Analyst Note March

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JD Power Analyst Note for March 2013

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Analyst Note March

  1. 1. CANADA CANADA February 11, 2013 March 14, 2011 The Advocacy Imperative The Importance of Advocacy Among Millennials jd_ney@jdpa.com (416) 507-3254 At corporate retreats and conferences around Canada, Millennials —the generation currently between 18 and 34 years old— are often both praised and maligned. They are applauded for their inherent 35% tech-savviness and increasing economic gravitas, No while also being described as fickle and entitled. 29% 32% Regardless of labels or descriptors, the Canadian automotive industry must learn how to more 22% effectively cater to this demographic, the leading edges of which are entering their prime vehicle buying years. According to the 2012 Consumer Retail Experience Study, a critical step in attracting more business from these young buyers is increasing advocacy among current customers. Source: J.D. Power and Associates 2012 Consumer Retail Experience Study Behind the Numbers • Among recent vehicle buyers, who have also • These advocacy imperatives come into sharp purchased at least one new vehicle in the past, focus when considering that Millennials are the previous experience with the dealer from whom least likely demographic to definitively declare they purchased plays an important role in terms of forward intended service loyalty (48% of new- influencing the new purchase decision. However, vehicle purchasing Millennials vs. 64% of older when focusing on age groups, the data tells a very purchasers). Given their penchant for exhaustively different story. Past experience with the selling researching automotive purchases online, they’re dealer is a much stronger influencer among older also less likely to be “delighted” with the dealership buyers (46%) than among Millennials (29%). sales experience. • This relationship is reversed when the various age • When it comes to measuring sales and service groups are asked about the importance of satisfaction, dealers must genuinely “delight” their recommendations from friends and family in their customers. Customers who rate their dealership decision to purchase from a particular dealer. This sales experience as 10 (on a10 point scale) share component was sited as less important by older an average of nine positive recommendations, buyers (19%), while it was the most influential compared with three positive recommendations component cited by Millennials, with 32% agreeing when sales satisfaction is rated 7. that recommendations had impacted their decision. • Similarly on the service side, 49% of customers • Far from being just advice aggregators, Millennials who rated their experience as a 10 say they also share the most comments about their “definitely will” recommend their service facility, purchase experience, be they positive or negative. compared with 2% of those who rated their service On average, they share seven positive comments experience as a 7. with others, versus two negative ones.J.D. Power and Associates does not guarantee the accuracy, adequacy, or completeness of any information contained in this publication and is not responsible for anyerrors or omissions or for the results obtained from use of such information. Advertising claims cannot be based on information published in this publication. Reproductionof any material contained in this publication, including photocopying in part or in whole, is prohibited without the express written permission of J.D. Power and Associates.Any material quoted from this publication must be attributed to J.D. Power and Associates. 1© 2013 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
  2. 2. Brian Murphy ▪ 416-507-3253 ▪ brian_murphy1@jdpa.com February 11, 2013 March 14, 2011 Vehicle Purchase Type Percent of Total Transactions (Last 12 Months) Days to Turn New Vehicles Used Vehicles 3 18 47 21 61 50 Cash Lease Loan Monthly Payments Vehicle Price versus Customer Facing Vehicle Price* Average per Customer *Data from JDPA PIN Incentive Spending Report (ISR) Vehicle Price Transaction Price $32,000 $31,000 $30,000 $29,000 $28,000 $27,000 Feb-12 May-12 Jun-12 Jul-12 Nov-12 Jan-13 Feb-13 Dec-12 Mar-12 Oct-12 Sep-12 Aug-12 Apr-12 Percent New-Vehicle Loan Term Percent Negative Equity + Trade-In 72 Months and Greater Percentage of negative equity vehicles at trade-inJ.D. Power and Associates does not guarantee the accuracy, adequacy, or completeness of any information contained in this publication and is not responsible for anyerrors or omissions or for the results obtained from use of such information. Advertising claims cannot be based on information published in this publication. Reproductionof any material contained in this publication, including photocopying in part or in whole, is prohibited without the express written permission of J.D. Power and Associates.Any material quoted from this publication must be attributed to J.D. Power and Associates. 2© 2013 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.

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