Brand loyalty is at the core of pretty much every company’s marketing strategy. Outside of one-hit wonders who provide a product or service that suits a specific need, any company that hopes to survive for generations wants consumers to buy their products every time there is a need for it, and automakers are no different.
That’s why recent research released by IHS Automotive is so reassuring – it reveals that more than half of all new car shoppers are loyal to a specific brand.
IHS is an automotive analyst specializing in brand recognition and customer retention, and its latest analysis (for the first quarter of 2015) shows that 52.8 percent of car buyers are loyal to their chosen brands.
There are things that help them stay loyal to a brand, and manufacturers are more than willing to offer incentives to help consumers stay loyal.
“The increased number of different models within brands makes it easier for households that may need a different type of vehicle to maintain their loyalty,” said Tom Libby, manager of automotive loyalty and industry analysis at IHS Automotive. “In addition, the increased popularity of leasing since the downturn has helped significantly as lessees are consistently more brand loyal compared to retail owners.”
The company says the number of models in the marketplace has increased by 12 percent (33 models) in the past 10 years, giving buyers more options as their needs change over years of ownership. It adds that loyalty rates are particularly high for marques such as Chevrolet, GMC, Infiniti, Jeep, Land Rover, Lexus, Lincoln, Mazda, Mitsubishi, Nissan, Porsche, Subaru and Volvo.
According to IHS data, leasing has increased by 62 percent over the same period and 24 of the 32 market segments investigated show increases in lease penetration (in some segments by as much as 20 percent).
But however loyal their customers may be, IHS says it is important for companies to implement “conquest” strategies – targeting customers of their competitors – as there is a natural turnover from vehicle to vehicle. In 2014, says the analysis, most brands lost more customers than they kept.
Some of the problem lies with discontinued models, which is why many either retain their nameplates or offer value-added replacements.
The company concludes that in order to keep the trend, automakers have to continue their loyalty branding, marketing and financial incentives, and need to understand shopping cycles to know if and when consumers are going to be returning to market.