Tag Archive | "customer loyalty"

IHS Automotive: Loyalty Drives Gains in Automotive Market Share


Southfield, MI — Analysis of first quarter new-vehicle registrations showed that loyalty and conquesting efforts by OEMs are paying off in improved retail market share, according to a report from IHS Automotive.

Brands with the greatest improvements in loyalty generally experienced market share gains during the quarter. Jeep’s market share rose 1.3 percentage points, as it achieved loyalty improvements of 8.1 percentage points during the timeframe. Similarly, Nissan and Subaru gained in loyalty, and improved their respective market share by more than half a percentage point. These three brands enjoyed the largest market share gains in the industry during the quarter.

Overall automotive industry loyalty during the first quarter was 51%, down slightly from the first quarter 2013. Brand loyalty leaders through March were Ford, with an industry-high 64% loyalty, followed by Mercedes-Benz and Toyota, each with 57.8% loyalty.

This assessment by IHS Automotive includes analysis of more than 1.8 million new-vehicle transactions in which a household returned to market during the first quarter to purchase another new vehicle. The analysis is limited to brands with more than 1,000 transactions during the timeframe.

“Both owner loyalty and competitive conquest efforts impacted market share in varying degrees during first quarter 2014,” said Jeffrey Anderson, director of loyalty at IHS Automotive.

While overall loyalty for the quarter dropped slightly from 2013, an analysis of the year- over-year first quarter trend in overall industry loyalty showed improvement.

“This is indicative of manufacturers and dealers focusing on loyalty and conquesting — including incorporating loyalty into compensation programs at the retail and corporate levels,” said Tom Libby, manager of loyalty solutions and industry analysis at IHS Automotive.

In addition, IHS found that brands with increased conquests relative to defections have also seen an increase in market share. Five brands that led the industry in net conquest/defection improvement were Mitsubishi, Jaguar, Lincoln, Jeep and Lexus. All had gains of 40% or more. Conquests for these makes were largely driven by the new Mitsubishi Outlander, Jeep Cherokee (replacement for the Liberty), Jaguar XF, Lincoln MKZ and the Lexus GX.

These brands also experienced market share improvements, with Jeep achieving a 43% improvement, Mitsubishi being up 40%, Lincoln showing a 27% gain, Lexus showing 16% improvement, and Jaguar realizing a 15% increase.

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The Value of Good Customer Service


One of the biggest challenges facing any business is keeping in balance. In many automotive businesses, more emphasis is put on getting new business than serving existing clients. And that’s no way to succeed long term.

Next to sales functions, customer service functions are vital to overall success and must be given appropriate emphasis. By customer service, I don’t just mean vehicle service. That’s another issue altogether.

Poor customer service will cost a company as much business as will having a poor salesperson on the lot. Both can damage a company’s reputation and potential for future growth.

When businesses don’t properly serve their clients after the initial sale, the clients go elsewhere the next time they need a vehicle. And in today’s times most families have at least two cars. If you’ve helped them get involved in one, why wouldn’t you serve them well and be the person they call when they need another?

If you don’t serve them well, you can’t expect them to be loyal to you, can you? Unfortunately, when a client doesn’t make a second purchase, all too often those businesses assume they weren’t good sales in the first place – that the client moved away or has not yet made another purchase. If you had a solid follow up system in place, you’d know what was going on, and probably have made that second sale.

If the client did make a second purchase elsewhere, you’ll want to know why. Besides the question of why they left you, the other question you should be considering is where did they go? Where do customers go who don’t stay with your dealership once they’ve made a single purchase?

Many simply buy from someone else. If you had followed-up, you would have discovered that the prospective client was either waiting for contact from you, or was not happy with the first buying experience, whether it was the vehicle itself or something else. Either way, you need to know the answer.

If they bought from another dealership, they either found a product or service that they liked better or a more persuasive sales professional.

I have a philosophy to share with you. Please commit to this statement: “If I am a pro, they will buy from me unless we go out of business, or the client dies.” Commit to yourself that you are going to be so professional that they are going to invest their money with you unless you are no longer in business or the decision-maker passes on to his or her heavenly reward. That may sound extreme, but that’s the way you have to feel if you want to get the business every time.

If you have lost them to the competition, I hope you will be mature enough to say, “If I lost the business, I got beat because of skill and talent. I’m going to increase my skill level so it won’t happen again.”

There will always be those clients that you simply cannot please. I’ve had clients I’ve given so much service to and I know I earned the business, but for one reason or another I didn’t close. I used to blame everyone else for these failures. However, the more I look at selling, the more I realize that if you lose to the competition, it’s usually because they outperformed you. That’s when you need to set a goal to get better at this game of selling.

