The Basics of a Retention Program

The Basics of a Retention Program

Through your own custom loyalty program, you can brand your dealership and give each customer an incentive to return.

The key component of a successful loyalty program is awarding your customer with points per dollar spent. A simple, effective, low-cost, commonly accepted practice in retail is to reward customers for their business. We see this every day in air travel, rental cars, hotels, grocery stores, etc.

You can design your own custom loyalty program for your unique dealership. You can plan your program to make it so simple that it is practically “hands-free” in its application. Through this process, you brand your dealership and give each customer an incentive to return to your business to receive their rewards.

Keeping your customer in your service/parts department after the sale provides you with greater opportunities for re-purchase and a supply of excellent pre-owned inventory. The most successful dealers reward their customers and provide a level of service that is second to none. This combination simply cannot be beat.

Encouraging your customer to give your service/parts department an opportunity to provide them with great service is always a challenge. Providing them with an oil/filter change and tire rotations at no cost during the first year has proven to be a primary motivator. Coupling this with a low-cost, pre-paid maintenance program, which is introduced at vehicle purchase and followed up by service, is a fail-safe way to increase profitability and ensure you receive their business.

Leading-edge dealers looking for long-term retention will provide some type of engine/powertrain guarantee/warranty for as long as the customer owns the vehicle. This gives the customer peace of mind that he/she does not have to worry about a catastrophic failure.

The only requirement is that the customer have oil changes and all the manufacturer-recommended services performed according to time/mileage. This will result in an increase in vehicle service contract sales. The customers in your primary market area will readily return to your business since they know that you have a vested interest in making sure they are satisfied, and you will make it easy to submit claims.

A combination of all the above has produced retention numbers more than 90% and a long-term relationship with the customer. Dealers are seeing their opportunity for re-purchase go from an average of 36% to over 86%! Additionally, our analysis of service/parts profitability shows that a customer who is a member of a loyalty program will spend more per repair order than a customer who is not a member. The range we see is a minimum of $12 up to $236 per repair order! Just a minimal increase in number of repair orders and more dollars per will substantially improve your bottom line. Of course, you must surprise your customer by exceeding their expectations or your efforts are in vain. Remember that there are many choices for purchasing a vehicle or obtaining service. You must be the one that stands out from the crowd and earns their business.

You May Also Like

COMPLIANCE: A Necessary Evil or a Million-Dollar Mistake?

Explore the complexities of digital privacy in business, including the impact of consent banners on marketing analytics and the balance between legal compliance and operational effectiveness. Learn how to navigate the risks and rewards of digital data management.

As a business owner, you spend a lot of time balancing risk and reward. For instance, your service department changes tires every day. What if a wheel comes off after the customer leaves? It does happen sometimes and could mean a lawsuit, yet you still change tires. Why? You know the risk, have taken steps to insulate against it, and accept that the upside outweighs the unlikely downside. However, digital risks and rewards are not always as well understood.

Stuck In Traffic: Why Quick Fixes Are Stalling Your Store’s Growth in a Competitive Market

Dealers should look closely at their long-term branding, tools and market share. They should be balancing short-term lead generation with long-term investment while, critically, avoiding shiny things.

Stuck In Traffic: Why Quick Fixes Are Stalling Your Store’s Growth in a Competitive Market
Turning Your Website from a Maze into a Clear Path

Discover how simplifying dealership websites can significantly boost user engagement and sales.

Turning Your Website from a Maze into a Clear Path
Are You The Captain Now?…or Is Bad Marketing Steering Your Ship?

It’s time to get out of the mindset of cut, cut, cut, and into the mindset of spending wisely for your long-term success.

Is Bad Marketing Steering Your Ship?
Google Analytics for Dummies

GA4 can help you understand which marketing sources drove traffic to your website, allowing you to compare one to another.

Google Analytics for Dummies A Simple GA4 Guide for Non-Analytics People

Other Posts

Sorting the Latest GA4 Confusion

If you’re stumped by the new Google analytics, take some solace in that you are not alone. Here’s some help.

Sorting the Latest GA4 Confusion-Remora, Google Analytics,
BendPak Introduces New Octa-Flex Lift: Inside Look

Susan Givens has a discussion with Sean Price from BendPak about the groundbreaking Octa-Flex Series concept two-post lift.

You’re Losing $700 on Every Trade – Why the Data Screams, ‘Mandate 100% Scans!’

Having the right appraisal data integrated with accurate reconditioning costs in hand before the deal is transacted leads to acquiring inventory that can be turned at a profit.

Rapid Recon, appraisal, scan tools, time to line, vehicle reconditioning,
The Art and Science of Vendor Partnerships

By collaborating with suppliers and vendors, within the framework of a true partner relationship, you can multiply success and profits exponentially.

The Art and Science of Vendor Partnerships - Women In Automotive