Luxury car buyers are satisfied but not necessarily loyal

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By: Wise Marketer Staff |

Posted on August 24, 2001

The average luxury car sells for more than US$70,000, but according to the Polk Automotive Awards this year many customers don't remain loyal to a brand or dealer. Average loyalty ratings in the prestige luxury class (measured by the number of households replacing a car or buying a second car from the same maker) were under 20%. This indicates hundreds of thousands of potential sales are lost from customers over the course of their car-buying years. And it doesn't stop there. Not only are customers defecting in hordes when it come to buying a new car, they are also switching to non-dealer servicing when their warranties are up.

According to the J.D. Power and Associates 2001 Customer Service Index (CSI) Study, car dealers are now having a tougher time trying to handle all vehicle service requests within a reasonable timeframe. "Record sales posted over the past two years, plus dealer downsizing efforts in some franchises, are making it difficult to get vehicles in for service," said Joe Ivers, partner and executive director, quality and customer satisfaction research.

In one way, the car dealers are becoming prey to their own success. Record sales mean full service bays, and long lines at dealerships. This means that customers, quite early on in their ownership of a car, get the impression that the dealers do not need their business. And even though dealer service satisfaction is up overall, the accessibility of service is becoming the differentiator.

Clearly, those dealers that become known for inconvenience during these 'boom' times are the ones who will see greater defection to non-dealer service facilities when customers' warranties end and they start paying for their repairs. Dealers who make the service intake process easy, on the other hand, enjoy the highest levels of customer satisfaction, according to the study.

Fixed on first visit
For the fifth year in succession, by providing exceptional treatment in making it easy to obtain appointments,  almost always fixing vehicles on the first visit, and providing amenities that delight and please their customers, Lexus ranks highest in Customer Satisfaction with Dealer Service among all major automotive marques.  Closely following Lexus in the ranking is Saturn, which also finished just behind Lexus in 2000. General Motor's luxury marque Cadillac moved up four rank positions from 2000, to third position.

Show customers they are valued
One sure-fire way of keeping customers is to show them that they are valued. A customer who feels valued will make allowances for occasional lapses that an unvalued customer will not. And one way of showing customers that they are valued is to actually recognise them and to have some idea of their needs and preferences, and show that they are not beginning from the beginning each time they call.

All very well, but in today's environment of rapidly churning employees, how can that be done? One way would be to use technology.

Help from technology
BluStor is a new customer loyalty system that would help in this instance. According to BluStor's Chief Technology Officer, Bill McDaniel: "My partner and I spent more than $300,000 on luxury cars in the past three years, yet the dealerships have no idea who we are. A dealership using BluStor will always know who their customers are and the current status of their car the minute they pull into the service drive."

The system uses Bluetooth wireless technology and the web-enabled BluStor Gatekeeper to recognise customers as soon as they enter the business environment. The BluStor system notifies the Service Writer automatically as soon as a customer pulls into the dealership and he or she has instant access to the complete customer history and preferences. The sales force is alerted and provided with a current situation analysis that lets them know how long the customer has had the car, their favourite colours and options, current lease or purchase status, and even the owner's birthday.

In a store environment, BluStor uses a small tag, hung on the customer's key chain or carried in a purse or pocket. It may even be the customer's mobile phone or personal digital assistant (PDA). Every time the customer enters the store, the BluStor tag receives an electronic query from the sales desk. It responds with a code unique to the customer, whose profile is accessed on the store's secure BluStor network. A short profile on the customer can then be forwarded to sales associates carrying PDAs.

J.D. Power:
BluStor:   or: