Customer Engagement: What’s the Value for Auto Finance?

Many auto companies have been up-to-speed with recent trends in customer engagement, using blogs, Twitter, and Snapchat as marketing and customer service tools. As car companies continue to nurture digital communities around their brands, should their financing arms be replicating this strategy?

Auto finance is not an easy topic to create an engaged community around, according to Mario Natarelli, managing partner at MLBM Brand Intimacy Agency. “Finance is a serious topic. Lenders are still kind of licking their wounds after the last recession,” he said. “As a result, we see that especially banks have become ultra-conservative in their marketing. Many of our lender-clients don’t create very intimate messages about their companies.”

Lifestyle brand Nike is a good example of a company that has been “adventurous” when utilizing different social media channels, he said. The company was one of the firsts to onboard Twitter’s new “Collection” feature last year, which allows brands to sell curated products through the social media platform. “Social media and content creation is a great research and customer service tool, and many lenders have recognized that,” Natarelli said. “They are already in touch with customers on Twitter, but they are just not doing enough, and are lagging behind the broader auto companies.”

Now, though, many auto lenders are looking to experiment with different engagement strategies, he added. In fact, four of top 10 “most intimate brands” last year were vehicle manufacturers — BMW, Toyota, Harley-Davidson and GMC— according to MBLM’s latest Brand Intimacy 2015 Report. When ranking just the auto industry brands, the top 10 is rounded out by Jeep, Chevrolet, Ford, Mercedes-Benz, Chrysler, and Honda. Also notable is that Uber ranks 14th in this category, and among those ages 18-to-34, it ranks in the top five, according to the study. The report surveyed about 6,000 customers across the U.S., Mexico, and UAE. “This indicates that people have strong bonds with their cars, and that this category is able to connect with consumers,” Natarelli said. That bond presents an opportunity for car lenders to create their own connections, he said, and content creation or social media is a good start.

“People like knowing that their voices are being heard,”

                                                                              Luvleen Sidhu, CSO at BankMobile

BankMobile, the branchless bank startup, is all about customer engagement and brand swag. “The engagement is something we are still trying to figure out,” Luvleen Sidhu, chief strategy and marketing officer said. “We are managing a lifestyle blog, and incorporating contributions from influencers, as well as images, podcasts, and short clips. Not everyone likes reading.” Recent headlines on the blog: “5 Reasons to Fall in Love With Filing Your Taxes” or “8 Tips to Save Money on Coffee by Brewing at Home.”

Besides gaining brand recognition, BankMobile also uses customer engagement as a research tool. “We do a lot of crowdsourcing, and we reach out to people ourselves,” Sidhu said. “People like knowing that their voices are being heard. We also organize one-on-one financial consultations, where we reach out to customers and don’t upsell another BankMobile product, but just offer them this free service.” At the end of the day, Sidhu said, customer conversion is what you aim for. The all-mobile bank is planning to roll out its auto product in the second half of 2016. But driving customer conversion is not as easy as putting together a blog post.

“My guess would be that’s not a significant driver of business, as auto finance is predominantly an indirect model,” said Paul Kramarz, director at Price Waterhouse Management Consultants. “That’s where you see banks try to integrate dealers, while captives integrate OEMs in terms of digital strategies. We find legacy companies are more confined in this regard, than startups.” Ford Motor Credit Co. (pretty much the definition of a legacy auto lender) utilizes customer engagement tools mainly for customer service purposes. “Clearly people are more connected,” Joy Falotico, chief operating officer, told AFN. “Customer preferences are changing, and we make sure to respond to comments on Facebook and Twitter, to continue to make sure that we are interacting with them.” As digital channels evolve, there is no single strategy to be recommended, Kramarz of Price Waterhouse said. “Companies are trying different approaches, but at the end of the day, the product speaks for itself,” he added.

Sidhu of BankMobile agreed. “The product comes first, but to stand out you need to go beyond that,” she said. “Engagement is secondary, but we believe in forming relationships, a bond of trust, as finance is a very personal topic for people.”