According to the Harvard Business school increasing retention by 5% can increase profits by 25% to 90%. So the question is…Why is customer retention not the most important key performance indicator of today’s automotive industry? Specifically speaking of how it impacts the service department and future growth of Fixed Operations. With everyone competing for market share and increasing the units in operation what is fixed operations doing to hold on to those customers and never let go.

• Visualize a funnel and think we have this large intake or place where we continue to fill the pipeline with “market share” and our goal is to reduce and restrict the other end of customers falling out of the funnel. What tools are we using today that will help us achieve the lower end funnel restriction?

History would indicate and we know that the customer cycle declines rapidly from day one ownership and is almost nonexistent after three years; so the time is now to act and take the mindset that customer retention builds future dealership profitability. Think of the proverbial boulder at the bottom of the hill that we need to get behind with the entire team. Most of you just envisioned your immediate team as service advisors and customer care representatives but I am talking bigger than this and talking about this being a store initiative, the left hand knowing what the right hand is doing and working together. The first step it to get behind the rock, get involved and look at what tools are in place and how effective the results have been.

Customer retention is simply reducing the number of customer defections and increasing the number of customers you attract by your marketing efforts.  Are your marketing plans customers centric and personalized? Is there a direct call to action that has interest and will catch the customer’s eye? Are you venturing out of the traditional marketing channels and leveraging all the other resources you have at your disposal to get your message out?

Improving your customer retention is more than a great marketing plan with high brand awareness, so here are some other items to consider when evaluating your customer retention strategy.

Customer retention killers

• Not measuring your default rate or retention rate
• Sales to service transition low
• First service retention number is low
• Convenience
• In-ability to easily set an apt
• Poor internal process for handling customers
• No Training
• No game plan
• No Awareness

Customer retention promoters

• High Customer Satisfaction
• Brand loyalty and strength –
• Perceived Value for Money
• Future “connected” cars –
• Customers want Transparency
• Personnel connection and a tenured staff
• Everyone on the team knows the measured score
• Everyone is following the customer retention “game plan”