memory is based more on emotive factors and, in the context of retail, is also more powerful in determining future behaviour.
Without getting into a deep psychological discussion, the bottom line is that customers will more easily remember an event that has some element of emotional reaction than one that is humdrum or doesn’t engage them emotionally. In the words of one psychologist, “it’s the emotional arousal, not the importance of the information that helps memory.” It’s also true that negative emotions weigh more heavily than positive ones. I am sure you have experienced that in your dealership!
The implication is that any time a customer leaves your dealership after a purchase or a service experience, there will be one of two likely outcomes:
- they remember nothing or very little of the experience
- they carry strong memories of the experience
If they remember nothing or very little, that may not be a good thing. It likely means that there was nothing in the experience that was remarkable. On one level, it also means that they will forget the experience fairly soon — you did
what they expected — nothing more, nothing less.
This is one of the arguments supporting the idea of conducting surveys as soon as possible after an interaction with the customer. The mere fact of having to complete a survey with some detailed questions will help to dig up those memories, even though there will definitely be some level of what psychologists call “contamination”. To some extent, it also supports the simple approach that Net Promoter uses, which is: would you recommend us to friends and family?
But did you just meet expectations and leave the emotional column completely blank? If so, the chances building brand loyalty or having your customer recommending you will be low. It’s easy to check the top box when you’re filling out a survey, but is that answer really accurate? Does it really reflect an emotional response?
How customers remember their last interaction with you is critical for true loyalty
While first impressions are always important, what remains in the customer’s mind after dealing with you is critical. Here are some tips for getting customers to remember you in a positive light, and for increasing the chance they will want to do business with you again. This main points comes from Bob Phibbs, a retail experience guru in the U.S., and they make sense for any business.
It’s not just what you do, it’s also how you do it. The digital world presents a challenge.
Putting these pointers into the context of how and what customers remember, the big element missing is that of emotion. You can do all of the things mentioned above flawlessly and consistently, but none of them will have real impact unless there is some element of emotion involved. A genuine smile and direct eye contact are just the first steps in generating an emotional response. Training staff to look for opportunities for an emotional response is more specific than simply trying to “engage” with the customer.
In a digital world, and especially with customers who have only dealt with your dealership online to make a service appointment or research a vehicle purchase, there is no real opportunity to create an emotional response. These interactions put you at an immediate disadvantage and it’s all the more important to create that emotional link.
So, if you want your customers to do more than remember you, as in, see you in a positive light and want to continue to bring their business to you, look at how you make them feel — in every aspect of the business. It’s the emotional connection that will stay in their minds and give your business the “stickiness” that you want. It’s not rocket science and in many cases, there is no cost.
A favourite quote from Roger Penske says it best: “This is a simple business. It’s people selling cars to people.” The human element is vital to loyalty, and emotion is the fundamental driver of human behaviour.
