A Fresh Look at Dealership Communication’s Impact on Retention

How does your dealership communicate with customers?

Great communication is an investment. Luckily the return is a big one: the return of your customers. Especially when increasing customer retention by 5% can increase profits by 25% to 95%.

A focused effort on communication builds a deeper relationship with your customer, which results in increased loyalty to your dealership. This loyalty motivates them to return for everything from service and repairs to their next new car.

So what does it take to accomplish this loyalty-winning communication?

Great Communication Starts with Listening

The first thing to remember is that communication is a two-way street. No one likes being talked at and that’s not what builds a relationship. If you want to promote your products and services, then you’ll need to focus on listening to your customers.

Start by being available when customers want to talk.

Recent stats show that over 82% of consumers expect an immediate response from a business when they ask their questions. This might not be practical for smaller dealerships, but it does bring up an important point: what are you doing to communicate with customers and share the information they want, when they want it?

Good communication doesn’t always have to be verbal. It might simply mean having your hours and pricing clearly laid out on your website or social media accounts. Or even having live chat on your website with automatic responses to common questions when you’re unavailable.

Next, be willing to listen to their feedback.

Not only does listening to feedback increase the chance an individual customer will return, but it’s likely their feedback isn’t exclusive to them: other customers have probably dealt with the same issues!

Listening and responding to customer feedback opens the door for continual improvement that will benefit your customers. Plus being able to say that you changed your processes based on their feedback will make a customer feel valued and keep them coming back.

Communication Methods to Boost Retention

Good communication might start with listening, but it can’t stop there. Take advantage of every opportunity to connect with your customers and create a great experience that keeps them coming back to your dealership. Here’s a list of must-have communications methods for you to try:

Direct mail

If you want your customers to respond, consider direct mail as part of your strategy. According to the Data & Marketing Association in 2018, direct mail pieces had response rates up to 9%, compared to 1% for both email and social media.

These pieces can do a great job communicating your dealership’s value to customers and encouraging them to continue their relationship with you, especially when they are personalized.

Use direct mailers to send a reminder when it’s time for service or to include a special offer that makes customers feel like a truly valuable part of your business.

Text messages

Some communication methods are easy to overlook, like texting. The J.D. Power Customer Service Index Study found that only 3% of over 70,000 vehicle owners and lessees received text updates about their service. What’s even more amazing? They found that 27% of customers with mass market brand vehicles and 42% of customers with premium brand vehicles would prefer texting.

Not only do customers prefer this communication, but it’s effective as well. AutoNews shared research that showed 99% of SMS messages from a service department are read by customers. This opens the door to even more impactful conversations with your customers

Email reminders

Build emails into your customer communication to provide helpful information to your customers and continue to build the relationship, even after their car purchase or service visit.

Why not send them a quick congrats after their new car purchase? Or a helpful tip to prepare their car for the winter? Email is an easy way to invest in a relationship and educate your customers, not just to promote your services.

A clear website

Clear communication with your customers isn’t always direct outreach, either. An informative, helpful website is another tool to create an amazing experience for your customers and motivate them to return. Make it easy for them to find information about your services and hours, even your pricing.

In-person

Good communication with your sales and service teams is the foundation for customer retention. Walk through the ideal process with your team prior to a new sale so they are aware of their part when it comes to creating an outstanding experience. This might include a tour of the service department, follow-up phone calls, or a handwritten thank you note after a visit. Set a high expectation for their communication and you’ll see the fruit later on.

Maximize the Impact of Your Communication

Good communication goes beyond the specific ways or tools you use to interact with your customers. Use these tips to make the biggest impact every step of the way.

Keep it human.

A recent survey from Forrester claims that 57% of consumers say human communication would increase their brand loyalty and 58% say human communication would increase their likelihood of spending money with a given brand.

Having that human communication, whether outreach from a specific individual or simply adding a personal touch, truly impacts customer retention and increased business from those customers.

Add a regular cadence to your communication.

Think about the value of regular communication in your life. If you don’t communicate with a friend for an extended period of time, the relationship starts to fade. It becomes the “new normal” not to communicate or think about that friendship.

Your dealership isn’t exempt from this. If regular communication isn’t part of the relationship with your customers, you’re missing an opportunity to maintain relationships and retain your customers.

“A regular cadence of communications is integral for customer retention. You never know when a customer may reawaken.”
– AutoNews

Personalize as much as possible.

44 percent of consumers are willing to switch to brands that better personalize marketing communications, based on a survey by Infogroup. Keep track of the customer information that you have and use it to personalize their experience.

• What type of car did they purchase?
• When was their last service visit?
• What questions did they ask about their service?

Even adding something as simple as their first name in email communication can make a big difference in their loyalty to your dealership.

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Great communication is about building relationships with your customers, beyond the sales relationship. Bring extra value to your customers in small ways and continue the relationship through exceptional service visits. The long term value of retaining your customers is well worth the additional investment in communication.