We all know that a sale is just the beginning of a customer relationship. But how do you manage that relationship so customers not only come back for service but also repeat sales?
Right now, dealers are focused on the here and now. I get it. Everyone is scrambling for used vehicles to meet the surging consumer demand as OEMs rebound from the slowdown in manufacturing. Used car inventory is low and the value of a trade has never been higher. Everyone is worried about coming out on top of the current economic crisis.
Retention has understandably been on the back burner for many dealers. But as we look forward, whatever the timeframe, we will return to a sense of normalcy and customer retention is a key part of ensuring your dealership’s success for years to come.
The good news is that dealerships are doing a better job of converting sales customers into service customers. According to the J.D. Power 2020 Customer Service Index Study, dealers capture 88% of customers’ annual service visits in the first three years of ownership vs. non-dealers. This is up from 79% in 2015. However, defection to the aftermarket occurs rapidly once warranties expire.
There are some simple, key practices you can put in place to inspire customer loyalty and keep retention rates high. The following list will help you get the customer back into the dealership for that first service, second service and all the way to their next new vehicle.
- When you deliver the vehicle, use your service lane software to set the first service appointment for 3 months in the future. Emphasize to the customer how important this service is in making sure the vehicle is performing at its best. Schedule a reminder call for your service advisor or BDC in your CRM. You wouldn’t believe how many dealerships forget to remind customers of these crucial appointments. Schedule that reminder and get it done. Customers lives get busy. If you want that first appointment, you have to earn it.
- Process Improvement: The service advisor and the sales representative who sold the car should greet the customer when they come into your shop. This personal attention shows the customer that their business is valued and appreciated. If a customer wants touchless drop-off, have the sales rep give a welcome call instead.
- Prove that you want the customer’s business by offering options for their convenience. This may include vehicle pick-up and drop-off, and/or offering a loaner vehicle. Make life as easy as possible for your customer. They will remember and appreciate it.
- Use technology to the customer’s advantage. Implement online scheduling, enable a mobile platform so service advisors can text customers and get fast RO approvals and allow customers to receive invoices and pay via text. Again, it’s about making the process as easy as possible so your customers want to come back.
- Change your language when setting the next service appointment. Don’t ask for the next appointment. Let the customer know that based on mileage, a certain date in the future is the best option to keep their vehicle running at peak performance. Then ask what time on that day works for them. The customer will be more likely to schedule because you’re counseling them on what is best, not asking for the appointment. Change your words, change your results.
- Answer your phones. Customers get frustrated when they want to schedule an appointment or have a question, but they can’t get anyone on the line. Dedicate one person during your busiest times to pick up the phone. This person’s sole responsibility is to make sure every call gets a live voice on the other end. Can’t make this happen with current staffing? Consider a third-party BDC service. You’ll close more service business and keep customers happy when every call is picked up, handled, and routed properly.
- Stay top of mind. Targeted, cross-channel marketing is critical to stay on a customer’s radar. Use your CRM to create targeted customer lists based on mileage, vehicle make, etc. Then create messages to be sent automatically on a pre-set schedule. Don’t inundate customers with messages and don’t make everything about a sale. Seasonal travel tips, holiday greetings and birthday cards go a long way toward cultivating genuine relationships.
- Create a clear process for equity mining. The ultimate goal of a vehicle sale is to turn that customer into a service customer and then into a repeat buyer. The service drive is a great place to equity mine for the used vehicles you need and move customers into their next new vehicle. But you have to have a process that makes sense. Don’t approach a customer who bought within the last 12 months and encourage a trade-in! Do dedicate an equity mining expert to review all service appointments for the coming day and identify those customers with equity in their vehicles that you can move quickly for higher profit. Have the expert create a written trade-in quote for every eligible vehicle and email, text or hand it to the customer in the service drive. Then have that expert or your BDC follow-up. As I’ve said in previous blogs, a clear equity mining process combined with a strong BDC delivers an ROI of 10 to 1. For every $1,000 you spend, you’ll get $10,000 back.
Retention may have slid to your back burner right now, but it still deserves your attention. Things will get back to a sense of normalcy, and retaining customers is still your best bet for long-term success in your market.