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Five Keys to Increasing Customer Retention at Your Dealership

Dealerships today spend most of their marketing budgets on acquiring new customers. Those ads in the newspapers aren’t really meant for current of past customers, they are meant to attract new customers. The cost of customer acquisition ranges from 6 to 10 times more than the cost of customer retention, so what can your dealership do to increase customer retention?


Here are five great places to start.


  1. Processes –Are your processes customer-friendly or are they focused on efficiency? What parts of your processes are your customers complaining about? Examine your processes and put yourself in their shoes. If this were a process you had to go through, would you like it? No matter what the process is for, make sure that your customers know what it is in advance and listen to them when they tell you which parts they don’t like, then make changes accordingly.
  2. ReciprocityThe law of reciprocity states that people “respond to a positive action with another positive action”.  In business, reciprocity as related to customer retention usually refers to going above and beyond for your customer. In return, they will reward you with repeat business. Positive actions don’t have to cost money. They can be anything from a kind word to opening the car door for them when they arrive. Have crayons & coloring books handy for the parents bringing their children in with them. Small things sometimes make big impressions. Use this to your advantage in all departments of your store.
  3. Exceptional customer service – Ensure that your customer’s experience is world-class customer service from the moment they become your customer throughout the entire relationship. This will keep your customers loyal. Emphasize customer service in all your processes, in every department and to every employee. Make no mistake; the smallest error can cost you a customer. Train your staff the importance of providing exceptional customer service and hold them accountable. There is no easier way to increasing customer retention than providing an experience that customers cannot get anywhere else.
  4. Quality Is Better Than Speed – Many businesses assume that the faster the service, the better the customer perceives it. According to an article by Gallup, “If the goal is to create strong bonds that ensure customer retention, companies must focus on activities that create and sustain the customer relationships, not just on those that enhance company efficiency.” Slow down and take time to really listen to your customers. They will be the ones that inevitably decide whether your business thrives or not. Make sure that your work is top-quality.
  5. Know Your Customers – As simple as this sounds, it’s the one area where many businesses fail. There is nothing more impressive than going into a business and being greeted by your name. People like to be remembered. It makes them feel special. There is no easier way to prove to a customer that you value their business than by knowing who they are. Encourage your employees to take the time to get to know your customers. Make them more than just a name in your computer. They will notice and will be impressed. In today’s busy world, everyone is in a hurry. Be the business that’s more interested in getting to know them than the one looking to get rid of them the fastest.


There are other ways to increase customer retention including customer loyalty programs, customer appreciation events and special offers. However, by focusing on these five areas, you will improve your customer retention rate simply by being a place customers want to visit, rather than a place they need to go.

Views: 55

Tags: automotive, customer, dealership, loyalty, programs, quality, retention, service


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