2009 and 2010 to be key years for car customer loyalty??
2009 and 2010 will be pivotal years for car manufacturers and dealers as they look to retain customers in the coming years.
That is one of the main findings in new research from US analyst R. L. Polk & Co, which says that manufacturers and dealers will have difficulty surviving in the future without a true commitment to a customer-retention strategy. Fewer US sales expected and owner loyalty rates at approximately 45 percent pose an extreme financial threat to any automaker, according to Polk.
“We’re confident Detroit will pull through this,” commented Stephen Polk, chairman, president and CEO of Polk. “Nearly every manufacturer will become smaller and leaner as they look to drop poor-selling vehicles and unprofitable business units, most certainly changing the complexion of the automotive industry.
“ Polk is conducting research to determine the impact on customer loyalty when vehicle models, or even entire brands, are phased out. One of the initial findings is that consumers of discontinued models leave a manufacturer 55 percent of the time when they make their next vehicle purchase. This is approximately eight percent higher than the natural defection rate for an automotive brand and has the potential to represent thousands of consumers. In a shrinking auto market, losing one customer is even more painful, especially when many consumers may not buy a new vehicle at the same rate they previously have.
As a result, Polk is recommending its OEM (original equipment manufacturer) and dealer customers employ strategies to minimize the negative impact the potential rapid product downsizing will have on their business. Consumer and dealer loyalty programs must be taken more seriously than ever before by OEMs and they must make smart investments, in order to keep and maintain their customer base.
Customers at the risk of being “orphaned” are the most susceptible to defection and should be a primary focus. OEMs must consider these programs as important as a crucial product launch, and invest in them, if they are to survive and thrive long-term.