Customer Retention Through Complimentary Maintenance Part 1: Beyond Auto Manufacturer Maintenance
It’s a struggle that every business faces, but it’s one that’s especially daunting for auto dealerships: what’s the best way to retain customers? The old sales adage says that it costs five times as much to bring in a new customer than it does to sell to a current one, but in this day of constant competition both in the real world and online, how can dealerships build loyalty with their customers?
The answer isn’t holding tent sales and displaying huge, inflatable gorillas on your roof. While “look at me!” tactics might attract the attention of potential new customers and a slew of “looky-loos,” bringing back current customers requires offering them real value.
To boost customer retention, auto dealerships should look at improving their process around transitioning their customers from sales to service. Some manufacturers provide some basic maintenance coverage with the vehicle purchase but these auto manufacturer maintenance plans aren’t enough, either — to truly master the art of customer retention, dealers have to launch their own complimentary maintenance programs and run them effectively.
Why Auto Manufacturer Maintenance Doesn’t Cut It
While the auto manufacturer may offer their own maintenance program, these types of programs aren’t geared towards bringing customers back into your dealership. First, auto manufacturers typically offer maintenance schedules with half of the visits suggested by dealerships. This greatly reduces the number of times a customer will walk back through your doors. In fact, 2019 saw many manufacturers making big cuts to their existing maintenance programs.
Next, auto manufacturer maintenance plans won’t necessarily bring your customers back to your dealership. Instead, they allow customers to return to any franchise dealership. While this is good for building brand loyalty, it doesn’t help you build a strong base of lifetime customers for your dealership. If a customer gets their next oil change or buys their next pickup truck at the Chevy dealership across town, that benefits Chevrolet … but not you.
How Complimentary Maintenance Leads to Customer Retention
According to NADA research, the cost of advertising per vehicle sold has risen steadily, hitting $628 in 2019. One way to bring those costs down and boost revenue is to retain your current customers. The key to being the first place on customers’ minds when they need an oil change or are in the market for a new vehicle is by building customer loyalty.
It’s difficult to create a loyal base of customers if they only see you when they purchase their vehicle and then pop in for we-owes and warranty repairs. Going the extra mile to offer complimentary maintenance helps build a solid relationship with your customers, familiarizing them with your staff and the quality of service you provide. This will ensure that they not only return to you for all complimentary maintenance visits; they’ll also call you up when their vehicle needs non-warranty repairs or when they, a friend, or a family member are searching for a new automobile.
Expanding Beyond Dealer Maintenance
For dealerships whose manufacturers offer a maintenance plan, it’s helpful to extend the complimentary maintenance with a manufacturer wrap plan. This offers dealership maintenance on top of the already existing manufacturer maintenance, which will help you build a stronger connection with each of your customers.
If the manufacturer’s maintenance on a new car features a 24-Month/24,000 Mile maintenance program, you might want to extend the coverage at you by an additional 12-Month/12,000 Mile plan that will include additional services that are only available if the customer returns to your dealership for service during the term of your plan. In addition to building customer loyalty, this puts you in charge of coverage, pricing, and reimbursement rates.
It’s not enough to simply launch a complimentary dealer maintenance program; it must also be run conscientiously and tweaked according to customer feedback. In Part 2 of our Customer Retention Through Dealer Maintenance series, we’ll talk about how to monitor how well your dealer maintenance program is doing in order to turn lost customers into customers retained.