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AutoLoop 2016 Automotive Digital Engagement Study Finds Declining Loyalty Among Modern Vehicle Owners

Study Uncovers Wide Disparity in Meaning of Customer Loyalty to Baby Boomers, Gen X & Millennials

CLEARWATER, FL – January 24, 2016 – AutoLoop LLC, the leading provider of auto industry marketing and customer relationship management solutions that successfully drive the Sell, Service, Repeat cycle, today announced the results of its 2016 Digital Engagement (ADE) study which uncovered new insights into the value of engagement for auto dealers. 

In late 2016, AutoLoop commissioned the Automotive Digital Engagement (ADE) study to better understand how digital media impacts customer loyalty and to identify new strategies for dealers to engage and retain their customers. AutoLoop surveyed a national sample of 1,000 auto consumers and analyzed the purchase behavior of over 4 million customers representing 1,000 dealerships from across the U.S. The study found that a digital revolution is sweeping the auto industry and it could be troublesome for some dealers if they don’t rethink their current marketing strategies and catch up with the digital world.

According to Doug Van Sach, AutoLoop’s Vice President of Analytics and Data Services, dealers should be prepared to survive a customer loyalty decline. “Today, the Big 3 automakers account for only 44% of the market – a 26% decline from two and a half decades ago. In this short amount of time, consumer loyalty is no longer within reach, as the average customer retention rate across the industry has sunk below 50%. This amounts to dealers losing more than half of their customers each year. While increased competition and online pricing is partially to blame for the decline in loyal consumers, a critical factor is the changing mindset of the U.S. consumer. The hard truth for dealers is that most consumers have redefined what it means to be loyal in the digital age,” Van Sach stated.

How the meaning of loyalty has changed:

In surveying 1,000 vehicle owners from across the U.S. to better understand their mindset towards loyalty, AutoLoop was surprised to learn 62% of consumers actually consider themselves loyal to an automotive service center despite the low retention rate for the average dealer. To further define the gap between consumers’ attitudes and their actions, AutoLoop dug deeper. When customers were asked what loyalty means to them, it became clear that there is a split among generations:

Customers' Definition of Loyalty to a Store

Customer Loyalty Blog Img

• Baby Boomers were most likely to say loyalty equates to always visiting the same store when they have a need for service.

• The younger generations are more likely to cite loyalty as a “sometimes” rather than an “always” behavior.

• Slightly more than half of Millennials actually believe they are loyal even though they frequently visit competitors.

“What these results really mean is that loyalty is more of a convenient activity rather than a commitment. Given this discovery, dealers are faced with a new challenge–prevent their best customers from going elsewhere even if they show no signs of disloyalty,” said Van Sach.

“AutoLoop research further shows that dealers lose close to $1M per year of service spending from their current customers. Many dealers still use outdated, disconnected marketing programs with little to no coordination across media and touchpoints. To address the lost revenue opportunity, dealers need to dramatically rethink their marketing strategies,” Van Sach added.

Full copies of the Automotive Digital Engagement study will be available at AutoLoop’s booth #4329 at Nada100, January 26-29 in New Orleans, LA. Or click here to download a copy now. Van Sach will also present the study findings each day at the AutoLoop NADA booth at scheduled times. Click here to schedule a time to attend the presentation.

To learn more about how to optimize the Sell, Service, Repeat cycle though AutoLoop’s full customer engagement suite, call 877-850-2010 or visit AutoLoop.com.

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About AutoLoop: 

Since 2005, AutoLoop has helped automotive dealerships nationwide increase sales, improve client retention and achieve overall higher customer satisfaction ratings throughout the Sell, Service, Repeat cycle. With the AutoLoop Customer Engagement Suite—an all-encompassing platform that includes everything from CRM and automated messaging to equity mining, service scheduling and more—AutoLoop is the industry’s first and only single-vendor, end-to-end marketing and engagement solution. An Inc. 500 company with nearly 50 million names in its database and over a billion individual communications initiated, AutoLoop is passionate about being America's best customer retention partner for progressive dealerships