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What drives loyalty among luxury vehicle buyers?
One of the byproducts of the recent collapse of the automotive industry has been a renewed and some might say "zealous" focus on keeping customers loyal to the brand. There is nothing like a near-death experience that some car manufacturers experienced to shake up any complacency and force a reordering of priorities. And what has risen to the top of the list for almost all OEMs is the question of, "How do we do a better job of keeping our customers loyal - and what causes customers to be loyal or defect from the brand?"
These are complex questions and the answers differ depending on the brand.
Polk and AutoTrader.com recently worked on a study of luxury buyers to find out what was behind the decisions of luxury buyers to either stay with a luxury brand or switch. The luxury segment is of particular interest because it is forecast to grow more rapidly than the rest of the market - 12% in 2012 according to Polk's new vehicle forecast vs. 8% forecast growth for the overall U.S. new vehicle market. Plus, building strong customer relationships and loyalty are particularly important to the success and growth of any luxury brand.
The study showed that there were some overall drivers of loyalty among luxury brands. Brand affinity, which included things like a good past experience, trusting the brand, good customer service and brand reputation topped the list. "Quality/ reliability" was next, followed by "Driving Characteristics." Thinking about luxury buyers, the list of attributes makes sense. while price/good value is important to any consumer, it is not at the top of the list for these consumers, though it does fall within the Top 5.
What I found very interesting about this study is the differences that were uncovered between the luxury brands. The study brought to light that there are different motivations driving loyalty and defection for each brand. The study revealed that while consumers recognize the strengths of the luxury brands, they may still decide to purchase a different luxury brand depending on their priorities. Each of the brands studied (Acura, Audi, BMW, Cadillac, Lexus, Mercedes) had different strengths and different vulnerabilities. The table below highlights the perceived brand strengths of the brand loyalists.
|Brand||Perceived Strengths (among loyalists)|
|Acura||Price, technology and innovation stand out as loyalty drivers.|
|Audi||Style and design rate high as drivers of loyalty.|
|BMW||Driving performance is important to owners.|
|Cadillac||The brand is top-ranked for brand affinity|
|Lexus||Loyalty to dealership drives loyalty more than it does with other brands.|
|Mercedes-Benz||Quality, reliability and brand affinity are top reasons for loyalty.|
Posted 22 May 2012
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