Vehicle brand retention is 43.7% in the U.S. By definition, to keep your sales numbers flat, you are constantly conquesting new customers more than retaining existing ones. How do you keep your retention as high as possible, and where do you look to conquest other brands?
Using data compiled from vehicle deals closed last year, a few insights stand out to help you accomplish these things:
Insight 1: Brand Retention Rates Are Rising
The 43.7% retention rate is not good. Even 60.1% retention for the leading brand, Toyota, is not good. That said, it’s actually trending in the right direction.
Over 73% of brands saw an increase in brand retention in 2023 compared to the year before. So why’s that important?
Consumers can often find cars from multiple brands that fit what they’re looking for in terms of vehicle type, features, price range and more. Despite that, more are staying with their existing make. For your dealership, this can be a huge leg up when it comes to securing repeat customers.
Every interaction you have with a customer is an opportunity to work on relationship-building. The more you can curate a list of positive experiences, the easier it will be to bring customers back for future purchases.
Insight 2: Successful Conquest Opportunities Have a Pattern
Some of your customers will inevitably shop elsewhere for their next vehicle. The good news is there are plenty of drivers in competitive makes for you to go get. You just need to know who to target.
While you certainly have obvious targets: With their large market share, Toyota, Chevrolet and Ford are good opportunities for nearly every brand (with the surprising exception that Chevrolet is not a favorable conquest target for Mazda dealers). There are also some interesting finds from 2023:
• If you are a domestic dealer, Honda drivers are not your audience despite high market share.
• Nissan is a target on every mainstream brand’s conquest list.
• Premium brands are conquesting Ford and Toyota drivers at surprisingly high rates.
Depending on your brand, you have a lot of defections to replace. Finding the right audience is difficult, but certainly not impossible.
Insight 3: Once in the Truck Market, Always in the Truck Market
There’s a unique kind of loyalty within the truck market, but loyalty doesn’t necessarily extend to truck brands. After all, a customer might need a heavy-duty vehicle to haul things, but there’s more than one brand that can fulfill that need.
In 2023, truck owners had a 72.5% likelihood of purchasing another truck as their next vehicle. That’s almost three out of every four truck drivers. But, only GM trucks are keeping more than half their drivers at 57.2%. That means conquesting new customers in competitive makes is as important for trucks as other light vehicles.
The good news is you know your targets. Regardless of your make, domestic truck brands are where most of your conquest opportunities lie. And if you’re a Honda dealer, you’ll also pick up some Toyota drivers. Brand retention and defection numbers can be tough to look at, but they can be a great guide to finding new customers.
*This data is based on the 2024 Brand Retention and Defection report. Results are based on deals closed between January 1, 2023, and December 31, 2023. Only finalized deals for new and used vehicles that were purchased or leased at U.S. dealerships were used.
