The IHS Automotive Blog | Driven by Polk

By the Numbers: Automotive Loyalty and Owner Age

In my last post, I discussed the importance of retaining young vehicle buyers. In this blog, I thought I would share some 2011 calendar year-end findings regarding owner loyalty and age. The chart below shows the distribution of owners returning to market based on age. Owners between the ages of 35-64 account for more than 70% of all return to market activity. Yet as seen in the graph below, less than 50% (46.6%) of these owners are loyal to their given brand. It is clear from the graph above...
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Age and the Automotive Loyalty Effect

Common sense suggests that gaining a first time buyer provides the opportunity to create a customer for life. Yet analyzing repurchase behavior among the younger demographic set suggests that manufacturers and dealers alike are not doing enough to retain younger buyers when they return to market. Admittedly, younger buyers represent a small percentage of total repurchase activity, less than 1% for buyers 18-24 and 7.5% for buyers 25-34, but it’s not necessarily about the value these customers...R...
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By the Numbers – 2011 Ethnic Automotive Loyalty

Engaging diverse markets has become an increasingly important initiative for the automotive industry. The contributions of these consumers have been widely documented by automotive analysts including my colleague, Marc Bland. In an effort to further quantify the value of diversity marketing, I thought I’d look back at 2011 from an ethnic loyalty perspective. In 2011, 1,033,097 African-American, Asian and Hispanic new vehicle owners returned to market to buy a new vehicle. Of these owners, 47%......
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Responsibility and Accountability: Automotive Dealer Loyalty

Last month, I had the opportunity to speak at the Digital Market Strategies Conference, an event hosted by First Class Educators. If you are focused on the retail side of the automotive industry and haven’t attended an event hosted by First Class Educators, I highly recommend it. The staff, venue and speakers are top notch. I co-presented during the afternoon keynote address with Matt Murray from Dealer.com. Our session focused on the impact of social media on initial vehicle purchase and... Read...
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Consumer Choices For Fuel Efficiency

Dependence on foreign oil, increasing fuel costs and concerns for the environment have forced OEMs to develop solutions to improve the efficiency of new vehicles and their response could be seen at the North American International Auto Show which was held in Detroit from January 9 - January 22, 2012. For those consumers wishing to stick with gasoline engines, Mazda's Skyactiv technology is something worth considering. Skyactiv is the combination of an efficient high compression gasoline engine,...
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Where was the General? More on Polk's 16th Annual Automotive Loyalty Awards...

On January 10, 2012, Polk announced the winners of the 16th Annual Polk Automotive Loyalty Awards and one question has been asked over and over again, where was General Motors? GM did not win an award this year, but finished second in the Overall Loyalty to Manufacturer category. Similarly, the Chevrolet Silverado finished second in the Mid/Full-Size Pickup Truck category. To some it might appear as though GM has poor owner loyalty, but nothing could be further from the truth since General...
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Automotive News World Congress 2012 Recap

For the second straight year, I had the opportunity to attend the Automotive News World Congress. This event provides attendees with an opportunity to hear the current state of the automotive industry and opinions on the future from some of the most respected leaders across the industry. This year's event was no exception and one thing was clear, the U.S. auto industry is refreshed and revitalized. Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance spoke about the importance of... Read...
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2012 Polk Loyalty Awards

My how time flies! A year has passed and once again, we have honored excellence in owner loyalty during last night's 16th annual Polk Automotive Loyalty Awards. The awards were presented as part of the Automotive News World Congress held in Detroit, MI on January 10th, 2012.   Ford dominated this year's ceremony winning six of 16 awards, including the prestigious Overall Loyalty to Make and Overall Loyalty to Manufacturer awards. In addition to these honors, Ford also won model loyalty awards...R...
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Luxury Loyalty

It's no secret that luxury brands like BMW, Lexus and Mercedes-Benz enjoy some of the highest rates of customer loyalty in the automotive industry, but are luxury buyers loyal to the luxury vehicle segment? It turns out that they are, with nearly 46% buying within the same segment as recorded during the first five months of 2011. This isn't a recent phenomenon either as owners of luxury vehicles have repurchased vehicles within this segment at a higher rate than any other segment during four...
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Polk Automotive Connections 2011

