GM's Orphaned Brand Buyers Have Moved On
How many former Saturn buyers do you figure have come back to GM for their next car? What about consumers who last purchased a Pontiac? How about HUMMER? Since we’re not bound to a strict inverted pyramid around here, why don’t you think of an answer (in terms of percentage of customers retained) for each brand and then hit the jump to see how close you were.
OK, pencils down. According to the Detroit News:
In 2010, GM retained 36 percent of Pontiac owners who bought new vehicles, as well as 26 percent of Saturn and 39 percent from Hummer, according to California-based research firm J.D. Power & Associates.
That’s far below the 55 percent retention rate for GM’s Chevrolet brand, as well as under the industry average of 48 percent.
Considering that GM has been tackling this retention challenge for two years now, using the term “free agents” to describe buyers of its defunct brands and dealers and throwing all manner of free oil changes, maintenance packages, and deals on new cars at them, this is not a great result. The way former US sales boss Susan Docherty described the “free agent” retention effort a short year-and-a-half ago, focus groups, direct mail and email marketing, as well as “establishing credibility with a service relationship.” Speaking of which, dealers have been making their own efforts to reach out to GM’s “free agents” as well, so The General’s corporate retentino efforts can’t even take all the credit for this underwhelming result.
But why did GM’s “free agents” jump ship in such large numbers? One theory, from JD Power analyst Steve Witten, is that it comes down to product and branding, not dealers and outreach:
The truth of the matter is they didn’t have many options for people to stay in the GM family… When they decided to pull the plug on [Saturn], there wasn’t really another GM brand similar enough from an image standpoint
But c’mon… really? The differences between a Saturn Aura, a Pontiac G6 and a Chevy Malibu were that big? Methinks Mr Witten is looking at the past with rose-colored glasses. A more plausible theory comes from a dealer who used to sell Saturns, and has switched to selling Kias since the brand cull, who notes:
I would say the majority of people who had Saturns were very unhappy they got left holding the bag on this one. A lot of them took a hit on the value of their cars and that turned them off to Saturn and GM
Remember, a big hit on resale can be as much of a financial burden as a grenaded engine, or faulty transmission. And though GM is arguably making progress in erasing memories of its bad old days of product ignominy, things like the resale hit on culled brand vehicles could create a whole new generation of mistrust between GM and its once-loyal customers. But hey, at least there were only 6.8m of these “free agents” as of early 2010…
More by Edward Niedermeyer
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