About a third of Dodge dealer David Kelleher's customers are loyal to the brand, meaning they buy another Dodge.
That figure might not seem very high, but it is up 16 percentage points from two years ago, when only 17 percent remained loyal to the Dodge vehicles Kelleher sells.
He credits the rise to his aggressive push to get his customers out of their Dodge vehicles and into newer ones, a push he has stepped up.
"Every day we pull our service equity list," said Kelleher, president of David Dodge-Chrysler-Jeep-Ram in Glen Mills, Pa. "This tells us that Mr. Jones is coming in tomorrow with his Dodge Charger for service and how much equity he has in it," enabling the store's staff members to know whether they can suggest trading in for a newer vehicle.
The immediate payoff for Kelleher is getting a used vehicle for 7 to 8 percent less than he would pay at auction. More important, though, he keeps that customer loyal to his brand by getting the customer into another new Dodge right away.
A new study found that reducing the customer's time in the vehicle can play a major role in building loyalty: The longer a customer owns a vehicle, the less likely the customer is to buy the same brand again.
The study, by Experian Automotive, found that consumers who owned their vehicles for 12 months bought their next vehicles from the same brand 57 percent of the time. But consumers who owned their vehicles for 12 years bought the same brand only 34 percent of the time.
The biggest drop in brand loyalty -- nearly 10 percentage points -- occurred after 36 months of ownership, Experian said.
In the first quarter, the most recent period for which data were available, the average length of ownership was 93 months, or almost eight years, and the average brand-loyalty rate was nearly 50 percent.
Both increased from a year earlier, when the average length of ownership was 92 months and the average brand-loyalty rate 48 percent. But a rise in length of ownership doesn't naturally bring a rise in brand loyalty.
Why do consumers become less loyal over time? Because things change, Brad Smith, director of automotive market statistics for Experian Automotive, said in a statement. A brand's lineup changes, while a consumer's budget or credit score can change.
"Additionally, the increase in time between dealer interactions, whether they are for sales or service, increases the probability of a customer defecting to the competition," Smith said.