Brand loyalty among the automotive industry

As mentioned the executive vice president of global marketing, sales and service for Ford Motor Company Mr. Jim Farley:

“There is no more important topic for our industry, in terms of the revenue for different companies, than loyalty”.

For automotive constructors, the thing is that it is not only about the consumer attitudes about sticking with a brand; it is because of the money the constructors are getting from it.

Thanks to many research in our days we can see that there is several criteria for stay loyal:

  • For a lambda customer the fuel economy the reliability and the pricing are important.
  • For luxury segment, the performance, quality and workmanship and exterior design.

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The 5 reasons drivers buy a model :

  • Fuel economy
  • Reliability
  • The “deal” (between the buyer and the car constructor)
  • Exterior styling
  • Performance

The 5 reasons drivers avoid a model:

  • Didn’t like its exterior design
  • Too expensive
  • Didn’t like the interior design
  • Concerned about reliability
  • Didn’t like the image it gives

 

Regarding some research we can see the top three brands which get the most loyal customers:

1 Ford 61.2% of repeat buyers
2 Mercedes-Benz 57.7% of repeat buyers
3 Toyota 54.4% of repeat buyers

For a brand it is really difficult to change a customer desire and loyalty form a brand to another.

Making offers by the sellers is the best option to keep a customer loyal. We can find a kind of “loyalty war” between different car constructors. To differentiate themselves they are offering for example discounts, or including at year-end and during end-of-summer clearance time. Depending on the brand and time of the year you can sometimes find on websites “Conquest cash” to pry customers out of their old brand.

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We also can find some approach like BMW the German luxury car maker is doing. They are offering for buyers of a new BMW four year of free maintenance, which is not negligible. With this offer it for the customer to get back to the dealership. It gives a better relationship between the customer and the car constructor.

BMW invites it most loyal and specific customers to golf tournament, racing event for example.

To conclude we can see that customers are really loyal to a brand inside the automotive segment. Even around 21% of shoppers are buying without looking at the other brand. In this case we can see that brands need to think to different approach if they want to differentiate themselves. The competition between brands is significant.

http://www.bmwusa.com/standard/content/owner/ultimatebenefits.aspx

Sources:

http://www.forbes.com/sites/jimgorzelany/2011/10/13/cars-with-the-most-brand-loyal-buyers/

http://www.wsj.com/articles/SB10001424127887324624404578257703957447498

http://www.bmwusa.com/standard/content/owner/ultimatebenefits.aspx

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2 Responses to Brand loyalty among the automotive industry

  1. charlesrupin says:

    Great choice to begin with Ford’s CEO’s quote to illustrate your theory, it directly proves that what you’ll say is not only a theoretical issue but a real one in that market.

    You perfectly summarized what appeals or not customers when they are looking for a car, supported by statistics. I think that the automotive industry is where engaging the customer is the most important issue, as you said and according to the percentages you wrote, when a consumer is loyal to a certain brand, it is very hard to change his mind.

    This is why car brands need to work very hard on that particular segment as Ford’s CEO said.

  2. henriin says:

    Great post! When i studied industry design i learned that vehicle design is so hard. All of those car brands are thought through to the end so that all of their new designs follow the brand. for example if you compare front lights you see that all of them follow same “design code” and thats why i think that most of the people are use to buy same brands car cause its similar than the old and trusted one.

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