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Carlson Relationship Builder Shows How to “Turn the Corner in Automotive Marketing”

January 15, 2008

MINNEAPOLIS — With 2008 predicted to be a tough year, automotive marketers should pay heed to new research that directly links the intensity of car buyers’ repurchase decisions and recommendations to friends. The Carlson Relationship Builder research from Carlson Marketing and Peppers & Rogers Group — “Turning the Corner in Automotive Marketing" — details the dimensions of loyalty as it pertains to the auto industry and calls out the brands with the strongest consumer relationships.

Of the automotive brands researched, those with the greatest relationship strength were BMW, Lexus and Cadillac followed closely by Subaru, Toyota and Honda. That index number is important because it is linked directly to the consumer’s intention to repurchase or recommend the brand of car which translates to additional potential sales.

According to Luc Bondar, vice president, Loyalty, Carlson Marketing, “Creating and maintaining a strong relationship with a customer basically is dependent on one thing: treating different customers differently." That is accomplished by understanding that relationships 1) are developed with individuals (not market segments), 2) require an exchange of knowledge between the customer and the seller, and 3) necessitate behavioral change in both parties in order to thrive.

The research surprisingly shows that the traditional index — customer satisfaction — as an indication of future purchases is inadequate; looking at the components of the relationship is much more important. And the effect of each component is rated so marketers can decide what is best for their particular car brand.

“Brand relationship strength is a better driver of profit than market share, quality, cost per labor hour or sales leads and close rates per marketing dollar," said Jim Schroer, president & CEO, Carlson Marketing. “Chief marketing officers and vice presidents of sales should make it their top priority." Schroer was executive vice president of Global Sales, Marketing and Service at DaimlerChrysler and vice president of Global Marketing at Ford.

Brand relationships are influenced in varying degrees by the following:

• Loyalty initiatives — dealership programs, affinity credit cards or special pricing

• 1to1 Communications — includes communication customization, relevance and frequency

• Dealership experience — includes “soft" facets such as keeping promises and expressing concern as well as “hard" facets such as fair prices, a clean facility, convenient hours and location

• Vehicle features — technology, luxury, status

Understanding the impact each of these has on the relationship between the automobile brand and the automobile owner can help improve the key consumer actions of repurchase and recommendation.

“Moving forward with your high beams on is imperative to navigating the automotive marketing highways," said Bondar. “The freeway of the future will be built on authentic, productive, 1to1 relationships with customers."

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