Every business wants repeat customers, but not every business makes it a strategic priority. Recent research studies conducted of car-buying consumers discovered that approximately 60% of new car buyers will return to the same automaker for their next car, but some automakers enjoy greater customer loyalty than others. The difference is not by chance; instead, the automakers have given consumers reasons to be loyal.
The top ten automakers with greatest customer loyalty in descending order are:
1.) Ford
Ford enjoys the highest level of customer loyalty with slightly greater than 60% of Ford owners indicating they will return to Ford for their next car. Why? Primarily because Ford has such a broad line of vehicles – from the smallest, fuel-efficient, trendy models to the largest, most popular trucks and SUV’s. This means any customer can find a vehicle that meets their specific requirements. Selection is critical; if you can’t be the best, have the best selection.
2.) Mercedes Benz
This is the Ford of luxury vehicles – a very broad line of models including large commercial vehicles. Again, the luxury car buyer can find a car that meets their specific needs without going to another brand.
3.) Toyota
The middle-income buyer is interested in longevity, which is why Toyota has a loyal clientele. Toyota buyers want full and mid-size vehicles they can depend on for a decade or longer. Camry’s and Corollas are built for long use which is the basis of their customer loyalty.
4.) Nissan
Less expensive than Toyota, and has a broader product line.
5.) Chevrolet
Chevrolet has the largest volume sales and highest customer loyalty within the General Motors brands. They offer a very broad product line ranging from Corvettes to Suburbans. One reason their customer loyalty is lower than Ford is their competition within GM; every Chevrolet model has a competitor wearing another GM badge.
6.) Subaru
Subaru has a limited line of vehicles but they are in the most popular niches. Subaru has developed a cult-like following like Volvo and Saab had in the 1970’s. Subaru does not claim to be the best car or offer the best value; instead they differentiate themselves from other auto companies by making the “Subaru Love Promise,” which involves contributing to civic and ecological charities. 50% of Subaru owners are committed to buying a Subaru again.
7.) BMW
BMW has a similar cult following based upon performance and speed. They have a limited line that includes only a few SUV’s with the concentration on sport instead of utility.
8.) Honda
This brand has a very limited product line, and they are slow to change technology and styling, but they are very popular with women and represent a good value.
9.) Lexus
Lexus loyalty is based upon customer service and quality. They are built as well as a Mercedes, and as fast as a BMW, but their competitive advantage is customer service before and after the sale. For this reason, Lexus RX 350 is the most popular SUV in the world, and very popular with women buyers.
10.) Hyundai
Hyundai is buying customers with greater value. Several of their models come with 10-year warranties, and all their models include more features than competitive models and cost less.
The takeaway is that auto companies with loyal customers have given their customers a solid, tangible reason to be a return customer. Many funeral businesses want return customers, but have not made it part of their long-term business strategies. Building long-term loyalty means eliminating reasons why families would consider another funeral firm:
- Change in ownership. Consolidation is a reality in our industry, but acquisition will cause families to select another firm.
- Not offering families what they consider important, such as on-site crematory, reception rooms, or novelty hearses.
- Staff turnover: the second most common reason for preferring a funeral home is knowing a staff member.
- Incompetent staff that fail to meet the customer’s expectations of professionalism and creativity. One of the factors contributing to the increasing cremation rate is the failure of staff members to meet families’ desire for creative, personalized services. Frustrated affluent families decided to hold memorial services at country clubs and other alternative locations.
- Out-of-date facilities or poor locations. There was a death care industry building boom in the 1980’s, 1990’s, and presently – all caused by changing downtown populations. Funeral businesses that expect their families to return to the old neighborhood will be very disappointed.
- Affordability: the rise of discount funeral homes has caused consumers to think more about price. Because price advertising from the discounters has been so direct, many funeral home owners feel their advertising should not include prices. The objective of price advertising is to educate the consumer as to your affordability, which is very different than trying to get customers purely on price. Hyundai buyers don’t start out at Mercedes dealerships. Instead, they start out at Honda or move up from the used car lot. Funeral homes need to move families up from the discount funeral homes before they become accustomed to the lower level of service and become return customers.
Summary:
Car buying and funeral service are analogous, as both represent major consumer purchases for the middle-income family. They both offer the opportunity to save thousands of dollars, which can represent a significant percent of their annual income. Because the auto industry is so much larger than death care, we can learn much about long-term marketing strategies.
When lamenting the passing of customer loyalty, the change isn’t so much with the customer as it is with the business. If we want the customer to be loyal, we need to give them tangible reasons to return. The first step is to understand why families prefer your firm and why they prefer a competitor. This information can be difficult to gather without consumer research, but without consumer data, it can be impossible to create productive long-term plans.
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