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USING CUSTOMER RETENTION TO DRIVE SALES

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I visit about 250 dealerships a year and, from time to time, I hear different complaints about things that are not working the way we would like them to. Some are the usual — not enough sales, can’t find techs, heavy turnover in the sales department, etc. Sorry, no answer for these. However, I think I’ve found a way to address the “customer retention is too costly” problem in a unique way.

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I was in an Apple store the other day buying a watch for my wife. She is Apple to the core, no pun intended. She has an iPad, iPhone, iTunes and a Mac. To say she is a loyal customer would be an understatement. The person who waited on me was fabulous. She had great product knowledge, sold me the watch, three different bands, plus a charger for my car and a new, upgraded iPhone 7. As I was leaving, I wasn’t thinking about the $1,000 I had just spent, but instead, “Wow, what a great experience!” This got me thinking about our business, how we can create the same type of experience for our customers.

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Some stores have accessory departments, and some don’t. If you do, this is a good place to start; if you don’t you may want to think about starting one. Many of us don’t sell enough cars to have a full-time accessory person. Let’s take this person and use them to build the “Apple Experience.”

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One of the problems I hear many dealers talk about is they have a hard time hiring employees right out of college. A dealer in North Carolina told me, “I just can’t hire anyone with a college degree. Who wants to spend $160,000 on a four-year degree and then go home and tell their parents they are selling cars?” Here is a golden opportunity to get some of those people. Take the job as an “accessory person” and turn it into the public relations director for the dealership. Hire only recent college grads and use this as your management training department.

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So, how do you pay them and what do they do? To start with, accessories can be part of it, but a very small part. They should talk to every customer who purchases anything at the dealership. If you have a branding program or a retention program, they should review it with every customer. Explain the benefits and how everything works. If you have a customer Website, show them how to set it up, and do the same with an app. Explain your rewards card, your lifetime program or whatever else you are using to separate yourself from the competition. This person becomes a liaison between the customers and all the other departments. He or she can train everyone on the customer retention program you have developed, plus track the results and review them monthly with the rest of the management team and make sure we are achieving best-in-class retention numbers.

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But, like everything else in our business, we need to figure out a way to pay for it. This, however, becomes the easy part. Not only will new public relations directors pay for themselves, but it could become a new profit center for the dealership. Think about it — only 18 percent of our customers buy a prepaid maintenance program when they purchase a car. The PR director could spend time on the service drive reviewing our maintenance program with every customer who comes in for service.

But why stop there? Develop a menu for the service drive. Everyone knows that the service writers are too busy to sell product on the drive. With a well-developed menu that includes pictures and features benefits, why not offer key fob, wheel and tire, ding and dent and any other protection or products they may not have purchased when they bought their car? The options are endless. I know a dealer in Tampa whose No. 1 salesperson just works the service drive and Internet leads. When they refer the customer back to sales, they can get part of the commission.

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Extended service contracts are another source of income for our PR director. Again, many people in our service department might be interested in an extended service contract if someone just took the time to explain it to them. Have printed material that explains to every customer their options for an extended service contract and have the PR director explain each in detail. Going further, you could develop an online program to sell accessories and F&I products and have this department manage it.

Every dealership needs bright young talent to grow their business. This program will not only put focus on developing this talent, but it will put better focus on creating the “Apple Experience” in our business for every customer. Loyalty and retention — the future is now.

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