Better Retention at 10% Higher Grosses!

Dealerships using data mining strategies to capitalize on their investment in existing customers can achieve truly measurable customer retention!

Dealers measure this retention by the number of previous customers who buy from them again—anywhere from five to 75 or more repeat customer sales a month, depending on the dealership’s units in operation.

Furthermore, dealers use this strategy to boost retail grosses by 10 to 15% for these reasons:

  1. Satisfied customers are less sensitive to price than new customers.
  2. They pay less attention to competitors and their ads.
  3. It’s easier to find and communicate with previous customers.
  4. These are your least expensive customers.
  5. Often, they service their vehicles with you.
  6. They talk favorably about your dealership (free advertising).

The potency of this intelligence is how it enables dealerships to identify previous customers most likely to respond favorably to telephone offers. There are various topics of discussion: to help them out of existing vehicle “problems”—such as an unfortunate vehicle now that a baby is part of your family; a color the spouse doesn’t like; a leased vehicle approaching mileage penalty status; a vehicle running out of warranty coverage or a desire for the newest model or features.

These are easy calls to make when you can offer new models for about the same monthly payment as their current vehicle. This is bona fide retention, because it helps the dealership overcome some of the key reasons customers often shop elsewhere when it comes to buy again:

  • The faded influence of superior quality:

    Previously a brand’s quality kept or lost customers. Dramatically improved product quality across almost all makes has eliminated this influence on retention.

  • The attraction of choice:

    Customers simply have so many quality brand choices today. For service, many dealerships market an “all brands” solution, and customers are being lured by independent, big box, and franchise service centers that dot American streets.

  • The tyranny of time:

    No one has time anymore. Waste it for customers through outdated selling processes and see them wander off to your competitors.

Dealers like Draper Chevrolet and Draper Toyota of Saginaw, MI report retaining 30 previous customers a month using this retention strategy, and also realize a 10 to 15% increase in gross or about $200 more per unit for the stores’ average.



This type of proactive selling helps dealerships get customers back into their stores before they even realize they might be in the market for a new vehicle! Furthermore, this effort often yields the trades desired for its preowned inventory. For the Draper dealerships, 80% of their database-driven sales results in trades ins. By sharing the service history of these Draper vehicles they build confidence in these preowned units. As a result, many of these trades turn in less than 30 days at increased gross profit.

Consumer loyalty is up to the dealer more than ever before and dealers have limited ways to retain customers. Strive to provide an experience that your customers cannot get anywhere else by offering world class service in all areas of your dealership The customer intelligence approach is perfect since it helps dealerships sell more vehicles to existing customers (now that’s measurable retention) and win real loyalty by solving their vehicle “problems.”

If you need references, contact me.

Boyd Warner is CEO of AutoAlert®, Inc. (www.autoalert.com), the most advanced lead generation solution available on the market today. Contact him at bwarner@dealermark.com.

Boyd Warner

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