If you are like most dealers, you have, over the years, talked about how important customer retention is to your store. You have probably talked about how many customers you have lost and how much your bottom line would change if you could get your lost customers to return to buy more cars and more service from you. You may have even talked about ways to fix the problem – but chances are you never really did anything consistently that would actually make a difference. It was all talk. There was never really a commitment to change and there was never a real long-term action plan put into place – in other words, customer retention just wasn’t really a priority.
I believe that retaining customers for service really is the key to the entire dealership’s success – I mean think about it. You sell a car every 3-5 years – but customers need service 2 or 3 times every year – so the opportunities for additional sales, profit and relationship building really take place in service, right? And think about this – if you can retain more customers and get them to use your service department religiously they will not only help your bottom line, but they will also give you the first shot at the next car sale – what’s that worth? And consider for a minute, the impact that service has on your financial statement as a whole. Look at how much of your overall expenses that service and parts cover (service absorption) and imagine for a minute what your life would be like without that income – it isn’t pretty.
So my point is simple – you have to stop talking about customer retention and you have to start doing something about it. Imagine where you would be if you had made it a priority a few years ago. Imagine where you will be a few years from now if you make even slight improvements in customer retention – and imagine where you will be if you don’t – oops, I went back to the not so pretty part.
But dealers often tell me they don’t really know where to start? Well, I have 3 simple suggestions that are mostly common sense – but they will get you on your way to getting and keeping more customers. The 3 things are easy – but don’t be fooled – they aren’t that easy to do. You have to really dig in and make customer retention a priority if you expect to change. You have to not let up – you have to stay focused. You have to be the leader and you have to spread the word. So, here you go...
Start by meeting with your entire staff to discuss customer retention. Call it a Customer Retention meeting. Let them know that you are now focused on increasing customer retention and that it isn’t a fad or a passing thought – let them know that customer retention is – as Ford used to say – Job 1. Let them know that you expect them to help you and that retaining customers is a condition of employment. Let them know that you are ‘all-in’ and that you are going to make this a part of your dealership’s culture. Hold these meetings at least monthly and always discuss how important customer retention is to your store, to you and to them. Show them how improving retention will make a difference in their pay check. Measure it, post it and make sure everyone knows that it is a long-term project with great rewards, and make sure they know that it is high on your priority list.
Next, put some simple processes or programs in place that entice customers to do business with you over and over again. Consistently remind them when they are due for service with mailers and email and if they don’t show up – remind them again and again. Don’t let them forget that you exist and that you care. And when they show up give them reasons to return. For example, make sure you have some kind of customer loyalty program – almost every business has one because they make so much sense. Customers that are a member of your loyalty club will be, well, more loyal, will spend more and defect less. You are probably a member of several loyalty clubs – and they work for you personally so why not have one for your store, for your customers? Keep your club simple and easy for customers and employees to understand and don’t make the reward too little or stretch out too long in between rewards – remember customers need their car serviced every 4-6 months – you have to reward them a little bit each time. And whatever loyalty plan you decide on, make sure it stays in touch with customers each month – it is easy to forget about things in this fast paced world we live in and when they forget about you, they go someplace else. So keep it easy, stay in touch and reward often.
Last, but not least, make sure you do the things that customers like – show you care. Answer the phone, be polite, and greet them quickly when they arrive. Eliminate lines at the cashier – people hate lines, (in fact, I think you should get rid of your cashiers) and make sure you valet park completed vehicles so customers get that “Wow” feeling when they leave. Always offer and explain your multi-point inspections and always ask about tires and wiper blades – it shows you care and it increases sales and customer retention – think about this – nothing is worse than selling the customer a $300 service one day and then 3 days later they hit a rainstorm and can’t see out of their windshield – they question if you did any of the service work and why you didn’t replace the wipers and you don’t need that kind of bad publicity.
Come on guys - customer retention really isn’t rocket science. Focus on it and put processes in place that give customers real reasons to return and show you care by doing things that customers like – it’s that easy. The challenge is in doing it. The challenge is to see the future – see what it will look like if you focus now. The challenge is to take control of your store and lead them down the gold lined path of customer retention. You can do it – but it will take self-discipline. Are you up for the task?