Interesting retention "study"
12-14-2005, 07:13 PM
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Interesting retention "study"
I found this article on clublexus and thought it rather thought provoking.
Tell me your thoughts on this fellas....
Mine are that it doesn't give the exact methodology of how they went about determining their results. What brands were studied, all, some, who?
Interesting, nonetheless.
WESTLAKE VILLAGE, Calif.: 8 December 2005 — Lexus leads the industry in retaining the highest percentage of new-vehicle owners, according to the J.D. Power and Associates 2005 Customer Retention StudySM released today.
The study, now in its third year, measures the percentage of new-vehicle buyers and lessees who replace a vehicle that was previously purchased new with a new vehicle from the same nameplate. With a 3.5 percentage-point increase from 2004, Lexus ranks highest, retaining 63.0 percent of its customers. The industry average is 49.6 percent.
Lexus is followed in the rankings by Toyota (62.6%), Honda (59.9%), Chevrolet (57.3%) and Hyundai (56.3%), respectively.
"By satisfying its customers on many different levels, Lexus consistently enjoys high retention rates," said Neal Oddes, director of product research at J.D. Power and Associates. "Customer retention is extremely valuable in the auto industry because it costs manufacturers less to keep existing customers than to attract new ones, and strong retention fosters favorable word of mouth."
Although Suzuki retains just 28.6 percent of its customers, the brand records the greatest improvement, increasing its retention rate by 38 percent from 2003, which was the inaugural year of the study. Acura is also enjoying strong increases in retention rates, improving 25 percent from 2003 to retain 45.7 percent of its customer base in 2005.
"Suzuki has made tremendous strides in better retaining its customers, due partly to the fact that it has expanded its lineup to include more segments of the market, which offers buyers a wider variety of models in different segments as their needs and wants change over time," said Oddes. "Suzuki has also been focusing heavily on quality, improving its performance in the J.D. Power and Associates Initial Quality StudySM by 35 percent over the past five years."
The study finds that quality and customer service experiences play key roles in influencing customer retention. About 23 percent of respondents did not buy a vehicle from the same brand because they felt that too many things went wrong with their previous vehicle. In fact, the nameplates with the fewest customers leaving for this reason also performed relatively well in the J.D. Power and Associates 2005 Vehicle Dependability Study,SM which measures problems experienced during the first three years of ownership.
Experiences with the dealer service and sales departments also have an important impact on whether customers return to the brand when they are in the market to buy a replacement vehicle. Nameplates performing well in the firm’s 2005 Customer Service Index (CSI) Study, which measures satisfaction with the service department, and the 2005 Sales Satisfaction Index (SSI) Study, which measures satisfaction during the new-vehicle sales process, tend to have relatively few customers who cite poor service as a reason for defecting to another brand.
"Although acquiring new customers is an integral part of any OEM’s strategic plan, strong nameplate retention is essential to grow and expand its customer base over time," said Oddes. "Manufacturers cannot underestimate the power of excellent service and short- and long-term quality in convincing their customers to come back to the brand time and again."
The 2005 Customer Retention Study is based on responses from 177,941 new-vehicle buyers and lessees, of which 106,275 replaced a previous vehicle that was originally acquired new.
Tell me your thoughts on this fellas....
Mine are that it doesn't give the exact methodology of how they went about determining their results. What brands were studied, all, some, who?
Interesting, nonetheless.
WESTLAKE VILLAGE, Calif.: 8 December 2005 — Lexus leads the industry in retaining the highest percentage of new-vehicle owners, according to the J.D. Power and Associates 2005 Customer Retention StudySM released today.
The study, now in its third year, measures the percentage of new-vehicle buyers and lessees who replace a vehicle that was previously purchased new with a new vehicle from the same nameplate. With a 3.5 percentage-point increase from 2004, Lexus ranks highest, retaining 63.0 percent of its customers. The industry average is 49.6 percent.
Lexus is followed in the rankings by Toyota (62.6%), Honda (59.9%), Chevrolet (57.3%) and Hyundai (56.3%), respectively.
"By satisfying its customers on many different levels, Lexus consistently enjoys high retention rates," said Neal Oddes, director of product research at J.D. Power and Associates. "Customer retention is extremely valuable in the auto industry because it costs manufacturers less to keep existing customers than to attract new ones, and strong retention fosters favorable word of mouth."