In October of 2010, I had the privilege of participating in Polk's Automotive Loyalty Summit. While I was excited about the opportunity to discuss loyalty in front of an audience of OEMs, dealers and agencies, for me the event was more about learning from our client presenters and networking with the attendees. Well, that time has come again and we have formally announced our 2011 event. This year, we have joined together with our colleagues on the digital side of the business to create a...Read...
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King of the Automotive Conquests: Hyundai Sonata

"Looks Like a Million Bucks. Starts Under $20,000." That's Hyundai's tagline for the 2011 Sonata and it's working. In the first quarter of the 2011 calendar year, the Hyundai Sonata conquested more owners than any other car in the U.S. marketplace-18,587 to be exact. Ford F-Series was the only vehicle with more total conquests during the same time period (20,483). Perhaps even more impressive is that for every 100 Sonata owners it loses when they return to market, Hyundai gains 365 from other...R...
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Dealer Service Satisfaction

I recently had the unfortunate experience of having my vehicle towed in for service. Considering my vehicle had close to 100,000 miles on it, I began to question whether it was time to return to market and purchase a new vehicle. This thought didn't last long since the handling of my situation in the service department left me wanting to drive my car for many years to come.  Since I wasn't near my preferred servicing dealer, my vehicle was towed to a dealer near the location of my breakdown....Re...
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Want Better Volume Forecasts? Add Loyalty to the Mix

Over the years we've conducted numerous analyses measuring the contribution of loyalty-related transactions to new vehicle registrations. The scope of these studies generally focused on three distinct population's loyalty, conquest and other, which was intended to be a reflection of first-time new vehicle buyers. As one might imagine, the "other" population was large and non-descript, and underestimated the impact that used vehicle ownership has on new vehicle purchase. To better classify...Read...
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Polk Automotive Loyalty Awards Wrap Up

This week marked the presentation of the 15th annual Polk Automotive Loyalty Awards. Held at the Automotive News World Congress in Detroit, MI, the awards recognize auto manufacturers for their ability to keep owners in the same brand when they return to market for their next vehicle purchase.Stephen Polk, Chairman, President & CEO of R. L. Polk & Co., handed out awards in 16 categories including 10 vehicle segment awards, three ethnic market awards and additional awards honoring...
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Automotive Loyalty: Back to Basics

It has been quite a while since my last post and I thought for this entry I would get back to basics by reviewing some of the most important Polk owner loyalty metrics. These metrics provide OEMs and dealers with a better understanding of who's returning to market and when, but more importantly provide detailed insights into their repurchase activities. With this data in hand, OEMs and dealers alike can tailor specific owner retention strategies that drive profitability.Return to Market (RTM) -...
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The Decision is in . . .

My last blog post discussed my intention to really shop for my next vehicle amid disappointment with the lack of available incentives for Saturn owners like myself. I visited several stores and test drove multiple products and the thing that stood out most from this experience was the lack of responsiveness of dealership sales consultants. After my initial visits and test drives, I asked for lease and retail finance pricing to be sent to me via email. In almost every instance I was told to... Rea...
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Lost and Not Sure Where to Go . . .

I am a loyal GM owner having purchased six new GM vehicles over the last 10+ years with the last three purchases being Saturns. The Saturns were all purchased from the same sales consultant at the same dealership, but now that store sits empty and my sales consultant resides in parts unknown as I return to market for my next purchase.  My wife's Saturn Outlook is due to come off lease in a little over 2 months (December 2010), but she is at her mileage limit and I am interested in getting her......
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Correlating Service Events to Future Service / Repurchase Behavior

Over the last several years, I have spent a considerable amount of time analyzing automotive repair data. Most of these analyses were very specific to reporting dealer performance or optimizing service reminder business rules. However, while conducting these analyses I began to wonder if there was a cause-and-effect relationship between vehicle service events and the likelihood of an owner to return to the dealer for service or ultimately repurchase the brand. I recently had the opportunity...
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The Growing Importance of Automotive Loyalty

I’ve spent a considerable amount of time recently analyzing automotive customer loyalty patterns. I noticed that, for several makes, owner loyalty was increasing, even as retail volumes were falling at an alarming rate. Seeing this increase in customer loyalty, I began to wonder about the impact of loyalty-related transactions (or sales to customers returning to a brand) on retail registrations. My thought was that identifying a shift in the percentage of loyalty-based transactions as a...Read...
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