How car companies are going after the ‘untapped potential’ of female car buyers
There is a marathon conquest playing out in the theatre of automotive retail, a story unfolding as though its script was torn from the pages of Looney Tunes. Specifically, those featuring an aggressive, lovesick skunk.
Those of a certain vintage well-know Pepé Le Pew, the romantic French skunk known for his dogged pursuit of Penelope, a long-lashed black cat repeatedly caught in Pepé’s lusty clutches. In between wet kisses, he overflowed with aggressive overtures: “Mmm, ma chérie, we can spend the rest of our lives making love,” he purred in his drippy French accent. With his eyes squeezed shut and lips puckered, Pepé was blind to Penelope’s reactions, which ranged from hitting him over the head with two-by-fours to full-out panic attacks, back pressed against a cinderblock wall. Once, she even jumped out of a window to try to escape him.
The bottom line: Penelope had no interest in the long-term commitment Pepé craved. The implication of this – and Pepé’s obliviousness – has only ever meant one thing: He’ll never get his girl without changing tacks.
Now back to the automotive world, where car makers are playing the part of Pepé and the role of Penelope was thrust on pretty much all women with a license to drive as companies set their crosshairs on the untapped potential of the female market. While auto makers have dug in hard in their effort to attract female buyers, offering new products with more thoughtful features (a minivan with a purse hook! Big pockets to hold homework!), new data on female buying trends suggests that women aren’t responding with the wholehearted brand loyalty car makers had hoped for. Instead, like Penelope, they seem to have a growing resistance to long-term commitment.
More so than men, women are driving an uptick in leasing, which is making an industry comeback, said Robert Karwel, senior manager of information for J.D. Power’s Canadian automotive division. “Over the last four years, women have been more likely to lease than men,” Karwel said. “And they tend not to be as loyal when they return back to market.”
This combination, which is particularly acute among millennials, could compound problems for auto makers who have been troubleshooting fervently for years to win over women and outright fretting over how to sell to millennials.
“I can’t think of a manufacturer where this is not on the agenda,” said Olivia Price-Walker, a London-based principal with Frost & Sullivan, a consulting firm with specialists in automotive research. Her office began studying the female customer back in 2013 at the behest of Nissan, which she said kicked off a global awareness of the industry’s massive blind spot – and the fact that it was likely costing them sales revenue.
“The industry really wasn’t understanding women customers very well,” she said, adding that auto makers are still stumped on how to win their long-term loyalty. “It is still not solved.”
Inside the industry, which is struggling to meet volume targets in an era of budget-conscious and often ambivalent buyers, gender-split stats have become a guiding compass. More women than men have driver’s licences in the United States, Canada and parts of Europe; even though women physically purchase fewer cars then men, and they influence between 80 and 95 per cent of all car-buying decisions. J.D. Power data shows that 41 per cent of Canadian car buyers are female. But that number could be much higher.
“There is still untapped potential,” Karwel said.
That’s in spite of the fact that 2016 will go down in automotive history as the year of the utility vehicle. Nearly every manufacturer has commissioned market research that shows women want “vehicles that serve a function and make their lives easier,” Price-Walker said. And most have added some form of sport, compact, sub-compact or luxury sport utility to their lineup. While not tailored specifically to women (lest male drivers be repelled in a repeat case of Range Rover’s Evoque, which was introduced to the market by Victoria Beckham), it’s safe to say that there is fair pursuit of female buyers.
To really lock them in, though, auto makers, like that silly skunk, would do well to shift gears. A renewed focus on customer experience, said Mark Wakefield, an automotive consultant with AlixPartners, is key to winning loyalty.
“It’s so much more profitable to keep a customer than it is to attract a new one. Part of that is offering a great customer experience,” he said.
This is exactly what Peggy Turner had in mind when she began conjuring Lexus’s new customer-service initiative, called Lexus Difference. Turner, the brand’s vice-president of owner retention and customer satisfaction in the United States, originally set her focus on instituting a cross-country “culture shift” to improve the female-customer experience in both the sales and service departments.
“What we’ve found with this initiative is that if we do focus on the details – it’s not one big revolution, more of an evolution – that men like it, too,” she said, adding that it has unexpectedly improved customer satisfaction all around. “It’s way bigger than just women. It’s multicultural people and millennials.”
In participating dealerships (there are nearly 200 in the United States; it is not yet available in Canada), focusing on details means everything from changing up the magazine offerings to hosting chefs’ demonstrations and meetings of female entrepreneurs, designing scavenger hunts for kids that come along to service appointments and offering staff training on how to speak to female customers and interpret body language. They also ensure staff dress well.
“As a luxury company, we want to exude affluence just like our guests,” Turner said. Lexus even had a signature scent developed for participating dealers to pump through their air-conditioning system. One dealer, she said, went so far as to partner with Girl Scouts of America to create a custom badge. To earn it, scouts learned how to change a tire, check engine oil and other maintenance basics.
Each dealer, Turner said, is free to pick which elements of the initiative it wants to introduce. “We have a whole toolbox they can choose from, but we want it to be organic, we want it to be genuine,” she said. “We don’t actually want customers to know we have studied this. We want them to feel like [Lexus] is home.”
Price-Walker argues that way to cement the engagement with female drivers is to address the shortage of female decision-makers employed by manufacturers.
“It’s not that you need women to make decisions about products for women,” she said. “But you do need a body of staff that is close to your customer population. Most companies haven’t got the females internally that they need,” she said. “And that is going to take ages.”