Study Reiterates Importance of Consumer Loyalty

January 14, 2008

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MINNEAPOLIS — When it comes to pushing a brand, dealers can make all the difference on the front lines, a study recently highlighted. Good dealers can increase brand loyalty, while those who struggle generally don't drive return customers.

According to research from Carlson Marketing and the Peppers & Rogers Group, dealer-customer rapport plays a vital role.

The Carlson Relationship Builder recently conducted a study, Turning the Corner in Automotive Marketing, which examined consumer loyalty and identified automakers that showed the strongest relationships with customers.

According to the research, the top three brands in terms of relationship strength were BMW, Lexus and Cadillac. Subaru, Toyota and Honda followed close behind.

Officials noted the importance of such rankings, as the relationship index highly correlates with consumers recommending a brand or returning for future purchases.

"Creating and maintaining a strong relationship with a customer basically is dependent on one thing: treating different customers differently," explained Luc Bondar, vice president of loyalty for Carlson Marketing.

The study said this is achieved by understanding three important concepts about relationships:

—They are cultivated with individuals and not with "market segments."

—Customers and sellers must have an exchange of information.

—All parties involved must make some sort of "behavioral change."

One interesting point the research found was that the customer satisfaction index, a traditional indicator, is often "inadequate." Instead, all the various components of the brand-consumer relationship are more indicative of an automaker's strength.

"Brand relationship strength is a better driver of profit than market share, quality, cost per labor hour or sales leads and close rates per marketing dollar," noted Jim Schroer, president and chief executive officer of Carlson Marketing, who also formerly held executive sales and marketing positions with various automakers.

"Chief marketing officers and vice presidents of sales should make it their top priority," Schroer added.

According to the study, relationships with consumers are affected in part by the following factors:

—Loyalty initiatives such as dealership programs, affinity credit cards or special pricing.

—Direct, one-on-one communication with consumers

—Consumers' experience at a dealership. These include "soft" aspects such as keeping promises with customers and showing caring. Fair prices, clean facilities, convenient hours and locations (i.e., "hard" factors) also play a role.

—Features on a vehicle.

For more information, visit www.carlson1to1.com/loyalty.

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