Who’s Responsible for Customer Retention at Your Dealership? - AutoSuccessOnline
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Who’s Responsible for Customer Retention at Your Dealership?

Leaving it up to the factory to develop one for you or hoping that management by committee will work is the least effective way to grow your business.

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I know the last things dealers want to do is add layers of people to your business who will not generate profit, even if the rewards can be seen “down the road.” We know that things work best when we put someone in charge and hold them responsible for the results. Very rarely do we find a business or dealership that does not have one person in charge. I don’t see management by committee working long term. The leadership role is a must, and picking the right person for the job usually makes all the difference in a successful business.

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Most dealerships have a general manager who will divide the store into different profit centers and build a team to manage each one. Needing to sell new vehicles requires hiring a new car manager. Used cars are important, so we find an experienced used car manager. If you want to maximize the potential of the F&I, service, parts, bodyshop and truck departments, you need to put a good person in charge of each. Good management is always a key to profitability. When we have staff focus on a specific task and we measure the results, good things always happen.

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But here is the hard part: What do we do with the areas that are important to our business, but they don’t show immediate profits? For example, how do we manage customer retention? Talk to any of the major manufactures and they are all driving home the need to increase your retention rates. Some are even paying incentives for better results. Statistics show that dealers with high retention rates will exponentially increase their business year after year. Customer retention is our best service referral, our least expensive way to advertise and has the most long-lasting effects on our service department’s profitability. The question is, does it warrant its own management person to oversee it?

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In most stores, customer retention is discussed to death, but no one really seems to take responsibility for the overall results. I talk to dealers who say they have great retention but, when you look into how they are measuring it, you have to question their data. Most rely on what the factory tells them, and this usually involves only new vehicle sales. They have no in-house tool to really see or track all their customers. If you do not have at least a 70 percent retention rate at your dealership for both new and used cars combined, you’re losing profits.

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A customer retention specialist at the dealership would manage all of the areas that need to be tracked to improve how your dealership retains your customers. They would manage, monitor and maximize a real retention program. They would train employees, track surveys, hold other departments responsible for implementing retention processes and make sure that customer loyalty comes first in all areas and all departments. They would be responsible for results. This specialist would manage this profit center just like all the others in the store.

Retention is a game changer. The dealers who develop a strong program today will reap the benefits far into the future. Leaving it up to the factory to develop one for you or hoping that management by committee will work is the least effective way to grow your business. If you want better results, put someone in charge.

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