Thursday, January 24, 2008
GM v. Toyota: Editor misses big story
The newspaper editor missed a big story by not reading his own newspaper.
His front page told about GM’s quest to stay number 1 in global automotive sales – a feat they pulled off by a mere 3,000 vehicles on a base of over 9 million new car deliveries. Meanwhile, the business section had a story about how GM and Toyota had also tied for customer loyalty awards.
Are these really unrelated stories – or are they a key factor in global business success?
The most significant number in the second story is the 63% rate at which GM drivers return to buy another car. The same rate is only 57% at Toyota. Seems like a small difference – think again, it is over a half-million cars. Had Toyota been as successful at customer retention, they easily would have been in first place.
The cultural aspect of customer retention
Every product and service lends itself to s specific cultural demographic. However cultures change as they grow and develop. For example, the interests of the Baby Boomers have gone from economy student car, to SUVs as the children grew, to more luxury features as the generation reached career goals.
Each country has also its own cultural factors to address. GM is rapidly growing in several nations where they have clearly keyed into the local needs and desires of prevalent automotive-buying cultures. That is why they were able to hold onto the top spot for at least one more year – despite predictions.
Oddly enough, in the 1970s it was companies like Toyota that taught GM this cultural lesson.
The newspaper editor missed a big story by not reading his own newspaper.His front page told about GM’s quest to stay number 1 in global automotive sales – a feat they pulled off by a mere 3,000 vehicles on a base of over 9 million new car deliveries. Meanwhile, the business section had a story about how GM and Toyota had also tied for customer loyalty awards.
Are these really unrelated stories – or are they a key factor in global business success?
The most significant number in the second story is the 63% rate at which GM drivers return to buy another car. The same rate is only 57% at Toyota. Seems like a small difference – think again, it is over a half-million cars. Had Toyota been as successful at customer retention, they easily would have been in first place.
The cultural aspect of customer retention
Every product and service lends itself to s specific cultural demographic. However cultures change as they grow and develop. For example, the interests of the Baby Boomers have gone from economy student car, to SUVs as the children grew, to more luxury features as the generation reached career goals.
Each country has also its own cultural factors to address. GM is rapidly growing in several nations where they have clearly keyed into the local needs and desires of prevalent automotive-buying cultures. That is why they were able to hold onto the top spot for at least one more year – despite predictions.
Oddly enough, in the 1970s it was companies like Toyota that taught GM this cultural lesson.
Labels: Baby-Boomer, Business, Generation
¶ 1/24/2008
