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Customer Loyalty Isn't Dead. It Can't Be. It Simply Needs a Revival.

There is doom and gloom in the statistics. Fewer people are staying loyal to a single brand of vehicle. Fewer people are staying loyal to a particular dealership. We've been hearing about it since the rise of the digital age and it can push dealers to focus on generating new sales and service customers at all costs.

Since we're a vendor that specializes in search and social marketing, one might think that this is the type of shift in the industry that we would embrace. The reality is that our roots as car people and our focus on being a partner for our dealers supersedes the benefits we receive from the trend. We want our clients to succeed and the lowest hanging fruit - customer retention - is the one measure that we see slipping through the fingers of so many dealers out there.

One of the things that we've been investigating is the (seemingly) lost art of turning the one-time sales mentality that has been growing in our industry into the good ol' "customer for life" paradigm that has helped some of the most successful dealers we know to stay on top despite the trends. We know it's possible. We've seen some decent results. Now, it's time to learn how to improve on them, consolidate, collaborate, and enhance the strategies.

We Need Your Help, Dealers and Vendors

Over the last couple of months I've had a couple of research side projects that I took on myself. I didn't include my team nor did I ask for assistance from the community. I explored dealership chat and I am finishing up my investigation into gift card incentive programs. This new project is beyond me. I need help. I've gotten my team involved - Subi Ghosh has given me a world of insight from her recent work at her last dealership that has been outstanding. I need more.

What is out there? We need to get a better understanding of:

  • Loyalty-building strategies at the dealership
  • Current and past customer communication techniques
  • Services that harness data to drive loyalty
  • Products that give customers incentives to work with a single dealer
  • Software (stand-alone or embedded) that can assist dealers bring past customers back

This is important and we need your input.

We are going to put effort into bringing all of the best practices, products, and strategies together to present to dealers here. Our CEO pointed out that we are biting off quite a bit more than we have in previous explorations but he's on board with the concept because, again, our focus is on improving the overall experience for our clients even if it's not directly through our own products.

What You Can Do

Dealers, please let us know in the comments what has worked for your dealership. Vendors, please let us know what products or services you have that can improve customer loyalty. This is a very broad topic but one that can be consolidated with the help of the ADM community.

I saw a statistic yesterday that at most dealers, less than 30% of the vehicles in their service drive were purchased at the dealership. This would have been an absurd statistic to comprehend a decade ago but the numbers don't lie. We already know that so many customers are "dealership hopping" when it comes to sales, demonstrating no loyalty to the dealership that sold them their last vehicle.

The internet and the general shift in consumer sentiment has made this a reality in recent years but there's also blame that can be turned to dealers and vendors. Are we so focused on expensive conquest sales that we're missing out on retention? I believe the answer is "yes" and that needs to change. We can find the right solutions. We simply need your help.

Views: 155

Tags: customer loyalty, marketing, retention

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Comment by J.D. Rucker on May 30, 2014 at 6:59am

Thanks Alex, Carl, Tyson, and Jon. After reading on ADM about better data, I think there might be some solutions out there.

Comment by Alexander Lau on May 28, 2014 at 12:11pm

Good piece, true!

Comment by Carl Maeda on May 28, 2014 at 11:07am

Thank you Tyson. 

Outbound emails to customers would also increase contact as well.

Comment by Tyson Madliger on May 28, 2014 at 5:05am

Well said, Carl. "The more personal and the more frequent the contact, the better."

Comment by Carl Maeda on May 28, 2014 at 12:15am

I have been having this exact same question brought up to me with a few dealerships I have visited recently.  The first time I was posed that question, my team and I brainstormed.  To answer this question, we needed to understand the mindset of normal, average people.  Most people place importance on recent experiences like news, social media and dealership contact.  The more personal and the more frequent the contact, the better.  We easily forget past experiences and we expect to be treated well.  Think about all the times you went to the store and bought something.  Did you have a good experience?  If so, did you really remember it?  Now think about your most recent bad experience.  I bet you remember that very well.

My recommendations were:

Invest in social media to increase touch points with customers and build loyalty to the dealerships.

Keep your staff page updated with pictures and descriptions.  Maybe add some fun facts about the staff.

And encourage everyone at the dealership to help with social media.  Submit topics, write articles, make videos, etc.

Comment by Jon Lamb on May 23, 2014 at 8:33am

Most dealers have the core of the data they need for creating stronger loyalty to the store. Using that data properly is the challenge. Everyone seems to be focused on having service customers and sales customers. They're all simply "customers" and the message that you put in front of them needs to assume that. It's not to say that you would send the same email or direct mail piece to all of them, but showing appreciation for their vehicle purchase by keeping them engaged for service isn't just a better way to find increased profits. It's a better way to keep sight of our responsibility to them as a customer.

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