It’s long been said that acquiring a new customer costs 5 times as much as retaining a current customer.
So then why do so many companies spend the majority of their time, energy, and budgets looking for new business, when they could be more focused on preserving the customers they already have? According to a recent study by Invesp:
- 89% of businesses see customer experience as a key factor in driving customer loyalty and retention.
- 76% of companies see Customer Lifetime Value as an important concept for their organization.
- The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
- Increasing customer retention rates by 5% increases profits by 25-95%.
Those numbers are pretty telling, and certainly applicable for dealer service departments — whose revenue goals hinge on engaging, delighting, and retaining their vehicle owners.
To both maximize fixed ops profits and generate new car sales, getting customers to return to your dealership for service is critical to your success. Here are 10 of the most compelling automotive customer loyalty strategies fixed ops and service directors use to increase retention.
1. Provide quality work and great customer service.
Let’s start with the most obvious. Fixed ops departments pride themselves on the quality of their work and service, and despite threats from low-cost competitors, superior work is what really builds trust and keep loyal customers coming back. As for the customer experience, there are many services and amenities your customers expect these days. Make sure you’re meeting customer expectations every time they visit you for service — especially because even the most loyal of your customers say they’d consider going elsewhere after just one bad experience (according to DriveSure’s recent Dealership Service Retention Report).
2. Have a memorable sales to service handoff.
Nothing fosters customer loyalty quite like making them feel comfortable. A quick and easy way to do that? A simple introduction by your sales rep to the service team after a vehicle purchase. You’ll put them at ease and set the stage for quality care and personalized service from the outset.
3. Get involved with your community.
Car dealerships are community organizations…so get out in the community and make your presence known! Partnering with charities and local groups to help them through car wash fundraisers and pairing your referral program with local organizations are just a couple of ways to stay top-of-mind. By getting your name out there and providing value, you’re more likely to become the go-to place for the community for everything from oil changes to tire rotations.
4. Rewards and contests through social media.
We’ve seen some dealer service departments find success by engaging their customers through social media. If you have a Facebook or Twitter account, put out a post encouraging your followers to “guess the score of the big game,” and offer a $50 reward card to whoever wins (first to comment with correct score, or first that comes closest). Getting creative on social media is a great way to increase your awareness and stay top of mind with customers — you can even consider reloading the gift card to incentive referrals in the next 24 hours.
5. Take extra care of unsatisfied customers.
By simply keeping a close eye and staying on top of your customer reviews, you can show your current customers you’re always listening to them, actively trying to meet their needs with better service. When you see a negative review, reach out directly to the customer to discuss how you can fix their issue. Opening up a cordial dialogue, following up with a personal thank you card (and even small gift card for a cup of coffee) can go a really long way.
6. Customer appreciation initiatives.
Provide unique offers, events, and rewards to your more frequent customers. By offering discounts in your online dealer store, exclusive service specials, free vehicle detailing, or even special gift packages, it shows you’re willing to go above and beyond to “surprise and delight.”
7. Send birthday and holiday cards.
A little personalization can go a long way. In fact, 88% of marketers say personalized messaging can improve results. Sometimes it’s the little things that play a big part in retaining customers — like sending birthday cards and holiday greetings via email (50% of service department customers prefer email communication between visits, according to DriveSure’s Dealership Service Retention Report).
8. Partner with dealership benefits programs.
Some programs make it easy for new car dealerships to provide a unique suite of benefits with each routine maintenance visit. Not only do these benefits encourage customers to return the next time they need scheduled maintenance, they also establish the dealership’s service department as the go-to place for tires and unplanned repairs.
9. Offer your own maintenance packages.
By giving your car-buying customers the benefit of 12-months of complimentary maintenance, you immediately plant the seed of long-term loyalty. Then it’s up to you to nurture and grow the relationship with exceptional customer service and high-quality work (see #1) Don’t give your customers the option of immediately going elsewhere for service…and don’t force them to use you through fear of voiding their warranty. Getting off on the right foot is a great first step in customer retention, pardon the pun.
10. Loyalty incentives.
Pairing dealer loyalty incentives with your complimentary maintenance package can further foster long-term retention. Allowing customers to earn points for every dollar they spend on service will keep them intrigued and engaged to continue their service with you after their free package expires. With loyalty account activation, customers can begin accumulating points toward exclusive service discounts and even future vehicle purchases.
Create a Service Department Your Customers Can’t Resist
Interested in learning more about how you can make your dealership the only one your customers depend on for maintenance, tires, and repairs? We can help! Schedule a free 30-minute consultation today and we’ll show you exactly how DriveSure can improve customer loyalty for your dealership – and what that will mean for your bottom line.
The 2020 Dealership Service Retention Report
INSIGHTS FROM NEARLY 2,000 DEALERSHIP CUSTOMERS
Learn why customers choose to return to their dealership for service and why they don’t. Plus, we reveal your biggest opportunities for encouraging customer loyalty.