Although Suzuki retains just 28.6 percent of its customers, the brand records the greatest improvement, increasing its retention rate by 38 percent from 2003, which was the inaugural year of the study. Acura is also enjoying strong increases in retention rates, improving 25 percent from 2003 to retain 45.7 percent of its customer base in 2005.
"Suzuki has made tremendous strides in better retaining its customers, due partly to the fact that it has expanded its lineup to include more segments of the market, which offers buyers a wider variety of models in different segments as their needs and wants change over time," said Oddes. "Suzuki has also been focusing heavily on quality, improving its performance in the J.D. Power and Associates Initial Quality StudySM by 35 percent over the past five years."
The study finds that quality and customer service experiences play key roles in influencing customer retention. About 23 percent of respondents did not buy a vehicle from the same brand because they felt that too many things went wrong with their previous vehicle. In fact, the nameplates with the fewest customers leaving for this reason also performed relatively well in the J.D. Power and Associates 2005 Vehicle Dependability Study,SM which measures problems experienced during the first three years of ownership.
Experiences with the dealer service and sales departments also have an important impact on whether customers return to the brand when they are in the market to buy a replacement vehicle. Nameplates performing well in the firm’s 2005 Customer Service Index (CSI) Study, which measures satisfaction with the service department, and the 2005 Sales Satisfaction Index (SSI) Study, which measures satisfaction during the new-vehicle sales process, tend to have relatively few customers who cite poor service as a reason for defecting to another brand.
"Although acquiring new customers is an integral part of any OEM’s strategic plan, strong nameplate retention is essential to grow and expand its customer base over time," said Oddes. "Manufacturers cannot underestimate the power of excellent service and short- and long-term quality in convincing their customers to come back to the brand time and again."
The 2005 Customer Retention Study is based on responses from 177,941 new-vehicle buyers and lessees, of which 106,275 replaced a previous vehicle that was originally acquired new.
12-15-2005, 10:13 AM
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BMW is selling more cars globally now then MB! 
Last edited by konigstiger; 07-01-2006 at 06:31 PM.
12-15-2005, 10:25 AM
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Konigstiger- I'm sure you can relate with my thoughts on this in regards to the article. To me it's like people that move to Arizona and complain about the heat, my response to them, move, there are too many people here anyhow and you are crowding me. Bad news I suppose for MB but I like the fact that I don't see an MB on every corner. BMW's seem to be everywhere.
12-15-2005, 10:49 AM
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Originally Posted by RickyE430
Bad news I suppose for MB but I like the fact that I don't see an MB on every corner. BMW's seem to be everywhere.
As far as not seeing a MB on every corner I got to disagree, Scottsdale is literally carpeted with MB, and of course BMWs too. That’s why I have the CLS they’re on the street but not with every glance.
12-15-2005, 11:41 AM
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I'm sure MB will...I think they've started already, but the results will take a few years to catch up in the "polls" and "scientific studies."
On BMW's free maintenance...my buddy at work just ooohs and aaaahs over the free maintenance of his new 3 series Bimmer. Then I told him that it maybe amounted to $500 during the course of 3 to 4 years that he would actually own the car. I stole his thunder and then made matters worse when I told him he shoulda invested that $500 in Google stock and made $1000 in the process, thusly getting more than just free oil changes!
Ah well...BMW makes a nice car, just not quite my speed. Besides, his 3 series has literally 3 inches of backseat kneeroom. Pathetic at best. I hated it.
On BMW's free maintenance...my buddy at work just ooohs and aaaahs over the free maintenance of his new 3 series Bimmer. Then I told him that it maybe amounted to $500 during the course of 3 to 4 years that he would actually own the car. I stole his thunder and then made matters worse when I told him he shoulda invested that $500 in Google stock and made $1000 in the process, thusly getting more than just free oil changes!
Ah well...BMW makes a nice car, just not quite my speed. Besides, his 3 series has literally 3 inches of backseat kneeroom. Pathetic at best. I hated it.
12-15-2005, 11:44 AM
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Curious as to where MB actually ranks in this study. Inquiry sent however got an out of office auto reply from Oddes who returns 12/19.
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12-15-2005, 12:22 PM
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The article certainly reflects my experience in regards to Lexus and BMW....and Mercedes. I have/do own all 3 models and I would buy another Lexus in a minute. Though BMW quality has been excellent in all reqards, I still have a problem with the Bangleized styling. I'm still waiting for significant improvement in quality out of Mercedes.
