Customer retention in the automotive industry is more important than ever: Loyal customers spend more, return often, and refer others, bringing in new business. Retaining customers also saves your dealership money on marketing and builds a strong reputation.
Dealerships are using new strategies like loyalty programs, personalized services, and technology to keep customers coming back. It isn’t always easy. Dealerships like yours do face challenges, but with the right automotive customer retention strategies, you can master this essential part of driving profits.
Summary
Top Automotive Customer Retention Challenges
Customer retention in the automotive industry can’t be ignored. But successfully keeping customers loyal requires addressing various issues that can drive them away. Here are the top customer retention challenges dealerships face.
Competition from Other Dealerships
Competition is fierce in the auto industry. Many dealerships offer similar vehicles and services, making it hard to stand out. Customers often shop around for the best deals, which can lead to losing them to competitors. To overcome this, dealerships must provide exceptional customer service, offer unique loyalty programs, and ensure a personalized experience. Building strong relationships and maintaining consistent communication can help differentiate a dealership and keep customers coming back.
Maintaining Service Quality
Consistently high quality should be a top goal of any service department: Customers expect reliable, efficient, and courteous service every time they visit. Yet maintaining this standard can be challenging because of staff turnover, varying workload, and resource limitations – and any decline in service quality can lead to customer turnover. Dealerships need to invest in staff training, monitor service performance regularly, and seek customer feedback to ensure they exceed expectations.
Adapting to Technological Changes
The digital transformation can pose a challenge for dealerships. Customers expect seamless digital experiences, such as online service booking, mobile apps, and virtual vehicle tours. Dealerships that fail to keep up with these trends may lose customers to more tech-savvy competitors. On the other hand, providing easy-to-use, tech-enabled services and investing in automotive customer retention tools can boost satisfaction and loyalty.
How to Improve Dealership Customer Retention
As a dealer, you may already know why loyalty is so important. But what’s really driving customer retention in the automotive industry? Here are three surefire ways to improve retention.
Offer Exceptional Customer Service
Automotive dealership customer retention statistics prove that customer experience is a top driver of loyalty: 8 out of 10 customers who have a positive sales experience are more likely to return to the dealer for service, and 9 out of 10 are more likely to return to purchase another vehicle. Provide outstanding customer service by ensuring that every customer interaction, whether in person, over the phone, or online, is positive and helpful. Happy customers are not only more likely to return, but also to refer others to your dealership.
Go Digital
The statistics don’t lie here, either: 7 out of 10 consumers say they’re more likely to buy from a dealership if they can start some part of the process online. Typically, this means scheduling an appointment, a service that 73% of dealers now offer online. And don’t forget the service side: Customers also want to be able to see service prices, review repair estimates, and track their service history online. Younger customers also like receiving service videos. If you haven’t begun your digital transformation, now is the time.
Send Maintenance Reminders
You’ll never get a chance to improve your automotive customer retention if those customers don’t come in. Reminding customers of upcoming service appointments, oil changes, or tire rotations helps keep your dealership top-of-mind and makes it easy for them to book an appointment. It’s one of the biggest benefits of connected car programs like GM’s OnStar, but you can also use emails, texts, or app notifications. Don’t forget to follow up: Better Car People’s Connected Response™ responds to DMN alerts in 10 minutes or less.
Implement a Loyalty Program
A well-designed loyalty program is a tried-and-true strategy for customer retention in the automotive industry. They’re simple: They encourage repeat business by rewarding customers for paying you a visit. For example, you can offer points for purchases and services that can be redeemed for discounts, free services, or exclusive offers. Make the program easy to join and use, and promote it actively to your customers. You’ll not only boost loyalty but also make customers feel valued and appreciated.
Choosing the Right Automotive Customer Retention Strategies
Customer retention in the automotive industry isn’t one-size-fits-all. You’ll also need to choose the right strategies for your particular dealership. Here are three key things to consider when deciding which retention strategies to implement.
Understand Your Customer Base
Before you can implement a successful strategy, you need to know what your customers want. Use customer surveys, feedback, and data from your CRM system to help you understand what services or perks your customers value most, then tailor your retention programs accordingly. The more personalized your retention programs are, the more effective they’ll be.
Analyze Competitor Strategies
You probably know what the dealerships in your area are doing for sales and marketing, but what about customer retention? Take a look at their loyalty programs, customer service approaches, and promotional tactics. Identify the strengths and weaknesses of their strategies and consider how you can improve upon them. Learning from your competitors helps you avoid their mistakes and implement successful practices.
Evaluate Cost and ROI
Many dealerships are operating on slim margins, and any automotive customer retention tools or programs will need to provide a good return on investment (ROI). Calculate the expected benefits and weigh them against the costs to choose strategies that provide the best value for your dealership. And consider solutions like outsourced business development centers (BDCs) to take the pressure off your team.
Retain More Customers with Better Car People
Customer retention in the automotive industry doesn’t have to feel like an uphill battle. With BCP Loyalty™, you can create custom automotive customer retention strategies including rewards programs, prepaid maintenance, gift cards, social media engagement, and more. Better Car People has collaborated with more than 2,500 dealerships across the U.S. and Canada, and we can help you too. Contact us today to learn more about how we can help you unlock your dealership's full potential.