CRM Activities Greatly Influencing New-Car Buyers
17 January 2000
CRM Activities Greatly Influencing New-Car Buyers Polk Study Reveals Finance and Relationship-Oriented Actions Impact the Most
DETROIT, Jan. 17-- Based on results of a study released
today by The Polk Company, auto manufacturers might want to take closer to
heart the old maxim that it is better to keep a current customer than find a
new one, by expanding their customer relationship management (CRM) activities.
An analysis of Polk's Manufacturer Loyalty Excelerator(TM) (MLEX) study
suggests that a significant sample of new-car buyers in 1999 reported that
they were influenced in their purchase decisions by CRM activities associated
with the vehicles they owned prior to their acquiring a new one. The new-car
buyers sampled reported being exposed to the following CRM efforts prior to
their purchase:
CRM EFFORTS EXPERIENCED PRIOR TO PURCHASE*
Activity % Experiencing Activity
1. Coupons for discounted service 81.0%
from the dealer
2. Maintenance reminder letters 79.1%
3. Personalized letters from the vehicle manufacturer 76.3%
4. Owner magazines 72.6%
5. Personalized letters from the dealership 66.9%
Source: Polk *First Six Months, 1999 Model Year
The same vehicle buyers also reported on the CRM efforts that made the
greatest impact on their purchase decision:
FIVE MOST INFLUENTIAL CRM EFFORTS *
Activity % Reporting Activity
Influenced Purchase Decision #
1. 800 numbers for questions 36.5%
2. Personalized letters from the dealership 35.8%
3. Owner magazines 34.4%
4. Promotional fliers from the dealership 34.0%
5. Newsletter from manufacturer 33.0%
Source: Polk *First Six Months, 1999 Model Year
#Includes those Strongly or Somewhat Influenced
Two of the five items that customers reported receiving the most
frequently (personalized letters from the dealership and owner magazines) were
also rated as being the most influential in new purchase decisions. The other
three activities reported as being influential, but not received as
frequently, were a toll-free number for questions, promotional fliers from the
dealership, and a newsletter from the manufacturer. Interestingly, two of the
most influential items (personalized letters from the dealership and
promotional fliers from the dealership) are at least partially under the
control of the dealer. The other three are much more under the domain of the
vehicle manufacturer.
Commenting on the study, Polk automotive analyst Lisa Wood said: "CRM
refers to the notion that it is better to build and maintain relationships
with customers rather than simply sell them the company's products. CRM is
apt to allow the customer to control the relationship, more so than
traditional marketing efforts. In fact, it is frequently referred to as
'permission marketing.'"
Wood said that although building a relationship might be more expensive in
the short term, auto manufacturers are seeing value in the long-term gains
that far outweigh the near-term costs. "Of course, CRM efforts are not
completely new to auto manufacturers, but they're certainly being expanded,
and the customer is playing a much larger role."
The Polk study indicates that CRM involves one-to-one marketing, requiring
manufacturers to be willing to customize. "An important component of what
level of individual treatment a customer receives can be based on the
predicted lifetime value of the customer," Wood said. "This refers to how
much revenue/profit can be associated with a given customer throughout the
entire customer interaction lifecycle."
Wood expanded to say that the lifecycle includes not only such things as
the number and types of vehicles customers acquire throughout their lifetimes,
but also includes items such as customers' tendencies to require warranty
work, their decisions about how to finance a vehicle and where they take it
for service. "The idea of lifetime value is both an essential and elusive
component of CRM, and the auto manufacturers are continually refining their
techniques for predicting this key element," the Polk analyst said.
Polk's Manufacturer Loyalty Excelerator (MLEX), the basis for these
findings, provides consumer behavior insight and was created to provide
household loyalty information to manufacturers at various levels. MLEX
determines loyalty percentages for the entire automotive industry, provides
cross-industry comparisons of loyalty behavior, and examines loyalty at
various levels, e.g., from the industry level down to the vehicle-line level.
The study measures loyalty throughout an entire model year to identify trends
as they occur in the industry.
Polk is a global company delivering multi-dimensional intelligence to the
auto industry to enhance the relationships consumers have with brands.
Through lifetime understanding of individuals, Polk helps clients maintain
current customers, win new ones and build their brand loyalty. Based in
Southfield, Mich., Polk is a privately held firm currently operating in
Australia, Canada, China, France, Germany, Holland, Spain, the United Kingdom
and the United States.
For more information, contact Dan Willis, Polk's director of public
relations, at 248-728-7827 or by pager at 800-406-8457.