How Not to Do A Customer Study
A recent study by Gfk purported to be helping the auto industry gain better insight into Generation X and Y -- two groups which automakers are increasingly struggling to achieve loyalty. The core conclusion of the study was that Generation X and Y are less loyal than previous generations -- effectively shifting responsibility for loyalty to those two customer segments.
This study gets it completely wrong -- not just in its conclusions but also in its very premise.
Why A Wrongly Structured Study is Dangerous for an Industry
Studies are as important for framing the problem as they are for suggesting possible solutions.
In this case, the Gfk study fails miserably -- because it perpetuates the wrong angle from which automakers are looking at cars.
Where Brand Loyalty Comes From
The old-school mindset that products are built and then customers are taught (through marketing) to want them is non longer useful. The truth is brand loyalty from Gen X & Y will continue to be unavailable to automakers until there is fundamental shift. The roots of brand loyalty haven't really changed -- it exists at a higher level than any individual product although a single product can single handedly create it.
Customers develop a loyalty to a brand when they trust that brand. Trust them to do what? To consistently center their product development efforts around them -- the customer -- and deliver products which to a high degree address their needs.
A Failure of Customer Centricity
The Gfk study's flaws reflect a wider malaise in the auto industry -- a failure to understand the paradigm shift among a large percentage of Gen X & Y buyers That shift is most clearly manifested in the perception of cars as part of a transportation solution, rather than objects which are centric to their individuality and identity. A second subset of the same demographic sees cars as a more transient expression of style -- like clothing or furniture -- and demand the ability to change it as often as their whims change
Square Peg in a Round Hole
By failing to see cars in that way - as a transportation solution or a transient expression of style -- auto companies continue to struggle with a battle that is not winnable. By attributing the problem to a lack of loyalty by Gen X & Y, the Gfk study leads automotive brands in the wrong direction -- blaming (rather than adapting) to the customer.
No Longer Expressions of Their Identity
If there's one thing the younger generations don't lack -- it's ways for them to express their identity.
From social media to clothing to technological choices to music -- their identities are on display to a degree never before seen. And because identities have to some extent become more transactional -- those who see cars as a form of expression, will look for ways to change things up on a more frequent basis -- rather than being loyal to a single design, vehicle type or brand
Who Says Gen X / Y Aren't loyal?
Take a look at how glued they are to their favorite artist or their Macbooks or iPhones -- or equally importantly to Facebook and Twitter. What has changed is the what it takes to earn their loyalty -- something which the auto industry needs to adapt to.
Central Brand Might No Longer Be the Automaker
Brand loyalty exists where emotion exists and for some at the automakers no longer fit that bill. For at least a subset of the younger market (which represents a significant portion of the wealth), the emotion lies in the convenience of how automobiles interact with their daily lives
Atleast some of them see them as interchangeable with other forms of transportation -- so solution providers which allow them to achieve that goal seamlessly or more easily will become the brand they love
Take It From A Former Industry Insider
In an interview Chris Bangle (Former Design Director BMW Group) summed it up perfectly:
"Car designers have to change for the next generation … they are no longer seeing their car as a new avatar… they are asking how they want the car to fit into their lives -- not the same as the previous generations.
Do they want them to fade in the background or do they want it to reflect themselves?
There are watershed moments in a industry's lifecycle -- and this is one for the auto industry.
In looking for answers, the focus needs to more than ever be on customers and their evolving mindsets. The auto industry would be better served in that challenge by studies which focus on educating them -- about the fundamental shifts in the mindsets of their future buyers.