If there ever was a poster child to prove the cause and effect of poor customer satisfaction on loyalty and future purchases, one need look no farther than Toyota.
2010 was a disaster for Toyota with recall after recall (17 in total) affecting 15.4 Million Vehicles, charges by the US government and class action lawsuits. Each recall increased the visibility of their flaws in their product line including Toyota cars, trucks and even the Lexus line.
One of major consequences of their customer satisfaction challenges is the loss of prospects. Two recent studies have shown that Toyota did, in fact, take a hit during the worst of its crisis of confidence.
J.D. Power 2010 Avoider Study
According to a J.D. Power 2010 Avoider Study of US car buyers conducted at the height of the worst controversy about Toyota’s problems:
a. 19% of US new car buyers avoided Toyota due to a ‘bad reputation of manufacturer’, which is 17% more than it was just a year earlier.
b. 15% claimed a ‘bad experience with this manufacturer’, up 12% from 2009.
c. 12% were ‘concerned about the future of this vehicle brand’ which is 11% higher than last year (2009). This figure went from 1% to 12% in one year!
Kelley Blue Book Study
According to a 3rd quarter Kelley Blue Book Market Intelligence Brand Watch study, Toyota used to be the top brand researched on their website from 2007 to 3Q 2009. During the crisis, interest in Toyota vehicles dropped to 2nd place (behind Ford) from 4Q 2009 through 2Q 2010.
Toyota may have a more difficult time attracting new car buyers who previously owned other brands or who have never owned a Toyota. According to a news article, Recall crisis hurts Toyota’s growth potential, ‘New car buyers who have never dealt with Toyota are more likely to have a bad opinion of the company. That’s in contrast with customers who have owned or own a Toyota and are likely to continue considering the automaker when buying their next new car.’
Toyota has been working diligently to reestablish its quality image and it seems to be taking hold. They admitted their problems, apologized and followed through on an action plan to rectify the situation, both in the short term and for the long run. It seems to be working.
The Kelley Blue Book Market Intelligence Brand watch study has shown more recently that interest on Toyota on their site has increased and Toyota is once again the top brand considered for new car shoppers in the US.