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.
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
Customer retention promoters