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From: Jared Hamilton
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Mike Gorun

Mike Gorun Managing Partner/CEO

Exclusive Blog Posts

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Why Employee Retention Effects Customer Retention

In the automotive world, the bottom line is that many dealerships experience very high turnover rates with employees, especially in sales. Our world is one of high stress, long hours and feast or famine. (This might not be as true in the service departments.) However, the face of your dealership to a customer who bought their car from you is their salesperson. Yes, it is. The person that sold them their car is their go-to person for everything. If there is a problem, they usually don’t call service, they call the salesperson.

So, assuming that’s the case, if your dealership experiences high turnover in sales, how can you expect a customer to be loyal to you when they feel as if they’ve been abandoned? I like to refer to them as “orphan owners”. People have an emotional need to connect. They can’t connect with your billboard or giant inflatable gorilla. They certainly can’t connect with the mysterious shadow-figures sitting behind the desks in the sales tower that they never see. Their connection is with their car and the common bond between their car and your dealership is their salesperson.

I’ve talked to many people who have purchased vehicles from dealerships over the years and, in many cases, the customers go into the relationship already thinking that their salesperson won’t be around for long. No matter how much reassurance a salesperson gives them, they typically have little confidence that, when they need him or her, they’ll be there for them.

The fact remains that your employee retention has a direct effect on your dealership’s customer retention. If your salesperson did their job well and provided a great buying experience for that customer, it creates a feeling of obligation and reciprocity between the customer and that salesperson. Mind you that I never once said this customer bond was between them and the dealership. Emotional connections are made between people. In many cases, the only human a customer could connect with is their salesperson.

So, what do we do about this? Well, the obvious answer is to build a better workplace environment. Create an environment that people want to work at and enjoy coming to. Treat your employees well and understand that they have lives outside of work and respect that. I understand that, no matter how “above and beyond” you go, turnover is inevitable so…

Make sure that sales customers, during and after the sales process, have multiple interactions with people other than just the one salesperson.  Have the Sales Managers, General Manager, Service Director and anybody else that can take a moment, actually meet and talk to these customers in person– not just come over, say hello, thank them for their business and then walk away – but interact in some way. This simple technique increases the number of people in your store that a customer has the opportunity to bond with. It also decreases the chance that a customer would ever feel “orphaned.”

If the customer didn’t buy their vehicle from your store but only service it there, the same principle should be followed. Make sure that the customer is introduced to as many of the advisors as possible including the Service Manager. Once the emotional connection is created and the customer believes that you care, the customer is not bringing their business to your business, they’re bringing it to the people at your business. We all know that people do business with people, especially ones that they like. Make sure that your customers like your people. The more of them they like, the easier customer retention becomes. 

By creating more emotional connections between people in your store and your customer during the first transaction, you will decrease the likelihood that the loss of a salesperson could influence the loyalty a customer feels towards your store. These early stages of relationship building with customers are vital, and it is worthwhile to do everything in your power to build that relationship as quickly as possible.

When your customers start referring their friends to you by beginning with the phrase, “ I have a friend that works at Bob’s Dodge…” not only have you gained a friend, you’ve also gained a loyal customer and brand advocate.

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