Loyalty to Dealer Is Insignificant Factor in Choosing Automotive Dealership

Market research firm Morpace recently examined factors that consumers consider most influential when choosing an automotive dealership.  In the wake of nearly 2,300 Chrysler and GM dealership closures over the past year, Morpace found that consumer loyalty to brand name dealers is an insignificant factor in choosing a dealership. 

Respondents were asked to rank the importance of dealership attributes such as personal service, location, environment, inventory, deals, referrals and prior experiences with a dealership.  Of the 1,000 people surveyed, 74% considered “best deal offerings” when choosing to buy from a dealer. In fact, four in 10 respondents — the largest group — ranked best deal offerings as the top consideration.

Other top considerations were “prior positive experience” and “referral from family or friends.”

Among the lowest-​ranking considerations for buyers were “location,” the top consideration for 4.4% of respondents, and “desire to patronize a particular salesperson,” the No. 1 consideration for 1.6%.

The survey also asked respondents to rank the importance of the brand name of a dealer, such as Smith Chevrolet or Johnson Toyota. The majority of respondents — 54% — said “not at all” important, further showing that customers cared more about what they were buying rather than from whom they were planning to buy.

Although the survey shows that customers do consider friend-​and-​family referrals, their own prior experiences and even dealer marketing strategies, these factors are only starting points for buyers, said Morpace Vice President Karen Gaule.

The bottom line is that people go where they can get the best deals.  They may start with a recommendation from a friend or go to the closest dealership. But when it comes to actually making a purchase, they are willing to travel for a good deal on the product they really want,” said Morpace Vice President Karen Gaule.

Based on these findings, consumers may not mourn the loss of particular dealers so long as they still can find what they want at a low price.

"The fact is, the American consumer buys products that are convenient, predictable and affordable. It's the same for cars. The most important factors for a car buyer are overall price and monthly payment," Ed Tonkin, said chairman of the National Automobile Dealers Association and a multifranchise dealer from Portland, Ore.

[Source:  Williams, R. Vanessa.  "Buyers usually don’t consider loyalty when choosing dealerships, survey finds."  Automotive News.  26 Oct. 2010.  Web.  29 Oct. 2010.]