Cam

iTrader: (1)

Mazda aims to boost owner loyalty; retention scores are 4th worst in J.D. Power study



MARK RECHTIN | Automotive News
Posted Date: 11/9/04
LOS ANGELES -- Mazda North American Operations is staging a comeback. But much of the automaker's success will depend on its ability to enhance customer loyalty.

Mazda's U.S. sales are up 4.8 percent through September. The company successfully launched the Mazda3 compact sedan and hatchback. Sales remain strong for the Mazda6 mid-sized sedan, hatchback and wagon.

The RX-8 sports car survived an early snafu regarding overstated horsepower and is close to meeting sales objectives.

Mazda dealers and executives attribute much of the automaker's success to its ability to attract a large number of customers who are new to the brand. At the same time, Mazda has one of the lowest customer loyalty rankings in the industry, market research studies conclude.

According to the J.D. Power Customer Retention Study released last December, Mazda had the industry's fourth-worst loyalty scores. Only Suzuki, Oldsmobile and Isuzu did worse.

The industry average for repeat customers was nearly 50 percent. That is, half of all consumers were loyal to their brand when they bought a new car.

Mazda's loyalty score was just 22.2 percent. By comparison, Mitsubishi scored 36.2 percent and Hyundai scored 54.3 percent, the study reported.

Badly treated buyers

Dan Lawlor, senior analyst for quality and customer satisfaction research at J.D. Power and Associates, says customers complained about poor treatment by Mazda sales and service employees, as well as poor quality and poor resale value of Mazda vehicles.

As John Mendel, COO of Mazda North American Operations, puts it: "You can't treat people like crap and expect them to keep coming back to you."

Mazda is starting a comprehensive program to bolster customer loyalty. Steve Odell, senior managing executive officer of Mazda Motor Corp., cites three elements of that effort: better product, more exclusive dealerships and better treatment of customers in the back shop.

Mazda needs to fill in the gaps in its lineup, such as a sport wagon and a larger SUV. It also is preparing replacements for some of its aging vehicles.

"We're in 50 percent of the industry categories by volume," Odell says. "There's an opportunity to broaden our appeal, and that will help our loyalty and retention."

A stronger product line will improve resale values. The Mazda3 has gained 11 percentage points in its 36-month residual value over the Protege it replaced. That gives the Mazda3 the best value in its segment, Odell says.

Mazda is pushing its dealers to build more stand-alone stores. Employees of an exclusive store will give the brand greater attention, Odell asserts. Mazda also wants dealerships to build customer satisfaction and loyalty through improved service.

"It's about processes and after-sales care and attention," Odell says. "It's about customers being able to book service calls online. That's the long battle for us."

Dealers want more

Some dealers express resentment at Mazda's entreaties. George Pelton, owner of the multiline First Team Auto group in Chesapeake, Va., says Mazda is not giving dealers adequate advertising and incentive support.

"The Mazda3 and Mazda6 are a wonderful change," Pelton says. "But it takes more than just good product to get the job done.

"Mazda is not as supportive as they need to be," he says. "If they continue to support the dealers with consistent advertising and programs, then the image will grow."

There are positive signs. In a survey of owners of 2004 model vehicles by AutoPacific, a consulting firm in Tustin, Calif., 82 percent of Mazda owners said they would consider buying the brand again.

But AutoPacific President George Peterson says even that impressive-sounding performance by Mazda "would put it right in the middle of the pack."

In the latest J.D. Power APEAL survey of vehicle performance, Mazda finished 16th among automakers. Still, Mazda was the top-rated volume brand. All marques that finished higher are luxury brands or sell to narrow niches.

The results of Mazda's loyalty initiatives won't be known for a few years, when current Mazda3 and Mazda6 owners trade in their cars.

Says Lincoln Merrihew, an analyst with the Compete Automotive consulting firm in Boston: "Mazda's low loyalty may not be such a bad thing right now. Mazda is charting new waters.

"If its loyalty remains low three years from now, I would be concerned," he adds. "That would mean its new wave of shoppers did not stick around for the second wave."

http://www.autoweek.com/news.cms?newsId=101204


I found this interesting. I am a first time Mazda buyer, and love the car. The only thing that would keep me from buying another Mazda is the sales people. I have yet to take my 8 into the service dept., so I cant comment on that aspect, except than my 8 had all the TSB's performed before I even bought it so the techs kept up on the work.


I am big on customer service, I had poor treatment from 3 Mazda dealerships before buying and the poor customer service almost made me wait to buy a 05 Mustang instead.

rx8wannahave

Don’t know if I’m spelling this right but….”Yah-zaaaaaaaaa”

Lower prices on Mazdaspeed stuff and that should take it a long way. People love customizing their cars and if Mazda was more competitive with after market companies out there people would go to Mazdaspeed first before buying outside for the same if not better stuff.

bern

We've posted this same story at the following:

http://mazdanews.com/

Please feel free to leave comments.... we'll point Mazda over.

