Customer Retention

The automotive industry achieved nearly 14.5 million new vehicle sales in 2012, which resulted in a sales improvement of 13.4% versus 2011. There are many contributing factors to this sales achievement. The following all played a part in the industry resurgence:

• Stabilized inventory levels from the Japanese automakers
• Several new product introductions from all OEMs
• Strengthening consumer confidence in the U.S. economy and
• Lower unemployment rates

Also in 2012, we began to witness OEMs placing...

For the U.S. automotive industry, superior customer loyalty was recognized this week. I had the pleasure of watching our customers receive the annual Polk Automotive Loyalty Awards in Detroit as part of the overall activities surrounding the 2013 NAIAS (North American International Auto Show). It's a great feeling knowing OEMs and their dealer networks are working like crazy to make the buying and vehicle ownership experience richer, truer and highly relevant for their customers. As in past... Re...

Automotive marketers continue to covet the young buyer and this holds true in the luxury market as much as in the mass market. The luxury marque that captures the young buyer then merely has to retain him/her and move him/her up the ladder, while the luxury brand that fails to appeal to the young demographic is faced with the more expensive task of conquesting from a competitor. This is not to imply that customer retention is "easy," but it is generally acknowledged to be less expensive to...Read...

This month, the Jacob Javits Center in New York is the focal point for the automotive industry as it hosts the 2012 New York International Auto Show from April 4 to April 15. Each year, automotive executives, dealers, suppliers, media, automotive consumers and simply the curious descend upon New York to check out the new cars, trucks, crossovers, hybrids, electrics and futuristic concepts. On April 4, part of the Jacob Javits Center served as a launching pad for the first Annual NAMAD (North... R...

An analysis of new vehicle buyers shows that their average age was 51 years old in 2011, three years older than buyers in 2007. In 2011, 40% of all buyers were aged 55 years or older, up from about 30% just four years earlier. And, in keeping with much commentary about today’s youth, in 2011, only 11% of all new vehicle buyers were aged 34 years or younger, down from almost 16% four years earlier. Perhaps today’s young people indeed do have less interest in cars or perhaps they don’t have the...R...

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...

Americans continue to hold on to their cars and trucks longer than ever before. Nearly six years (71 months) among new vehicle owners is the latest trend. New Polk consumer research shows the opportunities for professionals managing OEM aftersales and the automotive aftermarket operations should have a lot to look forward to given this trend. It's about parts and service business, folks. Two years ago, I posted a blog on the same behavior and when we started to see a real incline in the...

If you appreciate automotive marketing that blends mild humor while showcasing product performance, you'll enjoy this video from Hyundai. The main point of their message? A rear-wheel drive Genesis can "drift" like no other car! Another clip featuring the same driver, Rhys Millen, shows him conquering Pike's Peak with the Red Bull Hyundai Genesis RM580 in order to demonstrate this similar feat on a treacherous stretch of mountain road. // So is the Hyundai brand "drifting" in a slow and...

Are the Chevy Volt and the Nissan LEAF successful in the marketplace? This year (January-August, 2011), about 3,400 Volts have been registered while the LEAF has sold about 5,300 in the same period. Interestingly, about 94% of LEAF registrations are retail sales compared to 79% for the Volt. Each of these vehicles represent a small fraction of the total brand sales, but it was expected they would at least start out as low-volume vehicles. The true value of these launches is the buzz, the...Read...

New premium vehicle registrations tend to be skewed to the Northeast, but after about three years of ownership, some of these vehicles start to migrate to other areas of the U.S., including the Midwest, South and West. As the value of these high-end vehicles decline over time, they become affordable to households with lower (relative) incomes. The Northeast’s share of new luxury registrations is in the 27-28% range, but by the time these same vehicles have been on the road for four years,...

