Clearwater, FL AutoLoop LLC, the leading provider of auto industry marketing and customer relationship management solutions that successfully drive the Sell, Service, Repeat cycle, recently announced the results of its 2016 Digital Engagement (ADE) study which uncovered new insights into the value of engagement for auto dealers.
In late 2016, AutoLoop commissioned the Automotive Digital Engagement (ADE) study to better understand how digital media impacts customer loyalty and to identify new strategies for dealers to engage and retain their customers. AutoLoop surveyed a national sample of 1,000 auto consumers and analyzed the purchase behavior of over 4 million customers representing 1,000 dealerships from across the U.S. The study found that a digital revolution is sweeping the auto industry and it could be troublesome for some dealers if they dont rethink their current marketing strategies and catch up with the digital world.
According to Doug Van Sach, AutoLoops Vice President of Analytics and Data Services, dealers should be prepared to survive a customer loyalty decline. Today, the Big 3 automakers account for only 44% of the market a 26% decline from two and a half decades ago. In this short amount of time, consumer loyalty is no longer within reach, as the average customer retention rate across the industry has sunk below 50%. This amounts to dealers losing more than half of their customers each year. While increased competition and online pricing is partially to blame for the decline in loyal consumers, a critical factor is the changing mindset of the U.S. consumer. The hard truth for dealers is that most consumers have redefined what it means to be loyal in the digital age, Van Sach stated.
How the meaning of loyalty has changed:
In surveying 1,000 vehicle owners from across the U.S. to better understand their mindset towards loyalty, AutoLoop was surprised to learn 62% of consumers actually consider themselves loyal to an automotive service center despite the low retention rate for the average dealer. To further define the gap between consumers attitudes and their actions, AutoLoop dug deeper. When customers were asked what loyalty means to them, it became clear that there is a split among generations:
Customers' Definition of Loyalty to a Store
· Baby Boomers were most likely to say loyalty equates to always visiting the same store when they have a need for service.
· The younger generations are more likely to cite loyalty as a sometimes rather than an always behavior.
·Slightly more than half of Millennials actually believe they are loyal even though they frequently visit competitors.
What these results really mean is that loyalty is more of a convenient activity rather than a commitment. Given this discovery, dealers are faced with a new challengeprevent their best customers from going elsewhere even if they show no signs of disloyalty, said Van Sach.
AutoLoop research further shows that dealers lose close to $1M per year of service spending from their current customers. Many dealers still use outdated, disconnected marketing programs with little to no coordination across media and touchpoints. To address the lost revenue opportunity, dealers need to dramatically rethink their marketing strategies, Van Sach added.
Full copies of the Automotive Digital Engagement study will be available at AutoLoops booth #4329 at NADA100, January 26-29 in New Orleans, LA. Or click here.
Van Sach will lead daily 15-minute sessions from Friday, 1/27, through Sunday, 1/29, on the AutoLoop stage, booth #4329.
The Value of Digital Engagement: 10:00AM
Bridging the Millennial Gap: 12:00PM
The New Customer Loyalty Landscape: 2:00 PM
Lead Conversion Strategies: 4:00PM (this session is not available on Sunday)