Customer Retention: A Big Problem with an Easy Fix

Over the years I have heard a lot of dealers and managers talk about how important customer retention is (or would be) to their store. They talk about how much more service business they would have or how many more cars they would sell and how much more profit they would make – if they could retain more of their new and used car buyers. But here’s the problem – until recently, it was always just talk.

Today though, it’s different. Smart dealers have finally realized that talking about customer retention is just not enough – and that if they want to survive or succeed in today’s market – they have to change the way they do business. Dealers really have no choice today with the constant decline in warranty income, maintenance intervals that are stretched out further and further and the increase in independent repair shops that are finally seen as the real competition.

I believe the biggest cause for customers not returning for service lies in the fact that a dealer’s own vehicle salespeople don’t know how good or how competitive the store they work at really is. Everyday they tell new and used car buyers to take their cars somewhere else for service because they are convinced that you charge too much, will take too long and that “it’s just an oil change – and anyone can do that.”

Wow – that hurt. Why not start your “Improve Customer Retention Campaign” by educating your vehicle salespeople about how competitive and convenient your service department really is. Show them price comparisons for oil changes and other maintenance work. Get your service staff to share some horror stories about what happens when customers take their car to the independent shops for oil changes or repairs – and how much it cost for your dealership to fix their problems. Let them know that it really is much more than "just an oil change."

Build a good relationship between salespeople and service personnel by giving any salesperson a 50 percent off oil change deal for their personal cars. A recent study we did found that 72 percent of vehicle salespeople have their cars serviced at independent shops. The 50 percent off deal gets them back into your shop so they feel comfortable recommending new and used car buyers to someone they know. I would also have service managers attend a sales meeting every month or so just to remind everyone that he and his department exist. Have some flyers printed that salespeople can hand out to new customers showing how price competitive and convenient your store is. This isn’t rocket science guys – but it takes effort. It won’t cost anything to do - but I have to tell you that I honestly believe you hold the key to actually fixing your customer retention problem right in your showroom. The question is will you commit to fix it or keep doing things the way they have always been done?