Exploring Factors That Influence Consumer Loyalty to Automobile Dealerships in New York

Abstract

Customer attrition has severe effects on profitability and organizations incur high costs acquiring new customers while existing ones generates more profits. However, when an organization reduces customer quitting by 5%, it raises profits by 2-8% (Khan & Rizwan, 2014). Previous studies gave much attention to factors of customer loyalty such as product quality and customer satisfaction but none have qualitatively explored the factors relative to automobile dealerships businesses in New York City. The aim with this study was to fill the research gap. Based on Theory of Reasoned Action, the purpose of this qualitative multiple-case study was to explore some factors that influence customer loyalty towards automobile dealerships after initial purchases. Data were collected from 50 participants who have purchased, leased, or serviced automobiles from same dealership for over 60 months. Data analysis involved thematic and content analysis. The 3 emergent themes in final report related to Customer Satisfaction, Product Quality and Service Quality influences on consumers loyalty towards dealerships. Findings could result in retention programs and strategies for automobile business managers to inhibit attrition rate while alleviating the damaging effects to sales and profitability. This study is beneficial to automobile business managers, policy makers, and academics.