According to IHS Markit analysis, approximately 17.5 million new vehicles were registered in 2019. Of those customers, 54.6 percent returned to market to purchase or lease another new vehicle from the same make they already owned. That marks the seventh consecutive year of an industry loyalty rate over 50 percent. But don’t take this trend for granted—you still need to continually woo your current customer owner base.
In this 60-Second Update, Intermark Automotive talks about how you can leverage your CRM to increase sales now and down the road by retaining customers for life:
If you don’t already have a robust CRM program, these customer retention statistics will make you think twice:
- 91% of consumers are more likely to shop from brands who recognize, remember, and provide them with relevant offers and recommendations.
- 65% of a company’s business comes from previous customers.
- 86% of customers with great purchase experiences will likely buy from the same company again.
- A 5% boost in customer retention can increase profits by 25% to 95%.
- 82% of consumers in the U.S. stop doing business with a brand if not satisfied with customer service.
- 34% of consumers will never buy from a brand after just one bad experience.
- 48% of all consumers have left a business’s website and purchased elsewhere because the page wasn’t easy to navigate.
- 53% of people will abandon a mobile website if it takes longer than 3 seconds to load.
One of the biggest mistakes a dealer can make is to not have a singular person in charge of customer relations. Think about it—you have a specific manager for every other department in your dealership. Why not for your CRM program? I know, I know…it’s difficult to justify creating a specific position that does not generate immediate profits. But consider this from AutoSuccess Magazine journalist Jack Garrity: 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.
Don’t leave it up to the manufacturer or “management by committee” to develop and maintain customer retention. A customer retention specialist would track all areas in your dealership to improve how your dealership retains customers.
Strategies for Dealerships to Increase Customer Retention:
- Connect your Sales and Service departments. 53 percent of customers that were introduced to the service department at the time of their new car purchase said it came into play when deciding where to repair the vehicle later. Furthermore, buyers who utilize a dealership’s service and parts departments are more than twice as likely to purchase their next vehicle from the same dealership.
- Offer a Loyalty Program. Selling a car with a service package leads to 50% higher retained margin over the customer lifetime. Loyalty program members visit a dealership’s service department nearly twice as often and spend twice as much as customers who do not participate in a loyalty program.
- Build strong relationships with existing customers. 63 percent of shoppers do not feel like retailers know them. Get to know your customers and establish regular exchanges that are relevant to them through personalized communications. Set reminders to send non-business messages for birthdays, anniversaries, and holidays. Being attuned to your customers’ needs makes them feel well taken care of and shows that they are important to you.
- Improve client response times. 72 percent of consumers will go to another dealer if email response is too slow. 43 percent of people expect a response within one to four hours, even on weekends.
- Book more service appointments. 67 percent of customers contacted by text and 55 percent of those contacted by phone say they will definitely return for paid service.
- Recapture lease customers. Your biggest benefit from lease purchases is customer retention. Since lease-end dates are known in advance, your dealership can be proactive in helping customers transition to a new vehicle. Outbound calling campaigns that start around a year in advance with “countdown” reminders every few months are an effective way to keep a customer’s impending lease-end at the forefront of his or her mind.
- Manage your dealership’s reputation. When it comes to customer service, no matter how stellar your dealership is, you will get a negative review from time to time. The best thing you can do is to acknowledge the customer’s remarks, take responsibility, and have them contact a specific person at the management level to make things right. Don’t try and put the blame back on them and don’t get into a ‘he said/she said’ battle in the comments section. Once the situation is remedied, ask if they will take down or revise their negative review and offer an incentive for doing so.
Statistics show that dealers with high retention rates greatly increase their business year after year. Customer retention is the best service referral, the least expensive aspect of auto advertising, and has the longest-lasting effects on a service department’s profitability. So, if you want better results, put the right person in charge of your customer relations.
For more information on how to expand your automotive marketing strategy by leveraging your CRM to increase customer loyalty, contact Intermark Automotive today!
by Shea Posey, Senior Account Executive/Compliance & Co-op Specialist