Brand loyalty is among the most prized things a company can have in a product. Loyal consumers are repeat buyers and, therefore, buyers a company does not have to replace. They are a foundation to build on. However, companies with brands that drive little loyalty find themselves having to replace customers who leave just to keep the current sales level.
The car industry is the same as most others in these regards, although the number of manufacturers is so large that the tug-of-war for drivers is unusually aggressive. One car brand has so little loyalty that it is about to disappear from the U.S. market.
Well-regarded car research firm J.D. Power surveys consumers every year about product dependability, initial quality and performance. One of its most important single studies is the U.S. Automotive Brand Loyalty Study. Results for the 2019 poll were just released. Tyson Jominy, J.D. Power’s Vice President of Data & Analytics, commented, “Customer loyalty is perhaps the most important metric for manufacturers because it incorporates many factors that lead customers to become brand ambassadors. When a brand can connect emotionally with owners through the vehicle’s content, capabilities or prestige level, owners are much more likely to come back and purchase that same brand again.” The brand that buyers were least likely to come back to was Smart.
The brand loyalty rate for Smart was 14.3%. Customer loyalty numbers were derived from the percentage of vehicle owners who choose the same brand when they trade or purchase their next vehicle. Smart is considered a mass-market brand. The brand with the highest loyalty rate in this category was Subaru at 61.5%. Subaru didn’t make the list of best new cars. And, as a matter of fact, many luxury brands did not either — these are best new cars brands of 2019.
Smart’s lack of loyal customers has cost it dearly. Smart USA sells small electric vehicles in America. The company is part of Mercedes Benz, and its models range in price from $24,000 to $30,000. Mercedes has decided to pull Smart from the U.S. market completely at the end of the 2019 model year. Car & Driver pointed out how abysmal sales have been: “A paltry 1276 Smart vehicles were sold in the U.S. throughout all of 2018.” Every year there is a long list of cars Americans don’t want to buy. Smart will never get another chance to make the list.