Customer Loyalty Lessons for Ford, Toyota

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Customer Engagement
Customer Experience
When J.D. Power & Associates came out with its eighth annual customer loyalty ratings for the automotive industry last week, I was heartened by the relatively strong performance of two automakers - Ford and Toyota. It's not because I'm a customer of either carmaker. But as a casual observer, I have been impressed with some of the approaches that each company has taken to become more customer-centric.

When J.D. Power & Associates came out with its eighth annual customer loyalty ratings for the automotive industry last week, I was heartened by the relatively strong performance of two automakers - Ford and Toyota. It's not because I'm a customer of either carmaker. But as a casual observer, I have been impressed with some of the approaches that each company has taken to become more customer-centric.Ford and Honda tied for top honors in the study for having the most loyal customers, at 62 percent each. Toyota was close behind, tied for third with Hyundai and Lexus with a 60 percent retention rate.

For years, Ford, much like its U.S. rivals GM and Chrysler, watched its market share get eaten away by foreign rivals due to quality and other issues. But among the Big Three, Ford has engineered the most impressive turnaround over the past few years, beginning with a focus around quality.

More recently, Ford has taken other steps to engage its customers and prospects. For instance, the company has a program called the Ford Fiesta Movement where 100 people are spending six months streaming their experiences via video on social networks such as Facebook, FlickR, and YouTube.

Meanwhile, Toyota finds itself in a much different position. After having led the market as the world's top-selling automaker for years, Toyota suffered a major blow to its image (and its sales) earlier this year when it had to recall millions of vehicles following safety issues with accelerators, braking systems and power steering systems.

Even though senior management at Toyota initially stumbled out of the gate with its responses to these issues by blaming the problems on driver error, they eventually developed a considerably more customer-centric approach and launched into an extensive customer communications campaign where they began detailing the steps they were taking to address the problems as a means of reassuring their customers and to keep them informed of their progress.

As sales in the U.S. auto market have grown 11 percent this year, Toyota has lost 1.6 percent market share, according to TireBusiness.com. For sure, Toyota hasn't completely recovered from the issues that dogged it earlier this year. It's going to take time for the company to regain consumer confidence in its vehicles. But the steps that it has taken to communicate more openly with its existing customers do seem to be helping to stabilize loyalty among some of its long-time customers.

EXPERT OPINION
EXPERT OPINION