In a crowded and competitive automotive industry, brand loyalty can be a valuable asset in gaining an edge over competitors. The ability for a car manufacturer to retain customers is an enormous win for company perception, brand advocacy, and profitability.
Information services company Experian recently revealed their ranking of top automotive brands in terms of customer loyalty. To create the list, Experian tracked almost 7 million household vehicle repurchases from October 2014 through September 2015.
Retaining a customer requires far fewer resources and less labor than creating a new one in almost all circumstances, further underlining the need to build buyer loyalty. The ranking may not tell the entire story, but certainly illustrates which automotive companies are going above and beyond when it comes to engaging, satisfying, and retaining car buyers.
Brad Smith, Director of Automotive Statistics and Consulting for Experian, explained how and why automakers find themselves placed on this list.
“The strategies to achieve high levels of loyalty vary from brand to brand,” Smith told Loyalty360. “Some brands place greater emphasis on new product launches, while others focus their efforts on providing customers with a great value. Regardless of the strategy, all of the top performers have strong retail processes, from initial sale to vehicle service and into the next purchase cycle. Manufacturers and dealers alike understand that handling the customer effectively is key to customer retention.”
The list, along with the percentage of buyers who repurchased within the same brand, is as follows:
- Subaru, 67.7%
- Ford, 66.7%
- Mercedes-Benz, 65.1%
- Toyota, 63.5%
- Kia, 63.2%
- Hyundai, 61.3%
- Nissan, 61.1%
- Chevrolet, 60.7%
- Lexus, 60.7%
- Honda, 59.9%
“It's exciting to see that manufacturers’ efforts to improve owner loyalty are working,” said Smith. “Over the last few years, loyalty rates have increased, and these improvements are key to the industry. Understanding rates of consumer loyalty among vehicle brands, makes and models helps to drive better business decisions, such as a dealer selecting inventory and targeting advertising or a manufacturer making adjustments to a vehicle's design and creating more competitive promotional strategies.”
Interestingly, North Dakota ranks as the most loyal U.S. state, with 67.2% of consumers repurchasing the same brand. Less surprisingly, American automotive stronghold Michigan ranks second, at 66.4%. What’s more, leasing customers (69%) are substantially more loyal to brands than those who buy (56.9%).
In an industry where advertising is critical and customer retention is a major point of emphasis, this ranking is a telling indicator of which companies are able to effectively foster loyalty and brand advocacy.