12-15-2005, 12:32 PM
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Wanna see some bad quality, you should see my wifes new X-Type Jaguar. Though the engine performance is very good in my opinion.....the interoir quality is terrible. I understand it's an entry level model but it truly is a Ford. Of course none of that mattered to her, it's all about the " pretty " factor.
-side note. Interior room is great in the Taurus, I mean Jag
-side note. Interior room is great in the Taurus, I mean Jag
Last edited by RickyE430; 12-15-2005 at 12:33 PM. Reason: additional info
12-15-2005, 01:18 PM
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Originally Posted by RickyE430
Wanna see some bad quality, you should see my wifes new X-Type Jaguar. Though the engine performance is very good in my opinion.....the interoir quality is terrible. I understand it's an entry level model but it truly is a Ford. Of course none of that mattered to her, it's all about the " pretty " factor. -side note. Interior room is great in the Taurus, I mean Jag
12-15-2005, 03:35 PM
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I don't like the Jags at all...they look good, catch your eye, then when you start looking closer, they get uglier to me. Just my preference, don't shoot me! 
CLS's are pretty awesome whips. I don't think I could look through the small windows though, I like some glass....
S500 is probably the next adventure, although it's a few years coming. That will be the wife's ride to replace the E320, which, is awesome!!
CLS's are pretty awesome whips. I don't think I could look through the small windows though, I like some glass....
S500 is probably the next adventure, although it's a few years coming. That will be the wife's ride to replace the E320, which, is awesome!!
12-15-2005, 04:13 PM
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It looks like Mercedes is now getting passed by Audi in Europe as well. I found this article on autoblog:
15 December2005 ITV Motoring
Mercedes Trails Audi And BMW
(Tue 13 Dec 05)
Audi and BMW are running very close in the race for sales in two premium market segments in Europe. Audi's A4 has overtaken the BMW 3-Series in the lower-premium sector for the year to October, while the A6 and the 5-Series each has a roughly even chance of being the top seller among medium-premium cars for 2005.
Both manufacturers have moved well ahead of Mercedes-Benz, whose fortunes have been dropping sharply. Sales of the E-Class have falled by 28.4% compared with the first ten months of 2004, while the C-Class has also fallen behind the equivalent Audi and BMW.
The public perception of Mercedes as a quality manufacturer has taken a big hit after well-publicised electronic failures which have led to several recalls. Insiders say that the company is taking note - next year's revision of the E-Class, whose most publicised features will include a facelift and more powerful engines, also involves replacing the high-tech by-wire braking system (the subject of two recalls) with more conventional hydraulic brakes.
15 December2005 ITV Motoring
Mercedes Trails Audi And BMW
(Tue 13 Dec 05)
Audi and BMW are running very close in the race for sales in two premium market segments in Europe. Audi's A4 has overtaken the BMW 3-Series in the lower-premium sector for the year to October, while the A6 and the 5-Series each has a roughly even chance of being the top seller among medium-premium cars for 2005.
Both manufacturers have moved well ahead of Mercedes-Benz, whose fortunes have been dropping sharply. Sales of the E-Class have falled by 28.4% compared with the first ten months of 2004, while the C-Class has also fallen behind the equivalent Audi and BMW.
The public perception of Mercedes as a quality manufacturer has taken a big hit after well-publicised electronic failures which have led to several recalls. Insiders say that the company is taking note - next year's revision of the E-Class, whose most publicised features will include a facelift and more powerful engines, also involves replacing the high-tech by-wire braking system (the subject of two recalls) with more conventional hydraulic brakes.
12-15-2005, 07:35 PM
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Yeah, I'm not a fan of the Jag's either. She chose a real nice baby blue metalic paint. The car screams FEMALE DRIVER. PHXATC- She's the one driving down the 202 doing 80 putting on makeup in the mornings 
Needless to say, she doesnt drive my car
Needless to say, she doesnt drive my car
Last edited by RickyE430; 12-15-2005 at 07:39 PM.
12-15-2005, 08:53 PM
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was '03 E320 - now - '04 S4
Rented an X-Type last month. Definitely not my cup of tea. Really felt cheap. Lots of other cars that would make me happier at that price point.
Rented an Infiniti QX56 today in Spokane. Nice rig. I was expecting to get a Subaru Outback so that was a nice upgrade. Everything was nice except for the interior. Still not on the same level as Audi, M-B or Lexus. Even Acura interiors smoke the Infiniti interiors.