-Bern

Elara

Crappy customer service from sales and service- big surprise. My service people (with the exception of one person) are the least informed people I have ever met. I have to explain things to them 5 times EVERY TIME I go in.

Feras

iTrader: (1)

i just wrapped up an issue i had from when i bought the car (its been 8 months) the headlight lenses were scratched, and they finally caved and gave me new ones!, but they switched them with a car on the lot, so the scratched up headlights are gonna end up in someone elses hands, probably someone they hope is less finicky. I got better service with my old 626 than on my rx8 at this dealer...for shame.

Fanman

I was one of those people that was not gonna buy another Mazda because of the terrible service I had received from my local dealership, but Mazda NA really came through for me and helped me solve that to a certain extent. Now I would definitely consider another Mazda, just not from Santa Monica Mazda. Let's face it their previous product was garbage. I would have never considered a 323, or 626, but I would look at a Mazda 6 for my next car if I need a sedan. Mitsubishi is going through what Mazda went through 5 years ago. Terribly unexciting designs.

boyer_tom

I can also relate to the poor service. The service department is horrible and the sales isn't much better. After buying my 8 my wife fell in love with the mazda 3 hatchback. In order to avoid the dealership near my house, we drove an hour and a half to buy from a different dealership. I love the products that mazda is coming out with, but I dread the days where I actually have to take one of my cars in for service.

NomisR

Oldsmobile has poor retention score probably because their owners died of old age before it comes time for another new car. :p

rx-7~rx-8

MAZDA SERVICE AND SALES SUCK.
Products are top-notch, but cars don't sell themselves only some ( ferrari... etc. )

I went in and no even greeted me, nor did they ask me if I needed help. ( I AM 17 )
Still...

I went to Toyota/Scion. They treated me with respect, and offered me brochures and test-drives. They also explained the whole car with no bullshyt included. I went alone cause my dad couldn't. My dad ended up buying 2 Scions Tc Coupe's for my sisters. (ONE nice ride, it worth every single penny... its actually a steal)


Mazda salesman dont know jack... "it has 290 hp... yea.. YEAH thats it"... BS...

Kart Racer

im with the sales issue. In my case, they are really nice people, with good intentions.....but they new nothing about the 8. Little things like, "it has no trunk release button in the cabin" WRONG!! or even saying "The tires are all-seasons" yeah whatever......lets see you drive it on the RE040's.......hahahahaha...just little things like that are so nerve racking.

Apple

My 8 had to be towed to the service department - Flooded engine I was told (there is a recall by the way if anyone is interested) was the problem. Now that it has been in the shop for 2 days, they say it was bad gas. I am the only driver and fill the tank myself. Have always used premium gas, but by the "smell" they tell me it was regular gas, couldn't tell me the octane, but it did not smell like premium. So the flooded engine would be covered under warranty, which I mentioned there is a recall to reprogram the computer. Did I mention how the engine got flooded. well silly me I was parking my car for the winter(I live in Alberta) and I started the car, backed out of one stall to another and shut the engine off. Big No No aparently..should have let the engine run for about 10 minutes.
Still not resolved at the dealership, will let you know how I make out. I'm thinking that not enough testing and research was done on the "rotary" .

RAGE91169

There Is A Reason For The Lack Of Return Customers
There Customer Service Suck On All Levels From Dealerships To Their Support From Their Website. I Have Owned 2 Other Cars And BOTH WeRE Mitsubishi's And I Will Buy From Them Again As For Mazda First And Last Time

Put Out A Product And Dont Know How To Market Handle Or Act Toword Your Customers

neofreak

iTrader: (1)

Well, that one should be in the owner's manual. It is in my 89 and if I remember right its in my 95's manuals.

s13lover

I couldn't argue more. Mazda currently is missing some very important models in its line up, some of which the company did have. First they need a real minivan to replace the MPV, not the proposed Mazda 5. Second they do need a larger midsized or even full sized SUV. They have two possibilities here. One is to take another Ford model (which worked for the Tribute, but not the B-Series) or make a model on their own. Third they need a full sized car, possibly a luxury car to replace the Millennia. Forth, they need an inexpensive, compact sports car (not everyone likes convertibles.) It could be a new MX-3, MX-6, or even a rwd car. fifth, Mazda needs a compact below the 3, such as the pre existing 2. And sixth, a full sized truck wouldn't hurt either.

