GOAL FOR 2017: Improve Customer Retention - AutoSuccessOnline

GOAL FOR 2017: Improve Customer Retention

Every year brings a new list of New Year’s resolutions. Make 2017 the year you significantly improve customer retention. Keeping satisfied customers returning to your dealership will not only make you more money in the long term; it will also have a positive impact on your standing with your OEM. This resolution may appear on your list every year, but this year you have access to more technology than ever to improve customer retention and revive lost service customers.

​Anyone who has been in the business knows that a satisfied service customer will eventually buy a new car. Ask any sales professional — selling to a previous customer is a lot easier than closing a fresh up. Most dealers have ignored this fact and have lost precious service revenue to substandard competitors that now profit off of every car you sell, from routine oil changes to more-costly transmission repairs. 

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The first problem almost every dealership faces is high turnover, especially in the service department. According to the NADA 2016 Workforce Survey, 39 percent of male service advisors and 41 percent of female service advisors left their dealership in 2015. The average tenure at a dealership in 2015 was only 2.4 years. Your customers may have left your dealership because of a negative experience with a service advisor who no longer works for you.

The second problem is that most dealerships do not accurately collect customer information. Email marketing is one of the most cost-effective ways to reach your customers on a massive scale, and your DMS is missing tons of email addresses. Sales associates and service advisors are not taking the time to record and confirm customer contact information for you to use in your marketing efforts. One of my dealers was shocked to see that a huge percentage of his DMS had the same fake email address because of a lazy employee not taking the time to ask for and input customer email addresses.

The first step to reactivating your lost service customers is to have your entire customer database cleaned and email appended. During data cleaning, you should go back as far as you can (seven to 10 years). This can be a challenge because some of your older data has been archived. Your DMS providers typically offer this kind of service and can help you access your older data. This is an inexpensive way to get your customers’ email addresses and open the lines for monthly communication.

Once you have the database compiled, you need plan your marketing strategy. Through my research, I have found sending a service marketing message every month is your
best path to success. Since you have not had consistent communication with a large portion of this audience in the past, there is no real way to know where they are in the service schedule or if they even still own the vehicle. Sending out a generic service offer redeemable for any make or model will not only provide an opportunity to reactivate a lost customer but possibly get one of the other vehicles in their household into your service department.

Remember: The goal is to get the customer into the dealership; that is where the magic happens. For this to work, you need to make sure that your service coupons on your Website have offers that are not expired and are available for all makes and models. When was the last time you updated your service offers? One of our goals is to steal back lost service customers from local shops and express quick lubes, so I recommend reviewing their monthly offers and adding coupons to your site that directly compete with them.

Your competition is typically using Valu-Pack direct mail, and it is working — but it is limited to the amount of coupons they can fit on the postcard or the magazine ad. Using coupon microsites and your own Website, you can host a wider variety of coupons and change offers quickly to stay competitive.

Once you have your customer email database compiled, you need to add in your prospect database from your CRM. Just like you did with your DMS, you need to go back at least five to seven years because those older leads are some of the most productive. The reason you combine these databases is so that you will now have a deduped complete customer and prospect file.

Another benefit of combining the databases is that you will have a blended database of good and bad email addresses and you can offset the issues caused by bad email addresses. Your email deliverability is greatly impacted by the quality of your database. Typically, customer email addresses will have an 8 to 12 percent open rate and unsold prospects have a 2 to 6 percent open rate. The prospect database will also have a higher spam complaint rate, so by combining the databases you lower the overall spam complaint rate and improve your overall email deliverability.

2017 is your chance to make your perennial resolution a reality. Your next best customer is sitting in your DMS and CRM; getting them back into the dealership is the hard part, but not impossible. Keep them coming back with your monthly service marketing strategy.


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