Harness your brand’s real-world communities to reverse the declining loyalty trend.
There’s just over a month until one of the biggest events in the automotive calendar – the September new registration release.
It’s one that comes with months of preparation, strategising and planning across all functions, usually with a huge onus on the marketing team to deliver impressive results.
But what happens after the peak of new car registrations?
You’ve hopefully delivered a record number of new leads and customers, but how can your marketing team capitalise on and nurture these prospects in the long term?
The answer lies in your communities.
In this article you’ll learn:
- How to reverse the declining loyalty trend
- How to cultivate your real-word communities
- 8 strategic actions to take right now
The expected state of play for September 2023
You have a good number of new customers. The challenge now is retention and loyalty.
Loyalty is hugely important in automobile purchases, but recent reporting shows that automotive customer loyalty is facing a decline, year-on-year. It’s estimated that commitment to repurchase has dropped from 90% after purchase to 70% when the time comes to replace a vehicle (1).
Almost half of new car owners are also undecided if they will choose the same car or brand again in the future (2).
And to top it off, rising interest rates are impacting the cost and availability of car loans for consumers, meaning that in the future, a replacement car is likely to be an even more considered purchase.
Cultivate your communities
Now’s the time to take action and to cultivate your communities. Why? Because community recommendations are the single biggest influence on consumer buying behaviour. Most of these happen in the real world, rather than online, where we assume communities exist.
The majority of consumer research takes place online, at a dealership or amongst peers, so car brands are not in a position of power when it comes to influencing customers. But real-world communities are.
Take Anna, who’s just bought a brand-new March-release car.
She lives in an area that Herdify has identified as a strong community for that particular brand of car. After purchasing her new car, she suddenly starts seeing that brand of car everywhere. There are no more of that brand on the road, but her new purchase means that she has “unfiltered” it in her brain. This is known as the Baader-Meinhof phenomenon, otherwise known as the “Red Mini effect”.
The more “red Minis” that Anna sees on the road, the more she will be influenced to believe that she has made the right decision in her purchase, making her more likely to repurchase.
There are many marketing tactics that you can employ to boost loyalty, but all of them will be more effective in areas with the “red Mini” effect – ie, the areas where strong communities will reinforce those memory structures.
By directing your loyalty campaigns to only those locations with powerful communities, you’ll also deploy resource and budget more effectively, rather than inefficiently target the entire country.
Your checklist for building brand loyalty with communities
- Prompt the “keeping up with the Joneses” effect. Remind customers that other people like them in their community are driving your brand
- Adapt your ad copy to acknowledge community conversation – “over 200 people in Bristol have already signed up to find out about our newest car”
- Match intent data with ad copy. Ask customers why they purchased, or what they like most about your brand. Use that to determine your ad copy in those areas
- Reinforce a “being in the club” mentality. Customers love to talk to each other about “exclusive” memberships – the more they talk, the more they remind each other about your brand
- Make customers feel like they are early adopters. They love to see the brand grow and it makes them feel happy that they got in early. Try releasing products to loyal members for early test-and-review
- Create a limited sign-up campaign for future releases – for example, customers need a referral code to get in. This makes brand advocates feel special, and it’s a message they’re likely to pass on
- Host dealership pop-ups. Customers tend to attend as groups (prompting group advocacy and referrals)
- Select influencers on a local level to spark conversation offline. If a customer sees an influencer who is relevant to them, and who is driving one of your cars, they are more likely to talk to their friends about it
Ultimately, the goal is to create multiple touchpoints that remind your customer what they loved about your brand, reinforced by conversations and recommendations in their local community.
By doing this on a local level across your strongest communities, you’ll direct your marketing activity to customers most receptive to your message, and stimulate loyalty, advocacy and true retention.
(1) Research by Bochmann Consulting
(2) Beehive Research