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Customer Retention Made Easier: How to Create a Service-Driven Experience

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The Role Your Service Department Should Play in the Car-Buying Experience

The more things change, the more they stay the same.

As the retail automotive industry continues to evolve, sometimes change seems to be the only constant. Empowered by the Internet, today's car-buying consumers are more knowledgeable and discerning than ever before. At the same time, ever-improving automotive technology results in a level of vehicle sophistication the likes of which these consumers had not previously encountered.

With inevitable change constantly confronting your dealership, it's easy to lose sight of those key components of the retail automotive process that remain unaltered. Yes, technology has improved dramatically, but today's vehicles still feature many of the same core elements — transmission, brakes, headlights, etc. — found 100 years ago. Likewise, your dealership's ability to offer exceptional customer service remains fundamentally important to your success with achieving strong customer retention and, in turn, growing dealership profitability.

Customer retention should be at the heart of everything your dealership does. If securing a new customer is comparable to climbing a steep mountain from a dealership-effort standpoint, then retaining an existing customer is akin to easily traversing a rolling hill — then finding a pot of gold on the other side. The value of return buyers simply can't be overstated. It's up to 10 times more expensive to acquire a new customer versus maintaining a current one, and it's estimated that 80 percent of your future revenue will come from the top 20 percent of your existing customers.

 

Creating A Service-Driven Experience

While much has been written regarding the customer-centric nature your sales staff must develop, the customer interaction executed by your service department also proves vital to boosting your dealership's customer retention rate. Here's the role your service department should play in the car-buying experience.

 

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1. Introduce

Before a vehicle purchaser drives off your dealership's lot, there are several introductions that should take place. During the sales process, educate customers regarding Maintenance-Included incentives. A complimentary maintenance package — such as those offered by Performance Administration — operates as a customer retention plan to convert transactional value into lifetime value.

When it comes to complimentary maintenance, your objectives are to build better relationships with customers and foster habits that usher car-buyers back to your dealership whenever service needs arise. As a result, your dealership remains top-of-mind the next time a purchasing opportunity presents itself — the ultimate victory from a customer retention standpoint.

The other introduction involves putting car-buyers in touch with your service department. Traditionally, dealerships have suffered from a corporate silo effect resulting in a departmental disconnect between sales and service. By completing a clean customer hand-off, your service department can reinforce the sales staff's message and promotional materials by providing customers with a brief presentation regarding the merits of utilizing a dealer maintenance package.

 

2. Schedule

Your doctor, dentist, veterinarian, accountant, hair stylist and aerobics instructor don't want you to leave their premise without scheduling your next appointment. Why should your auto dealership be any different? Before your car-buying customers receive their keys, attempt to schedule their first service visit to ensure their return.

Regardless of whether your sales staff or service department takes the lead, an effective first-service scheduling strategy requires an enhanced level of cooperation between both. Aligning hours of operation and commission-based incentives for both departments might seem cumbersome, but it's well worth it. One study found that dealer-branded maintenance programs can increase service revenue by 15 percent and customer retention by 60 percent, if not higher.

 

3. Tour

You've introduced vehicle purchasers to both your dealer-owned complimentary maintenance offerings and your service department, as well as scheduled their first service visit, yet your customer retention plan is not complete. Rather than stopping there, take the introduction a step further by giving prospective service customers a facility tour to better familiarize them with your service department.

Chances are most of your car-buying customers already have an auto mechanic, so you'll need a strategic approach to win over their service business. A tour enables you to explain the maintenance requirements associated with a particular customer's vehicle, introduce service managers and provide directions regarding where to pull a vehicle into the service drive. You're essentially helping customers develop a comfort level.

Want to take your service-driven approach to bolstering customer retention to the next level? Consider hosting new customer clinics whereby you provide an open forum for car-buying customers to interact with your trained service technicians. By capitalizing on the important role service plays in retaining your valuable customers, you can convert your service department into a profit source for your dealership.

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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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