customer retention plan

Is Your Current Customer Retention Plan Paying for Itself?

Marketing and customer relationship management strategies are an essential part of an auto dealership’s recipe for success. CRM gives you a window into what your customers need and want, helps you better serve them, and allows you insight into what happens after each vehicle sale. Utilizing marketing and customer outreach also helps you boost your customer retention plan and minimize customer churn.

All of those efforts to manage the dealership/customer relationship can get expensive – as can reaching out to find new customers. What many dealerships fail to realize is that by adding complimentary maintenance into your overall customer retention program, you can help recoup some of the costs.

Marketing Costs Add Up Fast

It costs money to make money – and for auto dealerships, the cost of keeping customers in the loop can mount very quickly. NADA estimates that the advertising expenses for an average dealership are around $494,000. Whether you’re sending out direct mailers to remind customers of upcoming service appointments, running advertisements on television to bring in new customers, or reaching out to customers via digital channels, the costs add up fast. In 2017, dealerships were estimated to have spent, on average, 55.4 percent of their marketing budget on digital marketing alone.

When these efforts result in a new sale or bring a current customer back through your door, they pay off. At the same time, every piece of mail that gets thrown away without being read or Facebook ad that someone scrolls past is marketing money gone down the drain. Putting a complimentary maintenance program in place helps attract and retain customers … and when it doesn’t, it allows dealerships to put money back into their marketing budget.

Why Complimentary Maintenance Must Be a Part of Your Customer Retention Plan

Implementing a complimentary maintenance program has many benefits in and of itself. It helps your auto dealership stand out amidst the growing number of digital disruptors who don’t offer customers complimentary service once they drive away in their vehicle. When customers purchase from your dealership, it’s important to educate them about your complimentary maintenance program and the benefits of seeking service at a dealership rather than a neighborhood mechanic to ensure that they utilize their complimentary service visits at your dealership.

Once customers do return to your dealership for maintenance, you have an opportunity to continue to build a real and lasting relationship with them. Once established, this raises the likelihood that they will return to you for non-warranty repairs, as well as return (and send friends and family members) to purchase vehicles in the future.

What About Recouping Marketing Costs?

Although every dealership prefers that each of their customers utilize all of their complimentary maintenance visits, one of the benefits of putting such a program in place is that if customers don’t use their visits, that money can be used to offset the per-vehicle cost of the program. This can become a credit that can be infused back into the marketing budget. Unlike mailers that don’t get read or Facebook ads that go unclicked, complimentary maintenance is a customer retention/marketing strategy that recoups your costs even when it fails to connect with a particular customer.

This makes complimentary maintenance more than just a tool; it’s an asset for auto dealerships. It’s a more active customer relationship strategy than simply sending out mailers or creating online ads and hoping someone responds to them. Complimentary maintenance helps you actively build relationships and manage your brand image with the customers who return. As for the ones who don’t – you’ll be able to use those extra advertising dollars to figure out how to go out and get them!