By Scott Evans at Motor Trend Magazine
Closing the sale is just about the most important thing in business, because without the sale you’re out of business. Any good salesman will tell you, though, that getting the customer to keep coming back is nearly as important. Earlier this week, we looked at the brands with the happiest customers at closing, but today, it’s all about customer retention.
J.D. Power has released its annual customer retention survey for 2009 and this year’s big winner is Mercedes-Benz. Not only did the German luxury car-maker top the survey, but at 67% customer retention, it achieved the highest score in the survey’s seven-year history. Even more impressive is the fact that Mercedes-Benz also improved its customer retention by a full 8% over 2008 to beat second-place Honda and third-place Toyota. The highest-ranked domestic automaker was Ford at 56%.
“Mercedes-Benz has steadily improved its customer retention rates during the past five years, and in 2009, has achieved the highest rate ever attained by a manufacturer since the inception of the study,” said Raffi Festekjian, director of automotive product research at J.D. Power and Associates. “In particular, customers cite the resale value and appearance and styling of Mercedes-Benz models as primary reasons to remain loyal to the brand.”
Like all trends, the factors in brand loyalty most important to consumers tend to change regularly. Last year, safety, fuel economy, and deals/incentives showed the biggest rise in importance to consumers when considering brand loyalty. This year, the importance of resale value jumped 12% while the importance of quality jumped 6% as consumers become more thrifty in response to the country’s economic troubles.
“Although there are some signs of economic recovery, the outlook remains uncertain, so for many new-vehicle buyers, high resale value and quality are particularly important considerations that are driving purchase behavior,” said Festekjian. “Whether manufacturers are striving to increase loyalty or conquesting buyers from other brands, offering attractively styled models and having strong customer perceptions of resale value and quality are critical.”
While there was much fluctuation for individual brands in 2009, the overall industry average for customer retention held steady at 48%. Rising competition in the down market saw 13 of the 36 brands surveyed post increases in customer retention while 20 brands lost ground. This year’s most-improved are Porsche and Mini, up 14% respectively. For Porsche, resale value, fuel economy and quality contributed heavily. For Mini, it was incentives and resale value. Saab, meanwhile, came in last with just 9% of customers retained.
The study surveyed 128,939 new-owners and lessees between February and May 2009 and August and October 2009. Of them, 74,610 replaced a vehicle that they had bought or leased new.
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