Automotive Customer Retention Versus Conquest
Customer retention reigns supreme in the retail automotive industry. If your dealership is constantly looking for a new hook — promotions, funny commercials, giant inflatables, etc. — to bring customers in (or to bring them back), you’re doing it wrong.
Those tactics will always have their place, but the key to retention lies in building long-term relationships and cultivating loyalty through regular service visits as a part of a Certified Maintenance® Complimentary Maintenance Plan. View the Conquest VS Retention Infographic to see how a Maintenance-Included Strategy works.
A Conquest Marketing Approach
In the past, most franchise auto dealers focused on conquest by spending money on advertising to get people to walk through the showroom doors, ultimately, to make the sale. The sales staff only focused on selling new cars — get customers in a new vehicle and send them on their way.
The problem with this scenario is that the customer was then in control — and the only time they returned to the dealership was for warranty work. When they needed routine maintenance or repair, they went elsewhere.
Whether customers returned to the mass merchandiser, “their mechanic” or a more conveniently located dealership — they weren’t returning to the issuing dealership. However, the customers who WERE returning to the issuing dealership for service were more than twice as likely to also repurchase their next vehicle from that dealership.
So, why weren’t dealerships providing a direct link to service? Wouldn’t it make sense to give each customer an incentive to return to their dealership, instead of their competitors, for service?
Customer Retention Approach
The bottom line is that it’s not enough to just sell the first vehicle and hope the customer returns to you for service — or for their next purchase. You have to give your customers a reason to return. That’s where a Complimentary Maintenance Strategy, such as Certified Maintenance®, comes into play. By including maintenance with the sale of each vehicle, this approach works as a retention strategy by giving EVERY customer a reason to return to the issuing dealership for service.
Here’s how it works:
- Rather than spending money on sales and service conquest advertising campaigns to attract new customers into the sales and service funnel, a Complimentary Maintenance Strategy puts a plan in place before the vehicle is delivered.
- The key to a Complimentary Maintenance Plan is focusing on dealership loyalty by driving customers back to YOUR dealership where they made the original purchase. This is not Prepaid Maintenance — it is Complimentary Maintenance. You HAVE TO give it away, maintenance has to be packaged with EVERY vehicle to give EVERY customer a reason to return, and customers can ONLY return to the issuing dealership or dealer group where the car was purchased.
- By including Complimentary Maintenance with every vehicle you sell, your dealership takes control of service habits. The customer no longer has to decide where to return for maintenance, because you’ve already given them a reason to return to your dealership. A Complimentary Maintenance Plan provides the roadmap, retention tools, and strategies to drive customers back, focusing on three key service intervals.
- Routine Maintenance
- More Expensive Repairs
- Vehicle Trade-In and Repurchase
The strategy is simple: by giving customers a reason to return for the first 2-3 visits, your service department will have a larger customer base and more opportunities to interact and offer additional service upsells leading to long-term relationships and lifetime value. Our Certified Maintenance® Complimentary Maintenance Plans are proven — and guaranteed — to double or triple CP/RO count in the first 12 months of ownership.
Are you ready to start saving money on service advertising dollars and to focus on creating more Customer Pay visits? Checkout the Conquest VS Retention Infographic to see how a Maintenance-Included Strategy works. Or, if you’re ready to discuss your customer retention strategy, book time with an automotive customer retention pro.