What exactly is customer loyalty?

What is customer loyalty? Definitions vary but the core truth is that loyalty is fundamentally bonded to emotions.

What is customer loyalty? Definitions vary but the core truth is that loyalty is fundamentally bonded to emotions. It results from a consistent positive emotional experience and a perceived value of an experience, which includes the product or service. To build loyalty you must form an emotional bond with your customer. And to do so you need to combine the physical, emotional and value elements of an experience into one cohesive, immersive experience.

One thing is for certain, it costs less to retain customers than to acquire new ones. Our report into maintaining brand consistency across car showrooms demonstrates that loyal customers ensure sales and are more likely to purchase ancillary products and services. They will also promote your brand for you.

Knowing this, organizations spend millions each year on marketing and brand development; yet automotive manufacturers continually struggle to maintain a reliable and consistent brand in their dealership networks. Why is this so hard to achieve?

There are many reasons why some brand implementations are less successful than others; however, more often than not it is the ‘we can deliver this in-house’ approach that leads to the brand breakdown across dealerships.

It is rare for manufacturers to have the correct resources with the skillsets, experience and in-house knowledge to deliver a program of this nature. Starting a program without understanding the medium- to long-term consequences of decisions can be disastrous.

Manufacturers can deliver a program of this nature, but recognizing and understanding their limitations is the starting point. It’s not a criticism. Designing and making cars is your core business, not understanding concept design, program management and supply chain procurement.

All told, there are five key factors that drive a successful brand implementation program:

• Appointment of a brand guardian: It is essential to appoint somebody who understands the automotive sector, the brand and how to deliver it. Providing a single point of contact for the implementation brings the network together and being seen as impartial and sympathetic is critical to real engagement with the dealers. 

• Early engagement with networks: Getting early engagement with the networks and gaining buy in through the business case is the starting point of the process. Ensuring they understand the philosophy of the changes and the processes associated with the customer experience, takes the engagement to a different level ensuring more compliant dealerships. 

• Leverage of supply chain: Affordability is always a key issue, and reducing costs to dealers will increase buy in and speed to market. Leveraging the existing, or creating a new supply chain can reduce costs by up to 40% for some manufacturers. 

• Flexible and scalable model: One size does not fit all and manufacturers should recognise that the level of investment required should meet individual circumstances and not be generic. Having an affordable and adaptable delivery model increases levels of brand consistency by up to 30%. 

• Robust implementation of design standards: By providing a flexible delivery model there is rarely a need for compromise. A robust approvals process partnered with management of the supply chain will deliver consistency through the network. 

Fragmenting these services by using ‘specialists’ in each area can cause huge inconsistencies before the program even starts and careful consideration of how the program is set up is essential. For example has the designer you are considering designed for an automotive brand before? How successful was the end result at dealer level (cost, speed to market, take up)? Did they take costs into consideration when designing or specifying materials?

Early decisions define success or failure in the implementation of the brand to the network. Overall it impacts how your customers experience your brand and, in turn, whether they become loyal to your brand.

Can you or your dealer network afford to make mistakes?

Paul Adams

Head of Automotive and Aerospace +44 (0)207 813 6796 Ask me a question
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