Professor Byron Sharp of the University of South Australia, writing in this month’s Market Research Magazine from the AMA, makes an excellent point about the plight of the Big 3 us automakers.
In the US, customer loyalty rates for all manufactures including the Big 3 is in the 40% to 60% range. For the major domestic and foreign automakers, loyalty rates have remained pretty constant over the past few years at about 50%.
As Professor Sharp points out, the real problem for the Big 3 is acquisition, not loyalty. The lack of acquisition among new car buyers is eroding the market share of the domestic producers. For new auto buyers, the Big 3 are increasingly not considered an option and this is where Toyota, Honda and Nissan are stealing market share.
Customer loyalty and retention is important for all organizations and Targoz Strategic Marketing is skilled at helping organizations understand why customers are loyal and who is at risk.
Truly understanding why customers are loyal to your product or service is exceptionally important to maintaining a healthy brand and organization.
However, loyalty and retention is not a substitute for new business sales. Customer loyalty and retention only brings stability to organizations and creates a foundation for growth. Customer acquisition is the real key to brand growth and this is where Detroit needs to focus its energies.