The last reason customers don’t buy from you is because they no longer like your line of vehicles. It’s happened every time manufacturers go through major design changes. Some clients will hate the new look and start looking at different brands. Other people who may have never thought they’d own your brand of vehicle, though, will be attracted to the new design so there’s still plenty of new business to be had.

If existing clients have a change in their needs that requires them to go with a different manufacturer because you don’t have the product they need, accept it gracefully and move on to someone else you can serve. Your attitude at a time like that can earn you future business, should their needs change or, even better, a referral or two of friends or relatives who do like your brand.

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Fidelis Uses PPM to Drive Loyalty for Dealers and Agents


You have no doubt heard the phrase, “The customer is always right.” In the F&I world, you try to help the customer understand what they need to secure their new- or used-car purchase. When the customer knows the conversation is about them and what they want, they should be more willing to buy what you’re selling.

With 18 years of experience in the automotive industry, Ryan Williams, executive vice president of sales for Fidelis Systems, says he knows what it takes to make customers happy: Dealers and agents working together to develop a superior experience throughout the ownership cycle.

To that end, Williams and the Fidelis team have come up with the Fidelis Customer Loyalty Maintenance Program (CLMP), a strategy that supplies customer retention and loyalty for car dealers through a prepaid maintenance (PPM) program.

Bringing Them Back

First and foremost, every package is customized specifically for each dealer. Any products the dealer wants to offer can be put combined to create a unique program. The title of this program also can be customized for the dealership, but a majority of dealers call it the “Advantage Program.”

When a customer purchases a car, they are automatically signed up for the complimentary one-year Advantage Program and receive a dealer-branded membership card in the mail shortly after they purchase their vehicle.

Fidelis has a turnkey, multichannel marketing platform to stay in touch with customers. Each car buyer is contacted up to eight times in the first year via automatic emails and direct mail. These messages serve as service reminders and notification that their contract is about to expire — with an opportunity to renew.

Williams says that Fidelis’ track record proves that, the more customers come back to the dealership, the better the retention rate. “Leading sources state that there is a greater than 70 percent likelihood that a customer will buy their next car at the place where they service their current car.”

Fidelis’ software was designed to integrate with each dealer’s DMS and extract information for reports that track service income. “We know that 35 percent of customers will leave some of that contract unused and we give 100 percent of those forfeiture, or “spoilage,” dollars to the dealer,” Williams explains. In other words, the dealer can maximize income whether or not the customer comes back.

Benefits for Agents

Williams says the system was designed to serve as a retention tool for agencies as well., “We’ve been doing this for five and a half years and 94 percent of our dealerships are still with the same agency,” he says.

He adds that positive feedback has told him that CLMP opens agents up to more business because it reaches beyond the F&I office. Every department needs to be on board, he adds, because the program affects each staffer.

Additional tools for agents include online and in-person training. After Williams’ team does an initial, onsite training session, he says, “The best training is going into an account the agents have and doing a presentation with them.”

This program also has a wide range of eligibility. Any new- or used-car operation that has a service department is eligible for the program. According to Williams, dealers who use the program are running a 65 percent retention rate, a huge improvement over the 11 to 18 percent average reported by leading market researchers.

“For dealers, the most important and most appealing part of doing something on your own, is that you can build it yourself, price it yourself, control all the money and brand the dealership,” Williams says. “With this program, you get all four things in a turnkey system that delivers amazing results.”

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Toyota Says Loyalty Rate is Back Up


LOS ANGELES — For the first time since the January recall frenzy connected to allegations of runaway vehicles, Toyota says its conquest ratios have returned to historical levels, Automotive News reported.

Typically, about 45 percent of Toyota sales come from shoppers who had been driving a Toyota, Scion or Lexus vehicle, with 55 percent captured from competing brands, said Bob Carter, Toyota Division general manager. When complaints of unintended acceleration intensified in January, Toyota’s conquest ratio dipped below 50 percent, Carter said

In July, Toyota said, that trend reversed, with 57 percent of Toyota sales coming from rival brands.

“July was the first month where we went back to normal trade-in cycle,” Carter said. “Again we were the leader in retail sales, with retail sales up 17 percent from June. Camry once again is the top-selling car for the year.”

As a result of that gain in conquest sales, Carter expects Toyota’s overall share to grow 2 percentage points in July, to 16.1 percent.

Part of those gains might be from bargain hunters eyeing Toyota’s relatively high incentives, which will continue into August, Carter said.

Although Toyota’s incentive spending in July was down from second-quarter levels – an all-time high for Toyota – the automaker’s discounts are still $450 per unit higher than last year, according to edmunds.com.

Toyota’s U.S. sales are up 8 percent year-to-date, to 1.02 million units, in an overall market that has climbed 15 percent.

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