Customers are the lifeblood of a dealership, both on the lot and in the service lane. But the nature of the purchase-to-service-to-repurchase relationship is more cyclical than we give it credit for.
Recent DMEautomotive research shows customers with more service visits over the course of a four-year period had higher repurchase rates than customers with low or no service visits.
Converting customers who purchase a vehicle from you into customers who service their vehicle with you is vital to increasing vehicle repurchase rates and customer lifetime value. In fact, when customers make at least one service visit after a vehicle purchase, their repurchase rate increases from 11.1% for non-servicers to 16.7% for one-time servicers.
That means if an additional 100 of a dealer’s new vehicle owners return for service just once, that dealer will receive an additional five vehicle purchases over four years.
The problem is, however, that purchase customers are not coming back for service. According to our research, less than half of all vehicles sold from a dealership come back into its service lane. One in every two customers with an established purchase relationship is going elsewhere for service, and are unlikely to return when they’re ready to start looking for their next vehicle.
So how can we turn this problem around? The following are four best practices that can help.
1. Get connected with your customers
As it turns out, only one in five dealers has the means or a process to contact purchase customers in order to set their first service appointment. How can they come to see you if they don’t know they should?
Send a service reminder communication that offers incentivized pricing for their first visit, and remind customers of their service appointment the day before the appointment. After all, one in five consumers indicated they missed an appointment merely because they forgot. This helps to reduce no-shows by reminding them of their appointment and providing an opportunity to reschedule to a more convenient time, if needed.
Have customers carrying smartphones? Offer a dealer-branded mobile app with useful, convenient functionality. With an app that allows customers to set service appointments and pay their repair order at the tap of a finger, they’ll be happy to keep in touch. In fact, DMEa research shows customers using a dealer-branded mobile app are 73% more likely to purchase a vehicle, and make 25% more service appointments.
2. Make every effort to work around your customers’ needs
Provide an after-hours call service, offer loaner vehicles while your customers wait for their service to be completed, and complete as many services as possible within the same day. The easier you make the sales and service experience for customers, the more apt they will be to return for more.
3. Timing is everything
How many times have you made plans months in advance, only to forget when the day came? Consider contacting your customer close to their scheduled maintenance due date. DMEa data shows dealers who call customers 30 days to 60 days before they are due to schedule their first appointment have a 10% higher conversion rate than dealers who do not.
4. Keep in touch
Call all no-show customers to reschedule their appointment. According to our research, most customers who missed an appointment in the past two years did so because something unanticipated came up. So show your customers you missed them and still want their business.
In the service world, there’s definitely work to be done. But armed with these best practices, dealers stand a strong chance to hold on to customers, boost their sales revenue, and watch more new vehicles drive off their lot every year.
Mike Martinez is chief marketing officer of DMEautomotive, the industry leader in science-based, results-driven automotive marketing that provides a range of marketing services to the biggest and most innovative automotive organizations in the industry. For more information, email [email protected].
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