As far as the repeat customer thing goes - I would buy another Lexus without hesitation if they build something that really interests me. Right now there isn't one that is moving me to a purchase.
If/when the IS460 Coupe comes out - that'll be the likely next Lexus in the family.
I do hope M-B gets the focus back on quality. Until I read that story in the WSJ this morning I didn't realize that M-B's sales were taking that much of a hit.
Rented an Infiniti QX56 today in Spokane. Nice rig. I was expecting to get a Subaru Outback so that was a nice upgrade. Everything was nice except for the interior. Still not on the same level as Audi, M-B or Lexus. Even Acura interiors smoke the Infiniti interiors.
As far as the repeat customer thing goes - I would buy another Lexus without hesitation if they build something that really interests me. Right now there isn't one that is moving me to a purchase.
If/when the IS460 Coupe comes out - that'll be the likely next Lexus in the family.
I do hope M-B gets the focus back on quality. Until I read that story in the WSJ this morning I didn't realize that M-B's sales were taking that much of a hit.
12-16-2005, 09:22 AM
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Originally Posted by RickyE430
Yeah, I'm not a fan of the Jag's either. She chose a real nice baby blue metalic paint. The car screams FEMALE DRIVER. PHXATC- She's the one driving down the 202 doing 80 putting on makeup in the mornings
Needless to say, she doesnt drive my car
Needless to say, she doesnt drive my car
She just blends in with the rest!
12-19-2005, 03:18 PM
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Mercedes-Benz ranked 8th with a retention rate of 52.6%, three percentage points above the industry.
http://www.jdpower.com/news/releases...asp?ID=2005249
http://www.jdpower.com/news/releases...asp?ID=2005249
12-19-2005, 04:26 PM
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Originally Posted by konigstiger
Mercedes-Benz ranked 8th with a retention rate of 52.6%, three percentage points above the industry.
http://www.jdpower.com/news/releases...asp?ID=2005249
http://www.jdpower.com/news/releases...asp?ID=2005249
Thanks for the link.........and Merry Christmas to all.
12-19-2005, 05:15 PM
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Originally Posted by konigstiger
As far as not seeing a MB on every corner I got to disagree, Scottsdale is literally carpeted with MB, and of course BMWs too. That’s why I have the CLS they’re on the street but not with every glance.
It even used to be that out here on the "west side" we were rare.. and in my own 200 home neighborhood, there are 3 E, an SL, 2 ML's, a R and 2 S's... ubiquitous is a strong word, but it's not like it was in the 80's when you saw an S class and had to look inside to see who that "rich guy" was driving it
Lexus is a great brand, smart business model, and reliable car.. MB can learn a lot from them.. but the don't need to learn how to engineer and build cars, as I find the way lexus does that part to be just a bit bland, and without zest.
12-20-2005, 08:00 AM
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For Mercedes, of course, it's important that they have higher volume as they want/need the sales as a company. For me as a buyer, it's never been important that the car was the #1 sales leader - I agree that I really liked not seeing E-classes all over the place - still to this day when I see one it catches my eye!
Also, losing sales over the "perception" of quality versus actual quality issues are two different things - the first can hurt resale values regardless of the truth, the later is a major issue that I think Mercedes has addressed and will continue to do so.
Also, losing sales over the "perception" of quality versus actual quality issues are two different things - the first can hurt resale values regardless of the truth, the later is a major issue that I think Mercedes has addressed and will continue to do so.
12-20-2005, 12:34 PM
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Originally Posted by ricky.agrawal
At least we know Mercedes as a corp. is making changes internally to bring up quality levels!
12-20-2005, 12:39 PM
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'05 E320 CDI, '08 BMW X5 4.8i, '11 Duramax 2500HD
Originally Posted by rjm
The Study cited has nothing to do with Quality Levels....it deals with Owner Retention.
12-20-2005, 03:15 PM
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Originally Posted by CE750
to be fair, I would think the two are directly related.. no?
I don't think think so Sam. The Intitial Quality Study deals with the quality of the product, while the Owner Retention Study deals with how many owners will buy the same car again. The focus of the 2 studies are entirely different, as are the results. Because you choose to buy the same brand of car a 2nd time does not necessarily mean the car is a "quality" product...it means you like the nameplate, the prestige, or the history of the product...it doesn't necessarily reflect the quality of the product.
