By Alan Scher, CEO of AutoGuard
It’s well known that it costs far less to sell and service a repeat customer than it does to attract a new one. Beyond the simple cost, it is a much easier transaction and usually more profitable. For this reason, dealerships across the country are looking for ways to keep their existing customers coming back. A successful transition from sales to service is the most likely way to get sales customers to utilize the dealership’s service department throughout their ownership experience, and getting these customers to use the dealership’s service department is the most likely way to get them to return when they are ready for a new vehicle. In a perfect world, this cycle will repeat time and again. Customers are retained and the dealership profits increase. Is it really that simple?
As dealerships across the country try to design and implement customer retention programs, many are finding that it’s not easy as it sounds. Ideas such as providing cookies or offering movie nights are being experimented with, but few dealerships are truly successful in retaining the majority of their customers.
In 1998, Richard Fisher Sr. decided to start a customer retention program in his dealerships. Nearly 20 years later, his program has been and remains successful in all of his Autobarn dealerships in Evanston, Oakpark and Chicago, Illinois. Every new and pre-owned vehicle sold is polished with a chemical that protects the vehicle’s finish from environmental hazards such as acid rain and bird droppings. After taking delivery, customers must return to the dealership twice per year to have the chemical reapplied. This continues for years of ownership until the customer desires a new vehicle. “Our customers see the value in returning for the reapplications,” Fisher said. “They are comfortable with the process and with our service department. When they need other services, they have a friendly, familiar place to go.”
Fisher’s dealerships all have a polishing machine, and he just installed a drive-through tunnel with dryers and a polisher into his new service center. The polishers are the central piece of Fisher’s retention program that keep his customers coming back year after year. In each store, his strategy to keep all of his customers visiting at least twice yearly to have reapplications has been successful in retaining more of his customers.
Call Out – “We have achieved 85 percent retention at our dealerships”
The key to bringing customers back into the service department is to provide a service they need in an environment they trust. Fisher has been successful in retaining his customers for nearly 20 years by providing them a valuable service that helps maintain the finish on their vehicles. In addition to retention gains, the trade-ins Fisher gets from his returning customers look great.
Retaining customers not only makes sense for this month’s bottom line, but it also sets into motion a path for a dealership to remain successful into the future. Fisher and his family of Autobarn dealerships have solved the modern retention puzzle by providing a valuable service to their customers that keeps them coming back, both to maintain their vehicle’s appearance and for service needs. That keeps Autobarn top of mind when it’s time to begin the cycle again.