Steve Momot

Company: Autohitch

Steve Momot

Autohitch

Oct 10, 2017

Brand Loyalty Decreases Over Time, But Maybe Not Dealership Profits.

Car Makers have always made large investments on ensuring that once you buy one of their vehicles you never consider anything else, and to accomplish this usually meant a focus, in part, on ensuring the buyer remained confident in their purchase and happy with their vehicle. But, is there a point at which that strategy begins to do more harm than good?

A recent KBB study on Brand Loyalty discovered that the longer someone holds on to a vehicle the lower the chances become that they will purchase from that same brand. Why? Well, KBB chose not to speculate but taking an educated guess, or maybe it’s just using a bit of common sense, the longer you drive a car increases the chances of mechanical wear, tear, and breakdown. At some point something is also going to break (Ironically)after the warranty for that specific problem ends, and who delivers that bad news? Usually the manufacturer.

As usual, this isn’t where the story ends. It should go without saying that although a customer holding on to a vehicle for a longer period of time is not good for sales, it is most certainly an opportunity for service, which is where dealers have shifted a significant amount of their focus as a result of shrinking upfront margins. The question, which obviously only the dealers themselves could answer, is: Is a consumer's value higher to dealers as a more frequent customer in the service department, or on the showroom floor? And if more profits are realized from service from long term car owners, is it worth losing them all together in the end? (Would love to hear Dealers opinions here)

The reality remains that there is apparently, somewhere, a “Point of No Return” along the journey of vehicle ownership as it relates to brand loyalty. Whether the Automakers or even the Dealers themselves can identify that time, or have any real control over it’s passing, may continue to remain to be seen or known until further research is completed.

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Steve Momot

Autohitch

Founder & CEO

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