Struggling with Customer Retention?

What are you doing to prepare for the coming changes in the Auto Industry? Your plans must include an increase in service retention.

Every dealership in the United States strives to have better retention. It is no secret that the car business is easier, more profitable and a heck of lot less stressful when working with repeat customers. It is common practice for Dealers to accept the reports from the manufacturer concerning their retention.  This is expressed as a percentage and an average of 34% to 45% is the normal range. One must keep in mind that most of these reports only state the retention figures of new and certified vehicles. In today’s market the preowned vehicle is the predominate product that a dealer has to offer the public due to new product shortages.  Most Dealers have little, if any, knowledge of their used vehicle retention.  The retention of this market segment is somewhere around 7 %to 12%. Pretty sad when this is the type of customer you want in your service department.  Why so low?  This type of customer buys used because of economics and then goes to all your competing businesses (Transmission/engine shops, tire stores, Jiffy lube, etc.) because they think your dealership is more expensive.

How do we get this customer to give us their business?  You must give them a proposition that they cannot refuse!

There are only two things a dealership needs to have a successful retention program that will appeal to both the new and preowned customer.  You need to offer complimentary benefits and reward them for doing business with you. To get the customers involved you will need a solid brand and a means to deliver your message. And finally you will need ongoing training and accountability. Sound too easy? It really can be broken down into these simple steps.

First the benefits. Benefits are something that the customer receives just for doing business with you. This can be complimentary lifetime engine or powertrain, oil changes, tire rotations, key replacement, car washes or any combination of these and more. The Program term can be anywhere from 1 month / 1000 miles to lifetime. You decide on the Package of benefits you want to offer and for how long you want to offer them. Next the rewards.  Rewards are what the customer receives for continuing to do business with you. It’s simple…the customer earns rewards when they spend money with you. The more they spend the greater their reward. Many Dealers award customer points when they spend dollars, which you rebate to them upon their next visit.

To get the customers involved and onboard with your program you will need a brand and a means to deliver this brand’s message. Decide on what you want customers to associate you with to start developing your brand. Do you want to be the Powertrain for Life store or the Oil Changes for Life store or both or something else? Your brand can include a slogan or just a story about who you are and what you do in the community and how you assist your customers with their automotive needs. Building a strong brand is an art form and you may want to enlist the help of some professionals if you do not feel that you are able to absolutely nail this part. How you are perceived by your market goes a long way to success with your program.

How do you deliver your brand message? This is the fun part. There is no wrong way other than not going all in. Be creative. Dealerships have had success with brochures, custom log-in and landing pages, desk mats, banners, posters, web graphics, addendums, service drive cards, custom email blasts, personalized enrollment mailers, direct mail, stickers, flyers, Frisbees, postcards, glovebox enrollment cards, mobile apps…the sky is the limit. If reaching out with your brand works when you do it timidly, imagine how well it will work when you are aggressive with it! Your brand is who you are and must include it in everything you do.

Now for the training and accountability. There are dealerships that have done this internally and had some success. There are many more that have tried, failed, and abandoned the idea of a retention program, not due to a lack of talent or knowledge. It normally just comes down to time. Very few people reading this article right now have the time to train and mentor every employee in the dealership through the metamorphosis that is required to have success with retention. Every customer interaction with every employee must drive retention. Every phone call answered, service appointment made, every sales follow-up call, every desked deal and every service bill paid will have the whole interaction designed to drive retention. Once you have trained everyone on everything, now you have to mentor and make sure it sticks. Sales managers have been trying to get every UP logged for decades and how is that going? This is the place where the right partner can really help.

If you decide to look for a partner to help you achieve your retention goals, look for a company that is about process and not just product. Every company out there will offer some level of training. Bad training is worse than no training. The company might lose you as a customer after a year. Think about how many customers you will lose during that year. Look for a partner that will stay with you and your people and will help you every step of the way. You need someone that will not only set you up, but help you straighten things out when you start to go off track…before you derail. Ask any potential partners for references that they can speak with and ask those references not only about successes but ask them about a time when things got tuff and how the potential partner handled it. True character is shown in times of trouble.  Dealership for Life is just that kind of company!

Good luck in undertaking your journey to retention. For a free copy of a couple of dealerships’ branding material please email sales@dealershipforlife.com or go to our web site at dealershipforlife.com where you can discover who we are and how we can partner with you to build a solid retention program. You can call Jack Garrity, VP of Sales at 904-219-9110.