GM Wants Toyota's Loyalty Rates

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GM said Wednesday it wants customer loyalty rates, which are currently at 52% to 53%, to reach Toyota's industry-leading level of 58%, Reuters reports. The Detroit automaker says it focused too long on internal data, looking to cut warranty costs in half over the past five years. Indeed, improving reliability scores on onetime stinkers, like the current-gen Cadillac CTS, reflect as much. But overall consumer perception in surveys from Consumer Reports and J.D. Power and Associates still lags.

"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," product development chief Mary Barra told reporters near Detroit.

GM has a shot at this, with more than 70% of its lineup seeing a refresh or redesign in 2012 or 2013. The automaker announced last June that it would tie employee compensation to how many shoppers returned for another Buick, Cadillac, Chevrolet or GMC. But reliability will need to improve on a few popular models — like the Chevrolet Cruze and Buick LaCrosse — before the automaker can declare mission accomplished.

The consequences are huge. Barra told reporters that a single percentage-point improvement in loyalty equates to around 25,000 sales or $700 million in revenue. Alicia Boler-Davis, head of GM's customer experience and product quality organization, told Reuters it costs five times more to get a new shopper to buy a GM product as it does to keep an existing owner coming back. Toward that end, GM has added more mystery shoppers and renovated 88% of its U.S. dealerships, and it's responding faster to customer complaints.

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Comments 

Wen

They can start by building reliable cars.

DeBinder Dundett

Yeah, that's pretty hard to do considering the "mass-exodus" over the decades, away from GM and the domestic manufacturers toward the better-quality imports and later the American-made transplants.

I have no idea how GM is going to get those loyalty rates up since the only ones who will buy GM these days are members of the GM fan-club and the rental fleets.

Christopher

I would never buy a GM because of the bail-out and I know many others who feel the same. Because of my Dad we were a GM family but slowly switched in the early 80's to Honda and never looked back.

For GM, I think it was to start with reliability and customer service as the article mentions. Post bailout brand consolidation it seems like the aren't quite taking the shotgun approach but it still seems like they release 2-3 new cars a years! Maybe if they focused more energy on improving models that are selling well they would be better off. Look at their line of trucks. Although truck sales are down due to gas prices, GM still has a nice size market share and they haven't changed that line much over the last 15 years. New body style and gadgets but they guts have remained the same for the most part.

shawn

Gm will have to improve a lot to achieve this. They just lost me as a customer after 40 years. I drove my 2012 chevy cruze off the lot and it filled up with smoke. Gm did nothing stating the there is nothing wrong with my car. The car has been to 4 dealers for a total of 7 times and I am now on my 4 th rental car thanks to gm and my lemon with no problems. How do they expect to keep us loyal with service like that?

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