MANAGING CUSTOMER LOYALTY IN THE AUTOMOTIVE INDUSTRY USING SIX SIGMA AND “THE TOYOTA WAY” METHODOLOGY

Abstract

In times of economic crisis and dropped sales, automotive manufacturers spending their resources wisely and focus on areas with bottom-line impact. Such a focus is the customer loyalty, which is a “must” for automakers that compete in present environment. The average replacement cycle for auto buyers is usually three or four years…or even longer, unlike other consumer products with more frequent replacement cycles. Therefore, loyalty needs to be in the focus of automotive manufacturers and help building customer retention. While many automotive manufacturers have started customer satisfaction programs, most of them don’t realize that the customer train has left the station without them. Here are some facts on the negative influence of customer satisfaction. More than 90 percent of the Fortune 200 companies are convinced that maximizing customer satisfaction maximizes profitability and market share. Yet fewer than 2 percent are able to measure bottom-line improvements from documented increases in levels of customer satisfaction. There are 15 to 40 percent of customers who say that they are satisfied defect from a company each year. In the European auto industry, the average repurchase rate of satisfied customers from the same car company is less than 30 percent. The corresponding figure for the appliance industry is below 45 percent. The defection rate of people over age 65 is 40 percent; for those over age 35 it is 60 percent; for those between ages 20 to 35 it is more than 85 percent.