4 Ways Customer Retention Will Keep You Profitable in 2017

Customer retention is all about thinking beyond the close to set the tone for the whole relationship

I know the past few years have been good for dealers. When your inventory’s always moving and sales numbers are rising every month, it’s easy to put customer retention on the back burner.

If you can close a deal right now, why worry about a deal you might close in five years?

The auto industry is cyclical, and those sky-high sales numbers will soon level off. When they do, you’ll need new ways to fill in the gaps: service revenue, referrals, and future sales with lower marketing costs.

Yes, salespeople will always focus on the deals they can close today. That’s their job.

But to be successful, your entire dealership has to think bigger. When you have a base of satisfied customers who are happy to service their vehicles with you, plan to purchase their next vehicle from you, and refer friends and family to you, you can grow profitably despite the industry slowdown.

If you’re ready to prioritize customer retention and protect your profits, these tips will help you get started.

1. Improve the sales experience

Retention is all about thinking beyond the close. The close still matters, however. The experience you give customers when they first buy from you sets the tone for the whole relationship.

If you provide an excellent sales experience, they’ll be happy to return for service and future sales. But if you provide a sales experience that’s inconvenient, aggressive, or unhelpful, customers have no reason to come back.

Make scheduling customers’ first service appointment part of your regular sales process. Getting this locked in, even months in advance, shows customers you’ll provide value for the life of their vehicle.

Also, when you do this, customers will be more likely to keep prescheduled appointments—and to schedule additional ones, creating a steady stream of service revenue.

2. ABH (Always be helpful)

To improve customer retention, your primary focus should be providing long-term value. You’ve already helped customers through the sales experience.

Now, prove you can help them through the entire ownership experience. After all, owning a car can be just as challenging as buying one, and customers need to know they have someone in their corner whenever they need support.

So prove you can be helpful even after the sale. Whether it’s by phone, email, or direct mail, contact customers using whatever channels work for your market.

And when you do, ask genuinely helpful questions: “Are you still enjoying your vehicle?” “Do you have any questions about your maintenance package?” “Did you know about this recall?”

Being proactive keeps your dealership front and center in customers’ minds—exactly where you want to be when they’reready to buy again.

3. Target customers at the right time

Once your customer retention machine is humming, how do you know which customers to target for repurchase? There are some clear signals to watch.

First, segment customers in your DMS based on their length of ownership and equity position. If you can get customers into a newer vehicle without increasing their monthly payments, that’s a pretty compelling reason to buy.

Your DMS has its limits, however. It shows you who could purchase—not who wants to. That data isn’t based on time or equity. It’s behavioral, and it’s stored in your CRM.

Using a CRM data mining tool, segment customers who have taken concrete steps toward making a purchase. Maybe they’ve listed their vehicle on Autotrader, or evaluated it on Kelley Blue Book. Maybe they’ve explored the sales side of your website. These are all signs a purchase is on the horizon—and soon.

Online behavior isn’t an exact science. You don’t know what offline decision-making is happening behind the scenes. A customer who visits your listings might be ready to buy in a few weeks . . . or a few hours.

But if your data mining tool shows you these signals, you can act quickly and catch loyal customers at exactly the right time.

4. Monitor your metrics

Speaking of reading signals, it’s important to look at the right data to gauge the effectiveness of your retention efforts. A customer might go years between purchases, and you don’t want to wait years to address a potential problem or to proactively jump on an opportunity.

Fortunately, there are metrics you can use to evaluate your success, and the biggest ones involve service. The service department is your most powerful tool for retention.

In addition to the boost you get in service revenue, 75% of repeat customers are also frequent service visitors, according to a Polk report. So it’s in your best interest to get customers into your service department as soon as possible.

Scheduling customers’ first service appointment right after the sale is an easy win, and you should aim to do it every time. But you also have to make sure customers show up.

If your show rates are low, that’s easy to fix. Confirmation emails and appointment reminders are proven to raise show rates, and will start your retention efforts off right.

It’s easy to get nervous when your sales numbers start to plateau, but don’t panic. You might not have as many new customers as you’re used to, but you can still succeed by taking care of the ones you have.

If you can deliver the experience your customers want, keep yourself top of mind, and reach out as a helpful partner when they’re ready to buy, you’ll create long-term relationships that keep your dealership profitable for years to come.

Brian Schmid is the dealer marketing manager at VinSolutions.

Brian Schmid


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