I think this is a blip, but there’s no doubt it’s a big, black blip.
The latest JD Power Customer Retention Survey shows what 12-18 months of overwhelmingly negative news, uncertainty and a damning news cycle can do in a market that’s big on leasing and regular turnover. Leasing can be great because it makes it easier for a customer to buy, but it also makes it easier for a customer to change and for Saab, the proof lies in the chart below.
As you can see, Saab comes in dead last with a customer retention figure of just 4%. This is disastrously low, especially for a brand that prides itself so much on the loyalty and love of former owners.
Now in its eighth year, the study measures the rate at which automotive brands retain their existing customers and the reasons why owners remain loyal. Customer retention is critical to a brand’s market success, particularly during the current period of slow recovery, in which each new-vehicle sale is vital.
The study finds that the importance of fun-to-drive vehicles as a reason for owner loyalty has increased by eight percentage points in 2010, compared with 2009. Meanwhile, the importance of resale value as a reason to stay loyal has decreased by 10 percentage points from 2009.
From what we know of the news stories surrounding Saab for all of 2009 and most of 2010, “Fun to Drive” was probably not so important for Saab customers as “Is the company still alive?”
The 2010 Customer Retention Study is based on responses from 123,601 new-vehicle buyers and lessees, of which 81,350 replaced a vehicle that was previously acquired new. The study was fielded between February and May and August and October 2010.
This is an especially bad result, but I regard it as a blip because it has to be viewed against a backdrop of extraordinary circumstances.
As mentioned earlier, Saab most likely lost a whole cycle of leasing customers between mid-2009 and mid-2010 and the struggle for Saab to get the word out about their very existence in the USA has been well documented here in the last couple of weeks.
I guess it just highlights exactly how much work has to be done. Yes, we need more Steve and Lori’s in this Saab world, but Saab also needs to get the message out to them with compelling product offerings and effective marketing.