Autoblog, Not Money, Owns a Dictionary

Money magazine posts a story about Toyota drivers purchase of another Toyota. Money’s headline:

Toyota no. 1 in customer loyalty, GM close behind

Autoblog’s headline:

Toyota tops in customer retention

Loyalty and retention may be synonymous but they are not the same word because they represent different concepts.

Blipverts remain loyal to the lovely Lauren

The New Oxford American Dictionary offers these definitions, which we need to understand the argument.

loyal

giving or showing firm and constant support or allegiance to a person or institution.

retention

the continued possession, use, or control of something.

You can maintain loyalty, or the act of being loyal, to your parents, siblings, offspring, and your government. However, you cannot maintain loyalty to a company. The company cares little if you continue to purchase their products or not. Stop buying the company’s product and the company no longer contacts you. A similar behavior does not exist between you and your parents, siblings, offspring, and government.
Money relies on marketers’ erroneous use of loyalty. Academics remain guilty of the practice. Blipverts reads many journal articles about loyalty that fail to define loyalty. This represents, at best, a sloppy use of the term and, at worse, a disingenuous use.

Autoblog correctly uses retention because as the Money article discusses, marketers are really talking about a frequency of behavior. Marketers either focus on frequency of purchase like automobile manufacturers, frequency of use like food companies, or both like soft drink firms. This talk reflects retention.

As to the analysis, it includes descriptive statistical methodology. J.D. Power and Associates examined what the customer owned and bought within a specified period. They broke their analysis down by brand (e.g., Honda owner buys another Honda) and by company (e.g., Toyota owner buys a Lexus). Like any table data, this analysis cannot tell automotive firms why customers bought what they did.

Like any table data, however, J.D. Power and Associates can predict what Honda owner will buy a Honda or purchase another brand based on easy-to-obtain demographic and Household Life Cycle information. That analysis provides value to automotive firms. The Money article though includes valueless analysis.