Posted by Comments Off on How does brand experience affect customer loyalty? Drive Experience, Event Experience, Product Launches

Article Highlights

– Studies show in the automotive industry there is a difference between repeat business and customer loyalty.

– People mention a good brand experience to an average of nine people, but will talk about a bad experience to 16 people.

– Apple’s product launches are an example of the power of using events to create positive brand experiences and build brand loyalty.

There’s no question that brand experience is crucial to customer loyalty – the relationship between the two is a phenomenon that has been well researched by academics, and put into practice with great success by brands like Apple and Subaru.

According to Brakus, Schmitt & Zarantonello, who conducted one of the most cited and well respected scientific analyses on the subject, brand experience is made up of the “sensations, feelings, cognitions, and behavioral responses evoked by brand related stimuli that are part of a brand’s design and identity, packaging, communications, and environments.” In other words, brand experience is neither inherently positive nor negative. Instead it refers solely to the customer’s internal response to external brand stimuli.

The research conducted by Brakus, Schmitt & Zarantonello, clearly shows that brand experience does affect satisfaction and loyalty. The reason for this is simple, if a consumer has a positive experience with your brand they will want to replicate that experience. If they have a negative experience with your brand they’ll avoid your brand, and the chance of repeating the negative experience. Consequently, brand experience affects brand perception relating to past experiences, but also impacts future-directed consumer loyalty.

Brand experience refers to how brands make us feel. Satisfaction resulting from a positive customer experience builds loyalty as clients seek to replicate that positive experience in future interactions.

Does model loyalty equate to brand loyalty in the automotive industry?

A recent analysis by Forbes looked at data released by Experian Automotive, and found that there is a difference between repeat business and customer loyalty. The difference lies in customers who buy the same model of vehicle again, versus those who will buy a different model from the same brand.

According to the research, when it comes to owners who purchase the exact same model when their lease expires (or they want something new), Range Rover generates the most repeat business – 48.2% of customers will buy another Range Rover. With high competition in the SUV market, this is an impressive achievement.

On the other hand, the study revealed that Subaru ranked first in terms of customer loyalty, with “67.7% of its buyers returning to purchase another model once they decided it was time to part with their old one”.

It’s not surprising to see that brand loyalty and overall brand satisfaction caused customers to return to the same model or brand of vehicle when their lease was up. Customers who are loyal to a vehicle model or brand are simply trying to duplicate their positive brand experience. According to CarScoops, other factors that may impact a repeat customer’s decision includes “marketing and how the car is portrayed compared to its nearest rivals.”

Brand experiences are contagious

Don’t forget that brand experiences are contagious, and what’s more a negative experience with your brand is far more likely to be shared than a positive experience. According to Forbes, people “tend to mention a good brand experience to an average of nine people, but will talk about a bad one to 16 people.” Amazon CEO Jeff Bezos, summed up the contagious nature of negative brand experiences best by saying “if you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.”

The challenge with brand experience lies in controlling them. Customers will have a positive or negative experience with your automotive brand throughout the sales cycle, while owning your vehicle, while driving in a friend’s vehicle, and they will even form experiences interacting with others on the road. Although you can’t control every point of interaction with your brand, you must ensure you make good use of the customer interactions you can control or influence.

Place events at the center of your brand experience

Brands who focus on selling positive experiences, not products, are well positioned to increase their brand loyalty. According to Steve Jobs, “you’ve got to start with the customer experience and work back toward the technology – not the other way around.” Apple’s greatest legacy is not the technology it creates, but the way in which it markets that technology to create positive brand experiences. The company’s famous product unveilings are one example of how Apple controls customer experiences. Utilizing an event to unveil your product creates a visceral response that contributes to a positive brand experience and increased customer loyalty.