In September last year Volvo launched ‘Care by Volvo’ which offers a new D4 or T5 for £629 per month – no deposit, the promise of a brand new car every two years and a hassle-free buying experience.
This ‘new’ way of buying a car is mirrored on how we buy a mobile phone. But in truth, if you added a deposit to ‘Care by Volvo’ it’s really not that different to opting for a PCP (Personal Contract Plan) car finance package – a method we’ve been using to ‘buy’ cars for many years.
On a PCP plan you are in effect renting your car for three years and at the end of the contract period over 75% of us pay another deposit, ‘renew’ our PCP deal and get another new car. It’s a convenient option – especially if you like having a shiny new car every few years.
PCP is by far the biggest contributor to the £31.6 billion (2016) pounds that UK residents borrowed to finance a car purchase. So, with such a big market opportunity and an engrained buying behaviour why have car manufacturers not been better at encouraging our loyalty.
The mobile phone industry has spent £millions courting our loyalty – and spend a lot of effort coming up with reasons to stay with a particular network or manufacturer.
O2 exploited the opportunity most by creating O2 Priority. Vodafone created various ‘Rewardz’ programmes. EE have added free music and sport content to their contract deals. And anyone remember Orange Wednesdays?
The reason the mobile networks launched their loyalty schemes is because they recognised that the new customer opportunity was shrinking – in what had been a market rapid growth. The market became saturated and to gain a competitive advantage the networks needed to find ways to keep their customers.
With increasing pressure on ‘sub-prime’ car finance and a shrinking car sales market – the car finance market is surely now moving towards a similar point in time.
So why aren’t the manufacturer’s exploring loyalty initiatives when the mobile networks are?
It’s not completely alien to the motoring world (Uber and most car-rental companies have some form of loyalty initiative) – but when was the last time your car dealer or manufacturer communicated with you about something that wasn’t focused on selling you something?
It’s not inconceivable to expect that one day we will have a ‘Mercedes Moments’ or ‘Toyota Tuesdays’ type loyalty initiatives.
Wouldn’t it be refreshing to see Mercedes offering customers a free coffee every time a customer drives past their local Starbucks? Or offering a free litre of petrol when drivers pass a BP petrol station. Or perhaps offering priority parking at a big sporting event. Or cheap tickets to an F1 practice day.
By owning a day, Toyota could offer free charging stations for their electric car owners every Tuesday – or perhaps extend the offer to giving customers a half price car wash on that day.In the same way EE have enhanced their mobile deals with free exclusive content, BMW could offer families and couples exclusive weekend retreats and other leisure activities.
If the customer reward can be personalised and aligned to the values all the brand the more successful it would be. But surely, at this point, any initiative that demonstrated that a car manufacturer was recognising our loyalty and giving us an extra reason to choose their brand would be a welcomed step in the right direction.
-Matt Broekhuizen, Managing Director