GM wooing its orphan owners

Many former Pontiac, Saturn buyers stay in GM fold; Hummer alums flee

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Akerson: "We'd better be there" at trade-in time.

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DETROIT -- One morning last week a dozen or so vehicles streamed into the service drive at Sellers Buick-GMC in suburban Detroit. They were all Saturns.

It was a sight that would have warmed the heart of General Motors CEO Dan Akerson.

The Buick-GMC store is one of hundreds of dealerships GM had designated as authorized Saturn service providers in 2009, after GM killed the quirky brand with the loyal following. GM killed Pontiac and Hummer at about the same time.

Akerson sees the quest to retain those defunct brands' 2.7 million orphaned customers as a protracted war. Today those authorized service dealerships are on the front lines of GM's battle to keep those customers in the GM family.

There are signs beyond the lined-up Saturns at Sellers Buick-GMC that, after a slow start in 2010, GM is beginning to win the battle.

GM is retaining a higher percentage of Saturn customers now than it did in 2007, when the brand was alive and well, data from Edmunds.com show. Its Pontiac retention rate has dipped only slightly.

Last year 31 percent of Saturn owners who traded in their vehicles bought a GM car or truck. That's up from 23 percent in 2010 and 20 percent in 2007, according to Edmunds.com.

GM fared better with Pontiac owners: 32 percent stuck with GM in 2010, rising to 39 percent in 2011, just a point below 2007's 40 percent.

Still, those numbers mean GM is losing most of those customers to competitors. More Saturn owners who turned in their cars in 2011 bolted to Ford, Toyota or Honda -- 32 percent -- than stayed with GM. One in four Pontiac owners went to one of those brands, the Edmunds data show.

And Hummer owners are fleeing fast. In 2007, 61 percent of consumers who traded in a Hummer stayed with GM. Last year only 37 percent did.

Akerson's anxiety

In an interview last October, GM CEO Dan Akerson admitted that the prospect of losing customers of those defunct brands to rivals was "one of the things that really worried me" when he took the top job in September 2010.

He has drawn out a battle plan to keep them.

"We need to remember," Akerson said, that "someone who bought a Saturn in 2007 may not buy another car until 2014.

"We'd better be there."

Steering those owners to GM's dealerships is a big part of the strategy. GM now designates 429 dealerships -- about two-thirds of them Chevrolet stores -- as Saturn service providers, about the same number as Saturn had dealers.

"We knew we had to build a relationship between these owners and high-quality dealers," says Julie Heisel, GM's director of customer lifecycle management. "That's been critical to our success."

GM initially offered a year of free maintenance to Saturn, Pontiac and Hummer customers. The last of those offers expires this month.

Recently it began to tailor incentives to that owner base. Rather than a standing offer of $1,000 cash atop any other GM programs, for instance, a Saturn Outlook owner now might get a $1,500 rebate offer to buy a GMC Acadia, built on the same platform as the Outlook, or a Chevy Traverse.

Sam Slaughter, dealer principal of Sellers Buick-GMC, says keeping Saturn buyers is a much tougher task than retaining his Pontiac customers, many of whom had bought multiple cars from him over the years.

Pontiac represented more than half of his unit volume before the brand's 2009 demise. His sales staff regularly puts former Pontiac G6 buyers into the Buick Regal, for example.

'Feeling disenfranchised'

Saturn owners are more fickle, he says.

"I think a lot of Saturn owners still are feeling disenfranchised, literally," Slaughter says. "We did a lot of training on the fact that these customers are really expecting something different, and we need to make sure we offer them a good experience."

Saturn dealerships were renowned for their excellent customer handling, offering fixed pricing and a low-pressure atmosphere. They routinely posted customer-satisfaction scores that, along with Lexus and Infiniti, were head and shoulders above the rest of the industry's scores.

To hammer home the point, Slaughter called a sales meeting soon after he got the Saturn service designation, in late 2009. He handed every employee a $100 bill.

"'Every time you see a Saturn customer, I want you to think about this $100 bill. Because it's money coming into us,' " Slaughter recalls telling his staff.

Saturn owners get special treatment typically not offered to Slaughter's legacy-brand customers. For example, they are given a tour of the service department and often introduced to the service manager, Slaughter says.

Chris Haydocy, dealer principal of Haydocy Buick-GMC in Columbus, Ohio, figures a few thousand Pontiac customers in central Ohio could be looking to trade in their vehicles over the next few years. He markets to them through his store's customer-retention database.

"Every manufacturer is going after these clients," Haydocy says. "You can't give them a reason to leave you."

Unnatural fit

But e-mail blasts and courtesy phone calls sometimes can't overcome one stubborn fact: Putting a Pontiac owner into a Buick or GMC can be an unnatural fit.

Until the recent launch of the Buick Verano compact, the least expensive sedan in Haydocy's showroom was the Buick Regal, with a base sticker price north of $27,000. Many Pontiac customers were accustomed to paying less than $22,000 for a G6.

That has made Chevrolet a better fit for many Pontiac buyers. GM's Heisel says about two-thirds of Pontiac owners who trade in their cars for a GM model choose a Chevy.

For Akerson, the nameplate does not matter as long as GM keeps the customer. He has been pleased with the retention effort so far.

"We have traversed that minefield well to date," he said in October. "We can't let our guard down."

You can reach Mike Colias at mcolias@crain.com.

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