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CRM in the car industry is paying off, according to The Polk Company's Manufacturer Loyalty Excelerator study. Study results suggest that a significant number of new car buyers in 1999 were influenced by CRM efforts associated with prior vehicles. Polk has done the study since 1995, sending surveys to a random sample of the five million new U.S. car buyers in its in-house database.

The 30,000 new car buyers sampled reported being exposed to the following CRM efforts prior to their 1999 car purchase:

  1. Coupons for discounted service from the dealer (81 percent)
  2. Maintenance reminder letters (79 percent)
  3. Personalized letters from the vehicle manufacturer (76 percent)
  4. Owner magazines (73 percent)
  5. Personalized letters from the dealership (67 percent)

The same vehicle buyers reported that the CRM efforts that made the greatest impact on their purchase decision were:

  1. 800 numbers for questions (36 percent)
  2. Personalized letters from the dealership (36 percent)
  3. Owner magazines (34 percent)
  4. Promotional fliers from the dealership (34 percent)
  5. Newsletters from the manufacturer (33 percent)

Two of the five items that customers reported receiving the most frequently (personalized letters from the dealership and owner magazines) were also rated as being the most influential in new purchase decisions. Two of the most influential items (personalized letters and promotional fliers from the dealership) are mostly under the dealer's control, while the other three items fall in the domain of the manufacturer.

Auto manufacturers are realizing the value of keeping a customer over the long term, says Lisa Wood, Polk automotive analyst. CRM may add costs in the short term, but long-term gains often outweigh the short-term costs. Customers' lifetime value includes not only the number of vehicles they acquire, but also how often they require warranty work, how they finance their vehicle and where they take it for service. "The idea of lifetime value is both essential and elusive," says Wood. "Auto manufacturers are continually refining their techniques for predicting this key element."

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