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Customer LoginsHuge opportunity: orphan owners
When car owners either trade their vehicle for a new one or add a vehicle to their household fleet, 55-60% of them choose a vehicle from the same corporation as their existing vehicle. But what about car owners whose brand has been discontinued (frequently referred to as "orphan" owners)? This is now a topical question since GM and Ford together have recently discontinued five brands. As of April, there were over 14.4 million orphan owners in the US (including owners of vehicles from all brands which have been discontinued).
Polk loyalty data indicate during the past five years the percent of "orphan" owners who stay with the same corporation has been steadily declining, slipping to 39% this year from 57% six years ago. If the corporate-level loyalty rate for orphan owners was the same as the industry-wide, corporate-level loyalty rate (58%), then 12,430 more orphan owners would have stayed with their original corporation in just the first five months of this year than have actually done so.
Clearly this presents both a huge opportunity and a huge risk for those corporations who recently discontinued makes. The risk is that owners will defect to competitors, while the opportunity is to retain substantial sales and service business. It would be in the best interests of both OEMs and dealers to identify their orphan owners, determine how to reach them, and then actually appeal to them with a compelling marketing message to bring them back into the corporate fold.
Tom Libby is manager, loyalty practice and industry analysis, IHS Automotive
Posted 6 August 2013