General Motors wants to increase its customer loyalty from the current industry average of around 52-53% to the industry leading level of 58% enjoyed by Toyota.
The reason is simple. “We believe a single percentage point improvement in sales retention is about 25,000 vehicles, or about US$700m in revenue annually, so it’s a pretty big financial incentive,” GM global product development chief Mary Barra told reporters in Michigan.
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And she wants even higher loyalty rates, citing Apple and FedEx as examples. Apple enjoys a 90% customer return rate, according to industry estimates, which helps give a very strong financial platform akin to those enjoyed by subscription companies.
“We believe in the auto industry no one really stands out as the clear winner in managing that overall customer experience,” Barra said. “We see this as a true opportunity to really create a differentiated place for General Motors and we’re working very hard in that direction. We’ve got more work to do.”
She admitted that GM had been too internally focused, cutting warranty costs by 50% over the last five years, for example, but that internal success didn’t help consumers when setting out to buy a new car who were more likely to be swayed by various consumer reports.
“We’re also changing the way we benchmark and decide how we’re going to design and engineer our vehicles with a much stronger focus on external, third-party measurements,” Barra said. “There have been times when we had success beating our internal objectives only to be disappointed when we got the actual customer feedback from some of these third-party rankings.”
