By Dan Monheit, originally shared on Carsales.com.au 12.6.21
It’s been a big six months of sharing trends, data, and behavioural insights about all things auto. Of everything we’ve learnt, perhaps the most important is that even as the world rapidly transforms around us, the core drivers of human decision-making remain the same. After all, what’s 18-months of disruption against a backdrop of 300 million years of evolution?
With that in mind, the midpoint of 2021 feels like a good time to recap some of the key takeaways from the year that’s been. As expected, these lessons are just as relevant now as in the month they were first published, and will continue to be for months, years — and maybe even millennia — to come.
December 2020: The engine powering new car sales
In December of 2020 we explored Licensing Effect; a key behavioural bias behind the 95% increase in new car enquiries. Licensing Effect refers to our tendency to constantly evaluate and balance out our virtuous acts with our indulgent ones. Gym in the morning, burger for lunch. Saving hard for a deposit, new sneakers to show for it. You get the idea.
With so much of 2020 spent being ‘virtuous’ (following ever-changing restrictions, missing out on live events, birthday celebrations, and more) it’s no wonder that thousands of Australians are treating themselves with an auto upgrade — especially when other big-ticket treats like international travel are still off the cards.
January 2021: The dawn of #vanlife
This bias, which describes our habit of assuming that our future selves will have the exact same set of tastes and preferences that our current selves do, had many of us believing we’d be getting off the grid, bush bashing and exploring our own backyard for years to come.
Almost six months on, inquiries into SUV’s, Vans, Ute’s and basically any vehicle that can take you on your next Tour De Aus are still at a high. Projection Bias provides us with the opportunity to capitalise on motivation in the moment as people will make all sorts of decisions based on the assumption that they’ll always feel exactly as they do, right here, right now.
February 2021: Kia shines a bright halo
In February Kia doubled down on a range of slick new ads, which led to a 44% increase in views and a 44% increase in enquiries. The ads did an exceptional job of telling Aussies just what type of person buys a Kia; A person who’s into fashion, music and youth culture. This was a perfect demonstration of the power of The Halo Effect, our tendency to take a single positive characteristic of a person, product or brand and extend that to our impression of their entire being.
This has always been one of the underlying reasons why we feel that our cars say so much about us as we pull up to an important meeting, a first date or a high-school reunion. As we re-emerge en masse after 12-months of deprivation and social isolation, Aussies have never been more open than ever to updating their image. The Halo Effect means that the carmakers who are also statement-makers will continue to be in high demand.
March 2021: MG lifts off with anchoring
In March we looked at how MG rose from new entrant to top 10 contender in under five years. A key part of their strategy was category defining (aka super aggressive) pricing, which played nicely into ‘Anchoring’. Anchoring is a bias that describes our tendency to depend too heavily on the first piece of information we receive when making a decision. Any subsequent information is weighed up against this first piece, which now serves as an ‘anchor’.
In most categories, there are brands that set high and low anchor points, forcing competitors to take positions relative to theirs. MG has made no apologies about coming in with prices that serve as (low) anchor points in each of the segments they’ve entered. This technique, combined with a list of inclusions far longer than you might imagine, outstanding safety ratings and glowing reviews make it easy to see why MG have positioned themselves as ‘the ones to beat’ in record time.
April 2021: CPOs demand authority
During April we dived into the Authority Bias, and how our tendency to attribute more influence to authority figures was powering a dramatic rise in ‘Certified Pre-Owned’ vehicles (CPOs).
Harnessing Authority Biases provides dealers and OEMs with the ability to give buyers some extra peace of mind when making a major life choice. The data already shows how effective a CPO accreditation can be, but showcasing expert reviews, high-profile mentions, and prestigious brand awards are all powerful ways of putting the authority bias to work.
May 2021: It’s the year of Electric Vehicles… really
Just last month we looked at all the reasons why an EV tidal wave is inevitable. Yes, sales are up, enquiries are up and content consumption is waaaay up, but the real kicker is the growing power of Social Proof.
Social proof refers to our innate herd mentality. Despite our outward proclamations that we’re unique individuals, the reality is we’re all hard wired to prefer the safety and inclusivity of being with a group. As the rate of EV adoption climbs, so too do the chances that we know someone who’s got one.
From noticing your neighbours’ new solar panels, to seeing more and more Teslas sitting next to you at the traffic lights, the once-obscure concept of going electric is quickly becoming safe and familiar. Our preference to go where the crowd goes means OEM and dealers can harness the power of showing prospective customers that people who are just like them are already on board.