Importance wise (for attracting sales) I would say:
1. Larger SUV
2. Sub compact Mazda 2
3. Compact sports car
4. Minivan
5. Full size car
6. Full size truck

AKS4

Wow, that is a bit surprising, then again with the stories of the dealers you guys visit it is no wonder. I hope to be a repeat Mazda owner. I have had 3 iterations of the 626 (all the proverbial "hand me down family loaners") and was quite pleased, I actually loved my 626's more than when I ended up driving my brothers accord. I hope to soon someday be driving an 8. I think their products are top notch, and I always like the looks of the 626 until the very last iteration. I agree that what makes or breaks a company is the feeling you get from them, when you first set foot to purchase, when you return again, and when you have to have it serviced. My experiences so far have been favorable, and for the most part sounds like the 8 has had issues but Mazda has ben taking care of them. I appluad that for the Subaru club I hung out with has a HUGE dis-respect for our local dealer and the company due to its lack of warranty coverage. I hope mazda mazda continues making great products, and improves its customer service where needed.

magixpuma

Mazda please be carefull of you franchises your lazzei fair style of running dealer ships is the 1 tru problem with your brand i wish you would try to help remedie this problem , but you cant solve everything i guess.

snap-on

You guys need to find better Dealerships..

IMHO

By "you guys" I meant the members that have issues with the ones they have now.

zoom44

or go buy one and make it better see the comment i left by following bern's link

Cam

iTrader: (1)

Sometimes its not that easy. I live in the Seattle met. area. Its about 20-25 miles to the four closest, and around 50 to the other 3 closest.

I bought mine from the 4th dealership nearest me. So in my case there are no better dealerships.

RXLogic

I purchased my RX8 from Rosenthal Gaithersburg six weeks ago and, so far, I have no serious complaints. I don't have my plates yet, but I called today and it seems like they will address the issue. I think I knew more about the RX8 than the salesman, but the simple fact that he wasn't incredibly overbearing more than made up for that. So as long as they fix my car if and when I have trouble during the warranty period, I will be a happy camper.

The main thing than may make me a return customer is that I like Mazda's other new models -- i.e the Mazda3 and Mazda6. I test drove a Miata since my wife preferred it to the 8 ("If you are going to get a sports car then get a REAL sports car, that (the 8) has four doors -- it's a family car")-- it was fun, but I'm too tall. I don't agree that they need a truck and an SUV or a "real" minivan. I think Mazda's current strategy is to go up against BMW, Lexus, Acura, Porsche, and MB, not Honda, Toyota, Ford, GM, and Chrysler. I don't want a real minivan. I 'd much rather have a Mazda5 with a rotary, or at least an MT.

snap-on

Charlie..I see your link.

First let me ramble (first time as I recall)

Mazda has started an aggressive push to get these multi point dealers to dedicate separate the Mazda dealership from the other lines. As I recall it will reward a dealer 2 1/2 times the amount of Elite money to dealers that are "stand alone" VS dealers with common service dept's..That my friends adds up to hundreds of thousands of greensbacks sent quarterly to the dealer. They have even offered to pay the first $300,000 to start the construction of a new building.

Why? Because Mazda wants to get the dealers to commit to having DEDICATED Mazda tech's and showrooms. If your dealers front lot includes multiple product they probably aren't truly dedicated to learning the product on either side of the building. That does not bode well for any Mazda owner.

Let me explain how I do it..every new owner meets and greets the Service Dept. They get a card from a service rep then a follow up call a couple of days later. If possible I meet every RX8 owner myself and show then what flash level they are on and how the update system works. I get alot of glazed eyes..but some amazed one's also. Maybe it's the suit I wear during the day..but most people don't expect or anticipate the level of technology cars have advanced to in the last few years. I have several customers on this forum that can support what a dealer should do and the attention that should be given every customer.

Today I had a customer drive 300 miles round-trip so we could work on his car.

Ramble over.

PS..Maybe thats why I'm here right now?

Cam

iTrader: (1)

^^^^^^

Props to you Snap on. Treatment like that is what I call customer service. Being treated like that makes you want to find another Mazda to buy.

Ill be visiting my dealership for the first time on Saturday. Im not expecting much by the way of service.

Acutally, now that I think of it...I called (the # supplied on their letter head for the service dept.) for an appointment last week that turned out to be the dealerships main line. (No seperate number for service) So this kid (hmm..im only 29) says rudely "you got the wrong department, you need the service department." He transfered me where I wait on hold for around 5 minutes. I gave up and made an appointment online.

Im going to try to be open minded but......

nt5k

I'm only buying a Mazda again if I can buy it directly from Mazda and not their crappy stealerships.

Cam

iTrader: (1)

Oh, and I wanted to point out that when I was shopping for my 8 I wasnt some ball buster asking for the world from the dealerships but I still got treated like dirt.

I bought my 8 on the S-plan (no haggle) and was asking the NADA value on my trade.

snap-on

I wish I could impress the difference in the front end and the back end.

A good service dept is worth mucho $$