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% were loyal to their previous brand (Chevrolet to Chevrolet) while 53% were loyal to their previous OEM (General Motors to General Motors). These numbers are comparable to the national averages for customer loyalty.
Toyota had the largest share of the returning ethnic population by having more African-Americans, Asians and Hispanics return to market for a new vehicle than any other brand ‒ 54% bought another Toyota brand vehicle. Honda had the second largest number of Asians and Hispanics return to market volumes with 52% of the ethnic population buying another Honda vehicle. Ford had the second largest population of African-Americans return to market with 62% buying another Ford vehicle.
One of the biggest surprises was the manufacturer level loyalty among African-American owners of Cadillac, Lincoln and Buick brand vehicles. Some 67% of the Cadillac and Lincoln owners bought another vehicle from General Motors and Ford respectively, and 66% of Buick owners bought another vehicle from General Motors.
I have stated time and time again that increases in both market and profitability are dependent upon increases in owner loyalty. Investing in and nurturing customer relationships is a critical to customer engagement, which in turn leads to customer loyalty. OEMs and dealers alike must continue to embrace diversity marketing – these consumers represent a significant portion of the vehicle buying population and are loyal to their brands as the above numbers illustrate.
Posted by Brad Smith, Director, Loyalty Management Practice, Polk (03.26.2012)