DETROIT — For years, automakers have relied on racy commercials and advertisements that boast big discounts to lure buyers. Now they've come up with their own magazines to keep those customers coming back.
Too often, automakers lose touch with their customers once they've sealed the car purchase, experts say. That's why a growing number of automakers are sinking millions of dollars into publications that detail the products and life-styles associated with their brands.
Ford Motor Co.'s Ford Division, for instance, launched My Ford magazine late last year. And several other automakers, including General Motors Corp.'s Cadillac division and Volvo AB, have launched new magazines in the past few years as a way to maintain their ties with customers.
The magazines themselves, which are usually sent to customers at no cost, aren't profitable. But automakers say they can translate into sales later on because they influence their current customers to want to buy again.
"Customers don't want you to forget about them after the purchase," said Kim McGill, director of retail development for Cadillac. "We spend a lot of time trying to get the customer, but the continued communication and relationship is very critical."
McGill, who oversees the production of Vision, Cadillac's magazine, and other customer relationship initiatives, also said consumers want to see upcoming products before the general public.
Experts say that enables consumers to set their sights on the next purchase. Vision, for example, features an article in its spring edition that details the latest and upcoming Cadillacs, including the popular CTS and the 2004 Cadillac XLR, a roadster due out in 2003.
And automakers' magazines aren't just filled with product stories — they also feature life-style pieces and how-to articles ranging from picking the best auto insurance coverage to managing money more wisely. Volvo Magazine's spring issue even featured an article about the latest coffee craze in the United States.
No matter how related, or unrelated, the articles are to their products, automakers are hoping that their magazines will create more of a loyalty base among their buyers.
Loyalty is becoming increasingly crucial for automakers as competition swells and the quality gap closes among vehicle brands. Given the vast amount of car and truck selections, buyers are less likely to stick with a particular vehicle brand the next time they make a purchase, experts say.
It's also much more costly for automakers to seek out new customers than it is for them to hold on to the ones they have, said Art Spinella, an analyst with CNW Marketing/Research.
For instance, automakers typically spend $1,500 to $2,000 per customer if they are trying to lure new customers. Cadillac's McGill also said that it's often five times more expensive to get a new customer than it is to maintain a current one. "Building rapport with customers keeps them coming back," Spinella said. "If magazines keep current customers in the fold, then it's worth it."
Spinella estimates that if an automaker's magazine has the right content and is geared toward the appropriate audience, it can increase loyalty by as much as 5 or 6 percentage points.
Some automakers also say they've conducted studies that show their publications have boosted sales and loyalty. Ted Kadala, owner loyalty manager at Volvo Cars of North America, said the company conducted a survey that said 26 percent of the 500,000 Volvo Magazine readers polled bought a Volvo product as a result of reading the magazine and 17 percent bought a Volvo service such as maintenance.
He also said 38 percent of the readers surveyed said they have passed the magazine to a friend.
Sharing the magazines with friends and family is yet another benefit of having such publications, automakers say.
And, unlike a forgettable TV commercial or a throw-away newspaper ad, consumers are more likely to hang on to magazines for many months, experts say.
Some observers, nevertheless, are skeptical that the publications will boost loyalty given that products, not magazines, are what appeal to consumers the most.
"I'm a pessimist about all the loyalty efforts," said Jeremy Anwyl, president of Edmunds.com, an online automotive information service. "I think when it's time for consumers to buy, they will be influenced by the cars in the market and the products they offer. I don't think a magazine factors into that thought process."