Auto Makers Shift Promotional Strategies to Improve Retention Rates

Auto makers and dealers have long relied on repeat business to drive a significant portion of their sales. But lately, more consumers are switching brands. These defections have caught the auto makers’ attention and they’re changing their promotional strategies to appeal to both old and new customers.

The latest numbers from J.D. Power and Associates 2012 Customer Retention StudySM are cause for concern. About 1/​3rd of new car buyers have been looking at new brands instead of the ones they previously purchased. In response to  the study, consumers cited the following reasons for considering new brands:

  • Previous brand does not offer the right type of vehicle
  • Vehicle costs made the previous brand difficult to afford or maintain
  • Too many problems with the brand
  • Vehicle didn’t hold a high enough resale value

Consumers in some demographic groups are also likely to experience life changes which result in a need for a different type of vehicle. This trend is especially true of younger consumers and women who may be purchasing new vehicles as a result of increased family size or improved household incomes. Study results showed that women and younger consumers are more likely than older consumers to change brands when purchasing a new car.

Some brands are finding more success with new car buyers than others because of perceived quality and because they’ve rolled out a product line with sufficient model depth to appeal to multiple levels across the car-​buying spectrum. Marketing to improve the perception of these key consumer concerns will help brands to retain customers and to ‘conquest’ – “capture customers from competitors.”

[Source: Desire for Different Vehicle Attributes. J.D. Power and Associates. Jdpower​.com. 11 Jan. 2012. Web. 3 Feb. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.