The five makes with the largest year-over-year increases in new vehicle registrations through the first six months of 2011 have all recently introduced new or redesigned vehicles.Mitsubishi leads the industry in year-over-year gains*, thanks in large part to the success of the all-new Outlander Sport, a more compact version of the Outlander. Both of these models play in the thriving small crossover space. Mitsubishi has also benefited from more routine registration figures for the Eclipse and...R...

Any discussion about flagship luxury sedans usually gets around to mentioning the BMW 7-Series, Mercedes-Benz S-Class and/or Lexus LS, long the dominant players in this space. Five years ago, these three models by themselves accounted for 82% of all large luxury sedan registrations, with the S-Class alone claiming almost 30%.Recently, though, the field has become more crowded, and these three leaders are now facing some serious competition. During the 12-month period from June 2010 through...

For some OEMs, new vehicle inventory has been an industry concern since the Japan disaster in March. NADA posted on 6.14.11 that Honda is forecasting a 63% decline in full year profit because of the disruption in production. It's not surprising that they rolled out a very creative incentive policy to help stop the bleeding, so to speak. Dealers were notified of the "Honda Promise," where they will honor current incentives to customers that have to wait for their vehicle of choice to become...Read...

Nearly two years have passed since General Motors announced it was filing for bankruptcy. With the announcement, General Motors also determined it would discontinue production of the Pontiac, Saturn, and Hummer brands. So now what? What do owners of these brands do when they return to the marketplace for their next vehicle purchase or lease? How has General Motors fared in its customer retention?Looking at full-year 2010 data: the Pontiac brand saw 57,641 customers return to market and...

Identifying with a brand and adopting it is critical for loyal behavior. Moreover, a customer that feels rewarded for their loyalty is more likely to continue patronizing that business.So what are car companies doing to reward their loyal customers? What are they doing beyond interactive websites listing brand news, upcoming events and products? How are they building relationships outside of the dealership? Reaching beyond the service experience and entering into their customers’ everyday...Read...

Imagine your closing ratio if you could communicate individually via email, postal, phone, or SMS using a targeted approach or message to fit the lifecycle of the customer. This is the essence of relationship marketing – the ability to have a one-on-one conversation with current and future customers to develop a unique relationship and regularly engage them with timely, relevant messages. If a dealer is not engaging their key customers then they are losing out on potential opportunities for... Re...

Now that the one week rush between Sunday, January 9 and Friday, January 14 known as NAIAS Industry week has passed, I've had a moment to reflect on the three events I attended and their impact on the ethnic automotive market. My busy week began at the 15th Annual Urban Wheel Awards, held on Sunday, January 23 at the Motor City Casino. The Decisive Media event honored African American, Asian, Hispanic and Women industry achievers. The presentation speeches by the son and daughter of two...

Once again, it was an honor to present the Polk Automotive Loyalty Awards last night at the Automotive News World Congress. This is our 15th year recognizing automotive manufacturers for their superior performance in customer retention, and the energy has never been more electric! We had several repeat winners and even some surprises. For the first time since 1999, Ford Motor Company and Ford Division took top honors by winning in both the "Overall Loyalty to Make" and "Overall Loyalty... Read...

Like the Energizer Bunny, ownership trends "keep on going" per the pattern I blogged about earlier this year. Current trends show that the average number of months one holds onto a new or used vehicle is over 52 months. This is good for the automotive aftermarket since you'd assume these cars and trucks need to stay in good shape. It's a challenge for dealers trying to improve their new vehicle sales. Let's hope longer vehicle retention also translates to stronger customer retention, but...Read...

Wow, what a turnout for the Automotive Loyalty Summit held in Long Beach! If you didn’t attend, you missed a terrific event. Below are just a few comments I heard from my customers:"All the presenters were very informative and knowledgeable about their areas" "My take away was 'Listen to the customer Talk with them' and 50% of customers are loyal to the brand but only 30% are loyal to the dealer. You only have ONE opportunity to make an impression so use it wisely."  "Very nice meeting."Over...