Brand and dealer loyalty declines as consumers pay more, GfK research finds
New research from Growth from Knowledge AutoMobility shows that loyalty to brands and dealers continues to decline as consumers pay at or above the manufacturer’s suggested retail price.
“It has been widely advertised in the industry that many people are paying more than MSRP. We know that prices have risen and continue to reach near record highs virtually every month,” said Julie Kenar, Vice President senior at GfK AutoMobility. “This notion of paid sticker and even sticker over it is absolutely something that has really come up over the last 18 months.”
In May and June, 80% of car buyers paid at or above the list price, according to the study. Additionally, 31% of shoppers who paid for the sticker above said they would tell others not to visit the dealership they used, and 27% said they would not return. the dealer for service.
Kenar said dealerships keen to connect with consumers need to consider the future cost of higher billing.
“I think what dealerships need to do is realize that they’re giving up a long-term relationship with customers when they charge MSRP. Consumers can tell which dealerships are in it for the long haul by short-term,” Kenar said. “I really think it’s incumbent on dealers to take that long-term view rather than just take their money and probably never see them again.”
Twenty-seven percent of respondents said they wouldn’t buy from the same brand if they were charged more than the list price, and 23% said it negatively impacted their opinion of the brand. As a result, automakers have had to deal with the negative reviews they face due to dealer pricing, Kenar said.
“It’s not that brands are doing nothing; many brands have communicated with their dealerships that ‘you are potentially harming the equity you’ve built up in your dealership and we’ve built up in our brand’ said Kenar. “But from a legal standpoint there is not much that brands can do. We hope that with the publication of this research, it will provide brands and retailers with data points to say that it is not anecdotal.”
Although customers may come back when they need to buy a new vehicle, Kenar said charging more isn’t worth the risk for dealers and brands.
“We’ve also seen that industry loyalty, overall, is down. And it’s actually seen an even steeper decline more recently this year,” Kenar said. Consumers “seem very determined to hold grudges and not return.”
“Three or four years from now, things could be different. But if they’ve already made a sacrifice, they’ve already potentially jumped on a competitor. Brands might struggle to get that person back in the seat of one of their vehicles. .”