One of the biggest trends impacting the automotive industry is the decline in brand loyalty.
Nearly 70% of car shoppers are brand-agnostic. And almost half of car buyers today are open to any make or model.
These changes in brand loyalty are especially influenced by generation differences. While older generations are more loyal, Gen Z and millennials spend hours researching online. This exposes them to additional options along the way that can sway their purchasing decision.
Automotive dealers need to tailor the car buying experience to each generation’s preferences to stay competitive. Here, we’ll explore strategies for dealers to build brand loyalty with each generation.
Table of Contents
- 3 Biggest Automotive Brand Loyalty Roadblocks
- How To Build Brand Loyalty With Gen Z
- How To Build Brand Loyalty With Millennials
- How To Build Brand Loyalty With Gen X
- How To Build Brand Loyalty With Baby Boomers
- What Is Generation Alpha?
The 3 Biggest Brand Loyalty Roadblocks for Automotive Companies
The retail industry often bases customer loyalty initiatives on the fact that consumers purchase at a high frequency. This helps marketers track buying behavior by demographics, seasonality and related purchases.
However, automotive dealers struggle with low purchase frequency. This results in the three biggest roadblocks to building brand loyalty:
- Lack of touchpoints with the customer.
- Less ability to influence buying behavior.
- Poor customer data.
Here are some tactics to address these specific pain points for each generation.
How To Build Brand Loyalty With Gen Z
Gen Z is the youngest generation with adult members born after 1997 and aged 25 and younger.
Gen Z will soon become the largest cohort of consumers and the most important audience for automotive dealers to tailor their customer experience and marketing practices toward. Let’s explore how to get Gen Z bought into your brand.
Show a Commitment to Sustainability
Data shows that 62% of Gen Z consumers prefer to buy from sustainable brands. 73% are willing to pay a higher price for eco-friendly products.
One example of an automotive company showing commitment to sustainability is Subaru’s Love Promise initiative. They provide ways for dealerships to support local social, economic, and environmental causes. Subaru has increased brand loyalty with Gen Z and millennials who want their car to reflect their values.
Increase Touchpoints With the Right Media Mix
Gen Z is the first generation to have a smartphone throughout their entire teenage years. Their attention span is just 8 seconds on average. This means mobile-focused digital marketing strategies are a must when building awareness and loyalty with Gen Z.
To reach this audience, focus on mobile advertising. Also, leverage video advertising (such as CTV, YouTube, and TikTok), user-generated content and influencer marketing to increase brand awareness. This is especially important during the “consideration” stage of the buyer journey, when they’re researching many makes and models.
Finally, avoid generic advertising when possible. When advertising to Gen Z, consider A/B testing your messaging and creative to get the right generational approach.
Improve Customer Data With Smart Technology Platforms
For all automotive buyers (not just Gen Z), the trend of connected car technology can improve brand loyalty. Vehicle management subscriptions like intelligent parking can be used to drive consistent customer engagement. These subscriptions often require the customer to connect with their smartphone or an app, which provides options for sending push notifications.
This allows automotive companies to create rewards programs that incentivize certain purchasing behaviors and collect more consistent customer data.
How To Build Brand Loyalty With Millennials
Millennials are defined as anyone born between the years 1981 and 1996. As of 2023, that includes people between the ages of 26 and 42 years old.
Millennials are one of the most fickle generations for automotive brand loyalty. Compared to Gen X and Baby Boomers, millennials showed the highest trends away from brand loyalty:
- A 36% likelihood of buying from a new automotive manufacturer.
- A 43% intent to buy a new manufacturer model.
How can you be successful with millennials? Here are some tips.
Influence Buying Behavior by Sharing Innovations
Millennials are a go-getting group – likely because many were becoming adults during the height of the 2008 financial crisis. They are scrappy and care about innovation.
General Motors is connecting with millennials and other generations alike as one of the most brand-loyal automotive manufacturers on the market. They earned a 65.4% retention rate in 2022 and are a leader in five individual vehicle categories.
GM is sharing innovations in the electric vehicle market to do this. Not only have they rebranded their logo, but they’ve created clear, thoughtful content, websites and PR around how they’re contributing toward a zero-emissions future. GM is rallying consumers by sharing how automotive buyers can be part of the revolution.
Engage Through Social Media & Multichannel Marketing
Facebook, Instagram and other social platforms arose when the youngest millennials were in their teens, making millennials an important audience for social media marketing. In fact, over 89% of millennials use social media, and 62% report preferring social media to TV advertising.
But just because millennials gravitate toward social platforms doesn’t mean automotive companies should ignore other advertising channels. Maintaining CTV, search and display initiatives is important for reaching millennial audiences since they’re spending nearly 17 hours on average researching their next car purchase.
Leverage Google Business Profile & Customer Reviews
In your own social circle, you likely know “micro-experts” in specific topics, including automotive. While these individuals may have different opinions on which make or model is the best, they influence others’ buying decisions. Similarly, millennials are influenced by their social circle and online reviews and seek to purchase from brands that are authentic and honorable. Because 84% of millennials report a mistrust of traditional advertising tactics, ensuring you build loyalty with these “micro-influencers” improves awareness and interest throughout the buyer journey.
