Inability to retain customers costs automakers billions COSTA MESA, Calif., Aug. 13
COSTA MESA, Calif., Aug. 13 /PRNewswire/ -- Automotive customer loyalty at
the manufacturer level has dropped by 9.2 percentage points, from 49.1 percent
in 1998, to 39.9 percent in 2008. This is costing some automakers more than
$3 billion in annual sales, according to Scott Waldron, president of Experian
Automotive, a part of global information services company Experian.
Waldron released these findings during a presentation to a collection of
leading manufacturers and marketing agencies at the ENG Automotive Customer
Relationship Management Summit here today.
"The current struggles in the auto industry make it more important than
ever for automakers to keep the customers they have coming back to purchase
another vehicle," Waldron said. "However, the increased number of available
manufacturers and models make engendering customer loyalty a bigger challenge
than ever before. Automakers who have a firm understanding of what drives
their customers to remain loyal will have a significant competitive advantage
in this challenging market."
Even a small rise in customer loyalty can lead to significant increases in
revenue. As an example, a manufacturer with 10 million current customers will
have approximately 1.5 million of those customers return to market in a given
year. A one-percentage-point rise in customer loyalty would produce 15,000
additional annual sales, or approximately $405 million in additional revenue,
based on an average vehicle sale price of $27,000.00. If this same
manufacturer could improve loyalty performance by the 9.2 percentage points
lost since 1998, they would generate an additional $3.726 billion in annual
sales.
Waldron cautioned that traditional customer satisfaction scores are not
always a reliable indicator of overall loyalty performance. He said
automakers need to understand how customer loyalty is influenced by several
other factors, such as financing, warranty work and customer satisfaction with
all dealership interactions.
"Generating customer loyalty is a far more complex process than simply
scoring high on initial customer satisfaction surveys or just tracking whether
a customer bought another vehicle of the same make," Waldron said.
"Automakers need to factor in all of their customer touch points across the
ownership lifecycle to understand the definition of loyalty that is
specifically meaningful to their brands and their customers."
Waldron added that truly effective loyalty programs begin with
manufacturers who make their own internal data assets actionable by coupling
that information with additional vehicle registration, consumer demographic
and behavioral data, and analytic expertise from sources such as Experian
Automotive.
"Automakers have incredible amounts of customer data from virtually every
customer touch point," Waldron said. "Bringing that data together with
Experian Automotive's assets provides manufacturers with new capabilities in
understanding and defining loyalty that drives from the corporate level down
to the dealer and service level to reach and retain loyal customers and drive
increased revenue."
For more information on the ENG Automotive Customer Relationship
Management Summit, please visit
http://www.usaautocrm.com/upcoming_events/210/. For more on Experian
Automotive's loyalty capabilities for the automotive market, visit
http://www.experian.com/automotive/loyalty/index.html or call 888-891-1191.
About Experian Automotive
Experian Automotive, a part of Experian, delivers information services to
manufacturers, dealers, finance and insurance companies, and consumers.
Experian(R) helps automotive clients increase customer loyalty, target and win
new business, and make better lending and vehicle purchase decisions. Its
National Vehicle Database, housing more than 500 million vehicles, along with
Experian's credit, consumer and business information assets, meets the
industry's growing demand for an integrated information source. Experian's
advanced decision support services help clients turn this information into
improved business results. Experian technology supports several top automotive
Web sites, including eBay Motors, CarsDirect.com, CarMax.com and
NADAguides.com. For more information on Experian Automotive and its suite of
services, visit our Web site at http://www.experianautomotive.com.
Contact: Christopher Fielder
Experian Public Relations
1 224 698 8628
christopher.fielder@experian.com
SOURCE Experian Automotive
