General Motors took home the top prize in IHS Markit’s Loyalty Awards for the second consecutive year. The award was given out during the 2017 Automotive News World Congress on Tuesday evening.
The company earned the “Overall Loyalty to Manufacturer” title for the 2016 model year. Ford Motor Co. had earned that distinction five years in a row before GM ended Ford’s streak last year.
While Ford didn’t land the biggest award, it captured the “Overall Loyalty to Make” title for the seventh consecutive year.
“GM has done an increasingly great job as a company at retaining those folks that buy time and again,” Steve Had, IHS Markit’s vice president of sales and marketing solutions, told Automotive News. He added, “They bring those folks who are loyal to the brand and turn them into super loyalists.”
Had said GM also is effective at using data on current customers, such as their segment and brand preferences within its portfolio, to inform the company’s communications with them.
IHS Markit honored automakers for “superior customer retention and conquest efforts” during the 2016 model year, defined as the period from October 2015 to September 2016. IHS Markit recognizes manufacturers in a number of categories, including highest conquest percentage, ethnic market loyalty to make and most improved loyalty to make.
Tesla earned the “most improved loyalty to make” award, while Volvo won the “most improved conquest percentage” title.
IHS Markit has identified three consumer types that automakers deal with: super loyalist, loyalist and nomad.
The super loyalists, IHS Markit says, have a history of repeat purchases and are most likely to repurchase from the same manufacturer. They repurchase from the same automaker 76 percent of the time.
Loyalists are consumers with repeat purchases, while nomads don’t show any “identifiable loyalty patterns” to any automaker, IHS Markit said. Nomads remain loyal 52 percent of the time.
Loyalty still sways consumers in a big way. During the 2016 model year, IHS Markit said a record 52.8 percent of customers returned to market to purchase another vehicle from the same make they already owned -- a 1.3 percentage point jump from the previous year.
“As an industry, we’re starting to say, ‘Valuable customers are worth holding onto. Let’s do the things that help us do more of that,’” Had said.
While loyalty rates for automakers are at all-time highs, IHS Markit said incentive spending is also at record levels.
In an interesting finding, Had said incentive spending is increasing for loyal customers faster than it is for prospects that are being conquested. Super loyalists, who are most likely to return to the brand, are being given the most customer cash as they come back to repurchase.
“At some point, to grow, you’ve got to cultivate the rest of the customer base as well,” Had said. “Maybe you offer the folks that aren’t coming into your brand and have a certainty of buying a higher amount of visible cash.”
Jeep had the highest conquest percentage thanks to its understanding of the factors that drive segment consideration.
“They do a great job of reaching out to consumers that they don’t necessarily have a relationship with, but they’re saying something that’s relevant,” Had said. “They’ve used a lot of data to uncover who might be interested in the vehicles in their portfolio and building out smart, targeted approaches for reaching out to these prospect customers.”