Automotive dealers who are recommended by family and friends and who create a digital word-of-mouth presence on their Google Business Profile (formerly known as Google My Business) will help millennial shoppers trust your brand. Another benefit of having an updated Google Business Profile (one not only with reviews, but also with the right business category, current contact information and high-quality inventory photos) is that your local listings will appear in the Google Local Pack in web searches.
To build a good online reputation, consider creating a review process to gauge how their purchase or visit went. Then, reach out to customers who rate you highly via email and/or text and ask them to leave a review on Google. You can set up simple automations to do this using marketing platforms. Also, consider asking them to leave a review on Trustpilot as well and then adding those reviews to your website for social proof.
How To Build Brand Loyalty With Gen X
Gen X is often referred to as the “middle generation.” It consists of people born between 1965 and 1980 (ages 43 to 58 as of 2023). Because they only make up about 20% of the population, Gen X can often be forgotten by marketers.
But Gen X has mighty spending power you shouldn’t ignore. For instance, in 2021, Gen X spent the most money of any U.S. generation per the World Economic Forum.
Let’s dive into how to appeal to Gen X buyers.
Outline an Obvious Path to Purchase
Gen X represents 31% of the total U.S. income and are a generation of decision-makers. They have an independent, entrepreneurial spirit and seek clear and honest product and marketing messaging. Dealerships that provide a simple path to purchase help Gen X make efficient buying decisions.
In a tangential model outside of the automotive industry, Kubota has excelled in creating a simple path to purchase through their partnership with Realtor.com. Kubota sought to connect with audiences searching for rural properties who may be first-time residential equipment buyers. They served personalized Kubota residential equipment ads that matched each consumer’s need for the outdoor job, from hobby farming, to landscaping, property maintenance, and more.
Delivering personalized messaging helped Kubota bring in a 165% increase in visits to local dealer websites.
Connect Using Video & Email Marketing
Because Gen X is a more loyal generation compared to millennials and Gen Z, they are still responsive to automotive marketing strategies like email. But their efficient, independent spirit means they want short, clever emails that get to the point.
Gen X also loves video. In fact, they account for over 1.5 billion views on YouTube per day. Because Gen Xers tend to watch videos that relate to past people or events (like music videos, for example), calling on nostalgia in your automotive advertising – but using new forms of media (like CTV) – can be the perfect combination to get Gen X’s attention.
Create Personalized Customer Loyalty Programs
Implement a customer loyalty program to reward Gen X shoppers for engaging with your brand. While this is tougher to achieve in the automotive industry because of the long sales cycles, there are still ways you can personalize your customer relationships.
Show a little extra appreciation for your Gen X customers by using a gifting program in your sales process or writing a hand-written thank you note during or after a sale and mailing it to their door. Your goal is to build a meaningful relationship while maintaining communication that allows you to understand your customer over time and when they may be searching for a new or used car again.
How To Build Brand Loyalty With Baby Boomers
Baby boomers are people who were born between 1946 – 1964 and are aged 59 and older. They’re a powerful group, controlling up to 70% of the nation’s wealth. While baby boomers are loyal to brands, dealerships have an opportunity to provide an exceptional customer experience.
It’s important to note that if you’re tailoring your marketing to Baby Boomers, they may only have one to two cars left to purchase in their lifetime.
Provide Stellar Customer Service
Many baby boomers have negative perceptions of the car-buying process. In fact, less than 30% report that they look forward to buying a car. However, the car buying process has evolved over the years. Your dealership has the opportunity to show them the modern shopping experience and reframe these viewpoints.
Keep in mind that depending on the generation, there are only a certain number of cars the customer has left to buy in their lifetime. Older generations are buying their cars more often than leasing, which means you can make their last few major car buying experiences memorable. Getting them a great deal, or helping them purchase their dream car as a reward for years of hard work, makes an already loyal customer even more so.
Focus On Traditional Media (TV, Audio, Print and Search)
Baby boomers spend the most time of any generation watching TV, but they also spend about an equal amount of time online. In fact, 96% of baby boomers use search engines to gather information, but 38% of them click an ad because it mentions a recognizable brand.
To build brand loyalty with this generation, use both linear (traditional) and programmatic TV advertising, direct mail, audio (i.e., podcasts) and search advertising to create a strong combination of online and offline channels.
Take Stock of Your Current Inventory
When baby boomers arrive at the dealership, they have likely made up their minds on the make and model they want. With supply chain issues still causing frustration for many dealers and car shoppers, be upfront about your inventory or be ready to show them similar options. Taking a consultative approach helps improve loyalty and limit customer frustration.
What Is Generation Alpha?
Generation Alpha includes children born after 2010 and is predicted to be the most transformative generation yet. These children have been surrounded by technology since birth and are comfortable using new technology like voice assistants or tap-and-go payment solutions.
As you tailor your automotive brand loyalty to Gen Z, millennials, Gen X and baby boomers, keep in mind that some Generation Alpha members will be driving in three years, and their car-buying needs will be different, too.
Expand Your Automotive Brand and Build a Loyal Audience
Building awareness, improving brand loyalty and growing your dealership are tough in today’s competitive automotive market.
Visit Goodway Group’s franchise marketing hub to explore how you can meet your goals through local digital marketing.
Rich Powell is the senior vice president – national multi-location sales at Goodway Group. He oversees the multi-location sector, where his responsibilities include the development and execution of a go-to-market strategy for revenue growth, sales development, marketing and profitability analysis.