In a recent interview with Automotive News, Masahiro Moro, head of Mazda North American Operations, detailed Mazda’s plan to increase customer loyalty for both the OEM and its dealers. While his plan mostly revolves around vehicle quality and diversity, as well as shifting from a sales-focused goal to one of retention, it also includes a nationwide training push with dealers to help improve the customer experience. Moro explained that in the past, Mazda’s business philosophy was expansion of sales: “Whatever you do, sell more cars.” And that caused a lot of bad business equations.
In the future, Mazda will focus on acquiring those good customers who really understand what the brand is about and not engage with the rational type of price-seeker. Mazda is now focused on how to make a Mazda customer a customer for life. And, to make that happen, the most important part is how dealers treat the customer. Dealers will need to change their focus to look after more customers so that dealer loyalty and brand loyalty are top of mind.
When addressing Mazda’s internal goals, Moro offered an interesting loyalty metric the factory has decided to use that should perhaps be adopted by all franchised dealers. Recognizing that Mazda is at the bottom of the market share list at 2 percent, rather than focusing on increasing that market share, Mazda has decided to shift focus towards the quality of market share. Moro explained, “…if we are not able to improve the market share for the moment, we should be thinking about if we’re getting a good 2 percent or not a good 2 percent. I really want a good quality 2 percent. That makes a huge difference rather than a lousy 5 percent.”
One factor that Moro uses to determine whether Mazda’s market share is “quality” is repurchase ratio which, he says, currently sits at the bottom of the industry.
How about applying this concept to your own customer repurchase ratio – not from the brand itself but from your own dealership? A stable foundation is key to any growth. In the article, Moro further shared that loyalty and retention are a high priority in order to build that quality market share and that retaining a customer is much more efficient than courting a new customer; increasing retention rates while maintaining the same level of conquest is the easiest and most efficient path to sales acceleration.
Consider applying this and making an effort to understand the behavior of your customers, for sales, service and when it comes to repurchase. This will help to better understand the quality of your market share. By knowing that answer, you can then focus on strengthening that quality through a more customer-centric experience. Only then can customer conquest and acquisition efforts actually increase sales, rather than simply replacing lost customers.
Author: Michael Gorun
Michael Gorun is founder of Performance Loyalty Group, a technology-based owner retention and loyalty company. He has more than 25 years in operational service management positions for Ford, Nissan and General Motors. He can be reached at: firstname.lastname@example.org.