General Motors and Ford were the top winners in the 21st annual Automotive Loyalty Awards presented by IHS Markit.
Winners in more than 30 categories were recognized Tuesday evening, including General Motors for the top award, “Overall Loyalty to Manufacturer” and Ford brand for “Overall Loyalty to Make.”
For GM, the Chevrolet Volt, GMC Yukon Denali XL and the Cadillac brand were also honored. Cadillac earned the “Most Improved Super Loyalist” award. Super Loyalists are customers who make three consecutive brand purchases. The Chevrolet Volt and GMC Yukon Denali XL each received the top award in their segment for loyalty.
Automotive manufacturers and brands were recognized for superior customer retention and conquest efforts during the 2016 model year (October 2015 through September 2016). IHS Markit analysis found that with 17.5 million new vehicle registrations during the 2016 model year, 52.8% of customers returned to market to purchase another vehicle from the same make they already owned. This represents a record loyalty rate and an increase of 1.3 percentage points from last year.
The awards highlight the ongoing successes of automakers and brands that continue to win back customers in a “hyper-competitive environment,” says Joe LaFeir, senior vice president, automotive, for IHS Markit.
With the plateauing of the U.S. new vehicle market, there is an increase in the level of competition among automakers and brands. At the same time, loyalty rates to these manufacturers and brands are at all-time highs while incentive spending is also at record highs, with loyal customers receiving increased customer cash to repurchase, up 1 percentage point of the vehicle transaction price since 2014.
IHS Markit has developed new tools to help automakers and marketers improve the efficiency of owner retention. Advanced analytics from IHS Markit provide insights into consumer loyalty behavior.
When advising marketing leaders from across the industry, IHS Markit can now identify three distinct customer types — super loyalist, loyalist and nomads. Super loyalists are consumers who have a history of multiple repeat purchases and are the most likely to repurchase from the same manufacturer. Loyalists are consumers with a repeat purchase, and nomads show no identifiable loyalty patterns to any manufacturer.
“Insights from these three populations now help manufacturers be more targeted and efficient with marketing efforts, and more informed when making critical marketing decisions, including incentive spending,” said Steve Had, vice president, sales and marketing solutions, IHS Markit.
Of the three populations, super loyalists are the smallest in size but tend to be the most loyal, repurchasing with the same manufacturer 76% of the time. Nomads, on the other hand, tend to be the largest in population size, but only stay loyal 52% of the time.
Ford achieved the highest loyalty rate of all makes during the 2016 model year, winning the Overall Loyalty to Make award. The award for Highest Conquest Percentage for the 2016 model year went to Jeep.
The Ford (brand) was honored for highest Ethnic Loyalty to Make among all ethnic groups combined, while it also led in loyalty among African American consumers. Toyota was awarded for loyalty success with Hispanic consumers, while Mercedes-Benz achieved highest loyalty among Asian consumers.
Tesla was honored for Most Improved Loyalty to Make for the model year, and Most Improved Super Loyalists went to Cadillac, and Volvo was recognized for Most Improved Conquest Percentage during the 2016 model year.