3 Strategies to Increase Dealership Customer Retention

Posted by Whitney Williams on Mar 11, 2021 4:37:43 PM


There’s no customer more coveted than the repeat customer. Now, more than ever, dealerships must stand out in the crowd and maintain a good reputation. Loyal customers achieve both those ends. Practice these three strategies to keep your customers pleased. In turn, those loyal customers will refer their friends and utilize your store for all their automotive needs. 

Know the Worth of Retention

Awareness about the worth of a retained customer starts at the top. Management spares no expense when publicizing and rewarding sales goals, yet largely undermines the value of retention. The culture in many dealerships focuses on selling the car, then letting the customer fade into the abyss. In truth, a repeat customer should be the apple of your dealership’s eye. Automotive Mastermind states, “Loyal customers are cheaper to sell to, less likely to bargain aggressively on pricing, more likely to generate service and other fixed-ops revenues and are a source of high-ROI referral business”. Dealers would do well to stay in touch after the car sale; and put a strong emphasis on service, where customers are reappearing. Harvard Business Review discovered a 5% increase in customer retention would boost profits by 25-85%, dependent on the industry. Some dealerships are leaving that potential profit completely untapped—others are capitalizing. Automotive Mastermind reports that “General Motors saw that a 1% improvement in customer retention was worth $700 million, and promptly made customer retention statistics part of the annual bonus calculation for its leaders”.

After the car sale, the service drive is the biggest point for customer satisfaction. Customers who have a stellar car buying experience are more likely to return for service. The ongoing service experience is more likely to stick in their mind, as opposed to the one-time interaction with their salesperson. For that reason, a great experience in the service drive should be a high priority. Service employees are able to upsell accessories and talk face-to-face with loyal customers about trade-ins.

Give Loyal Customer Perks

Once you sell a car to a customer, you must find a way to keep them engaged. An article by izmocars makes the point that, “Showy gestures may not be the way to trigger customer delight. Studies have shown that customer retention and loyalty improves when their problems are solved quickly and easily”. It’s possible to really do too much—to overthink the whole thing. Providing excellent customer service is the best way to gain—and keep—loyal customers. That being said, everyone loves perks. Put yourself in your customers’ shoes and think about what is genuinely beneficial for them. A dealership hat, or cup, is not that appealing to the majority. Offer your loyal customers free or discounted service products, the ability to work towards complimentary oil changes, or even win gift cards. Get creative in what would appeal to your customers.

Make Everything Personal

At the end of the day, there’s no substitute for good rapport between two people. Salespeople should be willing to talk about themselves, and take time to get to know the customer. Best practice for post sales paperwork is to make notes about the customer, so you can remember what they told you about themselves. If your last customer is a proud new grandpa, you know any follow up communication should include asking about the baby (and maybe some accessories that make toting a baby easier). Personal communication, rather than canned marketing messages, are more likely to receive a response and create a repeat customer. 

Automotive Training Network suggests a list of ways to retain customers, such as: spending extra time with them, paying attention to detail, and showing gratitude at every opportunity.

While you’re building a relationship with your customer, you can increase retention by making an introduction to service. That way, the customer already knows the service manager’s face, and is familiar with the service drive. You also give your service staff an opportunity to build their own rapport.

The best way to start focusing on customer retention is to start. Get retention numbers out front and center to your staff, and make a plan to retain 1% more each month. Which strategy can you implement today?

Insignia Group is the leading solution for selling accessories in the showroom and online, at the point-of-sale. We provide expert consulting to get your dealership profitable in the accessory arena, cutting-edge technology to present Vehicle Personalization, and high level training to unify your store. If you aren’t selling accessories with a focused process, you’re leaving money on the table. Let us help you join the Million Dollar Club in 2021.

Topics: Increase Profits, Dealership, success