Lessons from the automotive world: Building trust to boost sales
Buying an automobile is probably the second largest purchase you’ll make after your home. Not only will you spend tens of thousands of dollars on it, but if you are like most people, you’ll live with it for a long time. Given what a major decision it is, one of the biggest factors when deciding which car to purchase is trust. If you don’t trust a particular company, you certainly aren’t going to invest the time and energy to evaluate its vehicles.
So what happens when a company actually does improve its vehicles yet still can’t get people to check out its cars? This was the case recently for a U.S. auto manufacturer. Despite launching vehicles that it believed were more reliable and satisfied consumer needs better than competitors, over half the consumers in the U.S. – and two-thirds in California — did not trust the company enough to consider its vehicles.
To attempt to build trust, and ultimately boost sales, the company came up with a number of strategies, all of which provided unbiased or third-party comparisons of its own vehicles to those of competitors. The strategies included offering competitive test drives and online brochures as well as encouraging consumers to visit online advisor sites such as Edmonds and to read community forums about its products.
It turned out that the most successful strategy for building trust involved test drives in which consumers could drive not only the company’s cars, but those of competitors as well. After the test drives, vehicle consideration was increased by 20% and sales were increased by 11%. The online brochures were relatively effective as well. They also increased trust, consideration, and sales.
On the other hand, the online advisor sites and community forums were not helpful. Perceptions of the company’s products were colored by its past vehicles, some of which admittedly weren’t so great. The online advisors and community forums were too contaminated with past experiences to provide unbiased opinions on current products. Competitive information only helps if it is actually good news.
The lessons learned from this automotive company’s experiments are widely applicable in many markets. If consumers reject a brand before considering it, they are unlikely to learn whether that brand might actually meet their needs better than the brands they are currently considering. While marketing managers might be hesitant to tell customers about competitors’ products, it actually can work so long as their own products really are better than consumers think.
John Hauser is Kirin Professor of Marketing and Glen Urban is David Austin Professor in Management; Professor of Marketing; Dean Emeritus; and Chairman, MIT Center for Digital Business
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