Automotive Customer Loyalty Drops Nearly 10 Percentage Points in 10 Years, According to Experian Automotive Data

Automotive Customer Loyalty Drops Nearly 10 Percentage Points in 10 Years, According to Experian Automotive Data

Inability to retain customers costs automakers billions

Costa Mesa, Calif., Aug. 13, 2008 — Automotive customer loyalty at the manufacturer level has dropped by 9.2 percentage points, from 49.1 percent in 1998, to 39.9 percent in 2008.  This is costing some automakers more than $3 billion in annual sales, according to Scott Waldron, president of Experian Automotive, a part of global information services company Experian.

Waldron released these findings during a presentation to a collection of leading manufacturers and marketing agencies at the ENG Automotive Customer Relationship Management Summit here today.  

“The current struggles in the auto industry make it more important than ever for automakers to keep the customers they have coming back to purchase another vehicle,” Waldron said.  “However, the increased number of available manufacturers and models make engendering customer loyalty a bigger challenge than ever before.  Automakers who have a firm understanding of what drives their customers to remain loyal will have a significant competitive advantage in this challenging market.”

Even a small rise in customer loyalty can lead to significant increases in revenue. As an example, a manufacturer with 10 million current customers will have approximately 1.5 million of those customers return to market in a given year.  A one-percentage-point rise in customer loyalty would produce 15,000 additional annual sales, or approximately $405 million in additional revenue, based on an average vehicle sale price of $27,000.00.  If this same manufacturer could improve loyalty performance by the 9.2 percentage points lost since 1998, they would generate an additional $3.726 billion in annual sales.

Waldron cautioned that traditional customer satisfaction scores are not always a reliable indicator of overall loyalty performance.  He said automakers need to understand how customer loyalty is influenced by several other factors, such as financing, warranty work and customer satisfaction with all dealership interactions.

“Generating customer loyalty is a far more complex process than simply scoring high on initial customer satisfaction surveys or just tracking whether a customer bought another vehicle of the same make,” Waldron said.  “Automakers need to factor in all of their customer touch points across the ownership lifecycle to understand the definition of loyalty that is specifically meaningful to their brands and their customers.”

Waldron added that truly effective loyalty programs begin with manufacturers who make their own internal data assets actionable by coupling that information with additional vehicle registration, consumer demographic and behavioral data, and analytic expertise from sources such as Experian Automotive.

“Automakers have incredible amounts of customer data from virtually every customer touch point,” Waldron said.  “Bringing that data together with Experian Automotive’s assets provides manufacturers with new capabilities in understanding and defining loyalty that drives from the corporate level down to the dealer and service level to reach and retain loyal customers and drive increased revenue.”

For more information on the ENG Automotive Customer Relationship Management Summit, please visit For more on Experian Automotive’s loyalty capabilities for the automotive market, visit or call 1 888 891 1191.

About Experian Automotive
Experian Automotive, a part of Experian, delivers information services to manufacturers, dealers, finance and insurance companies, and consumers. Experian® helps automotive clients increase customer loyalty, target and win new business, and make better lending and vehicle purchase decisions. Its National Vehicle Database, housing more than 500 million vehicles, along with Experian’s credit, consumer and business information assets, meets the industry’s growing demand for an integrated information source. Experian’s advanced decision support services help clients turn this information into improved business results. Experian technology supports several top automotive Web sites, including eBay Motors,, and For more information on Experian Automotive and its suite of services, visit our Web site at

Christopher Fielder
Experian Public Relations
1 224 698 8628 Telephone Email

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