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automotive customer retention

Automotive Customer Retention — Are Your Customers Coming Back?

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Any franchise auto dealer worth their salt can quickly and easily tell you how many cars they’ve sold. We’ve all got that info readily available. But do you know how many of those customers were repeat buyers? You know your sales numbers, but do you know your automotive customer retention numbers?

Ask yourself these questions. Do you know your dealership’s current state? Do you know how many customers come back after the delivery of the vehicle? How many don't come back at all? How many come back once, twice, more?

Struggling answering these questions? You’re not alone. Compiling and consistently tracking this data isn’t easy and it’s certainly time-consuming. Not that it can’t be done; you absolutely can (and should) be doing it. But your core focus is on selling and servicing vehicles, so why not get a little help?

Here’s how to take advantage of robust automotive customer retention that will put the data you need at your fingertips, freeing your time up to do what you do best — sell and service.

Starting With an Automotive Customer Retention Study

In our dealings with auto dealers across the country, we’ve found that very few know the answers to the questions we listed above. So we set up a customer retention study that we run our dealers through. The study goes back 36 months, looking at all your sales from 36 months ago. Then, we do a download from your service history to determine how many of those people that purchase a car have serviced at your dealership during the first, second, and third year of ownership, and how much revenue was generated in service for warranty, customer pay, and internal. Generally, the longer they own the vehicle, the less they visit the dealership.

MaintenanceProgram.com is a one-stop shop to post claims online, remind customers of upcoming service appointments, reach out to defected customers, and to track customer retention progress, service history, CP/RO count, service income, vehicle repurchases. and more. Most dealers start out with a 12 month complimentary maintenance package. After those 12 months, we measure who keeps coming after the free stuff is over and how many of those people might upgrade or renew their benefits package on the service drive.

We can give you detailed reporting around not just how many people purchase and how many people service, but also our vehicle repurchase report shows how many people trade their car in or buy another vehicle in the same household. Customers that are happy generally will influence other people. It could be their wife, their kids, their mothers, their fathers. Just that one vehicle purchase has a lot broader reach than what a lot of people realize.

The State of Your Dealership

Next, we’ll run our current state retention report. This analyzes how many new car buyers service with you after they buy the car. Then we break it down to how many people had zero visits after they bought the car, how many people had just one, and how many people have been back multiple times. But even if you’re getting people to come back over and over, that doesn’t mean you’re retaining them. Most consumers aren’t trading out of their cars until years five, six, or seven.

So complimentary maintenance programs are great, but you also need to make sure you’re selling maintenance contracts through a service drive maintenance program. It’s about building a relationship with every customer who drives off of your lot in their new vehicle. When you provide a complimentary reason to return that includes friendly service reminders, customers are more likely to return for basic maintenance. Provide them with a great customer service experience by getting them in and out of the service department in 30 minutes or less, and they’re likely to return yet again. This translates to customers relying on your dealership when repair items pop up down the road. It also means that when it’s time for a new vehicle, they’ll walk through your door instead of the doors of the dealership down the street.

Measuring Results

First of all, a dealership should be aware of how many visits are required to have truly “retained” a customer and tailor their dealer maintenance offering to reflect this. While some manufacturers measure retention success based upon one visit during a 12-month period, many dealers know this isn’t realistic. An average vehicle with synthetic blend oil will need 2.5 oil changes per year.

Dealers have to offer more by customizing a plan based on the make of vehicle they sell to ensure that they maximize each potential customer visit. In order to tell if the programs you’ve put in place are working, you’ve got to rely on more than perception. The numbers don’t lie, so it’s important to keep tabs on those numbers at all times.

Again, MaintenanceProgram.com is an excellent way to keep track of sales and retention numbers on a day-to-day basis. It allows you to view customer retention reports, as well as manage information for follow up calls and interactions with previous customers. Quarterly reviews can also provide a realistic view of where your numbers are currently at in comparison to other times of the year. In addition to this, we suggest end-of-year meetings to look back at what worked, what didn’t, and to strategize and make changes for the year to come.

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Administration Book Review Customer Reviews CX Dealership Loyalty Efficiency F&I Lost Opportunities Marketing Pay Plans Profitability Relationship Building Retention Strategy Rewards Programs Sales Process Service Revenue Service Traffic Social Media Staff Training Technology Vehicle Repurchase
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About the Author

Richard Knight

Rick Knight is an Automotive Customer Retention Executive who founded Certified Maintenance® Programs in 1996. Rick has been successful in building custom retention strategies for thousands of auto dealers to better than double CP/RO counts in the first 12 months of ownership, drive back 34+% of lost opportunity customers and help auto dealers Sell The Next Vehicle™. 

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