GM Wants Toyota's Loyalty Rates

GM said Wednesday it wants customer loyalty rates, which are currently at 52% to 53%, to reach Toyota's industry-leading level of 58%, Reuters reports. The Detroit automaker says it focused too long on internal data, looking to cut warranty costs in half over the past five years. Indeed, improving reliability scores on onetime stinkers, like the current-gen Cadillac CTS, reflect as much. But overall consumer perception in surveys from Consumer Reports and J.D. Power and Associates still lags.

"There have been times when we had success beating our internal objectives only to be disappointed when we got the actual customer feedback from some of these third-party rankings," product development chief Mary Barra told reporters near Detroit.

GM has a shot at this, with more than 70% of its lineup seeing a refresh or redesign in 2012 or 2013. The automaker announced last June that it would tie employee compensation to how many shoppers returned for another Buick, Cadillac, Chevrolet or GMC. But reliability will need to improve on a few popular models — like the Chevrolet Cruze and Buick LaCrosse — before the automaker can declare mission accomplished.

The consequences are huge. Barra told reporters that a single percentage-point improvement in loyalty equates to around 25,000 sales or $700 million in revenue. Alicia Boler-Davis, head of GM's customer experience and product quality organization, told Reuters it costs five times more to get a new shopper to buy a GM product as it does to keep an existing owner coming back. Toward that end, GM has added more mystery shoppers and renovated 88% of its U.S. dealerships, and it's responding faster to customer complaints.

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