In the automotive industry, hundreds of customers pass through dealerships on a daily basis. Each of these customers will interact with dealership staff multiple times during their visit - whether they’re there to buy a car, or for a simple oil change. It’s very easy to function as an organization with a focus on efficiency - how quickly can you complete a repair, how quickly can you get someone in and out of the finance office, etc.  We are, after all, in a society that’s always on the move. The trend is to speed things up for the customer. By doing so, however, we neglect the biggest part of customer’s experience and the most important piece of the big puzzle that is customer loyalty: personal interaction.

All too often we go through our days thinking that if we don't get complaints, our customers are happy. But, that’s not usually the case. Running the dealership like an assembly line serves only to depersonalize the experience. While you may not hear a complaint, you shouldn’t assume that every one of your customers had a good experience. You’d think that if there was something substantially poor about their experience, the customer would inform you. And some customers would. But what about little things that affect the experience? In many cases the customer either doesn’t feel it’s worth mentioning, or doesn’t think anything will be done about it. Those customers complete the transaction with you and go on their way leaving dealership employees with the impression that their experience was satisfactory, assuming they will return. And, in many cases they do…

Until another company offers them a superior customer experience.

All of a sudden, this repeat customer simply stops coming in. Oftentimes, we’re left clueless as to why. Did we do something wrong? Was there a bad experience that we didn’t know about? Is it a price thing? Did they move? We mine the DMS and email coupons and offers to dormant service customers that used to come regularly, to invite them back. Sometimes they respond or take advantage of our offers, and sometimes we’re left wondering.

So how then are we supposed to know whether a customer really had a good experience during their visit? It’s very simple. We ask.

Human interaction is the single most effective way of gauging the thoughts of another. Just as you can tell when someone isn’t telling you the truth, or is unhappy despite what they may say, the same occurs when your sales manager or service advisor makes sure they speak to the customer before they leave. Take the time to thank the customer for their visit and ask them how their experience went after each and every transaction. This can help to identify problems. Perhaps it was something as small as the fact that the restrooms were dirty, or there were no paper towels. Perhaps the car wasn’t washed to their satisfaction or there are greasy fingerprints in their car. The customer may just leave feeling irritated. Having knowledge of that fact right then would allow you to fix that issue so that another customer does not have the same problem.

Make it a point to train your employees in the importance of conducting exit interviews with every customer. If they’re in sales, a manager TO is the perfect opportunity to thank the customer and ask how their experience was. You’d be surprised how that previously quiet customer all of a sudden opens up when a new face with authority asks them. In service, have your service advisors or, if possible, your service manager do the same thing prior to a customer leaving. Identifying customer complaints or service hiccups can go a long way towards ensuring that the experience for every customer is as optimal (and consistent) as possible. It doesn’t take much to lose a customer nowadays. Taking a few extra minutes with each customer will show them that you care and that will go a long ways towards earning and keeping their business.

There is a group of people that seems to sit in limbo when it comes to dealership marketing messages, especially when it comes to service. This group of people tend to have cars in the 2-year old range. Yes, they’re probably getting the dealer’s random e-mail messages with service coupons. But, this is also the time when these vehicle owners may have to start shelling out more significant money for repair or maintenance work.
 

Many consumers don’t realize that they can still purchase extended warranties and/or prepaid maintenance plans once they have left the finance office. How often do your service advisors inform customers that they are still eligible? Are you sending relevant messages to this group of people? The manufacturer and finance companies are. An acquaintance of mine has a 2-year old car and has received numerous solicitations from Ally Financial for an extended warranty. They even offered 0% interest and to roll it into his monthly payment. Yet he received zero offers along this line from his dealership.
 

Extended warranties and prepaid maintenance programs bring in great revenue to dealerships. I bet that your finance departments are doing their best to sell these at the point of purchase. Why, then, aren’t service advisors making an effort to offer these programs to customers? Chances are their pay plans aren’t structured in a way that gives them any incentive to do so.
 

Consider educating your service advisors. Train them and implement a process in which they inform ideal service candidates about these programs and incentivize them to sell them. You may find that your post-sale warranty and prepaid maintenance penetration increases. Not only does this increase revenue but, at least in the case of prepaid maintenance, it ensures that the customer is tied to your dealership for as long as they own the vehicle. There’s no better person to sell a new car to then the one that bought their current one from you and that has been getting it serviced with you for years.

There is a group of people that seems to sit in limbo when it comes to dealership marketing messages, especially when it comes to service. This group of people tend to have cars in the 2-year old range. Yes, they’re probably getting the dealer’s random e-mail messages with service coupons. But, this is also the time when these vehicle owners may have to start shelling out more significant money for repair or maintenance work.
 

Many consumers don’t realize that they can still purchase extended warranties and/or prepaid maintenance plans once they have left the finance office. How often do your service advisors inform customers that they are still eligible? Are you sending relevant messages to this group of people? The manufacturer and finance companies are. An acquaintance of mine has a 2-year old car and has received numerous solicitations from Ally Financial for an extended warranty. They even offered 0% interest and to roll it into his monthly payment. Yet he received zero offers along this line from his dealership.
 

Extended warranties and prepaid maintenance programs bring in great revenue to dealerships. I bet that your finance departments are doing their best to sell these at the point of purchase. Why, then, aren’t service advisors making an effort to offer these programs to customers? Chances are their pay plans aren’t structured in a way that gives them any incentive to do so.
 

Consider educating your service advisors. Train them and implement a process in which they inform ideal service candidates about these programs and incentivize them to sell them. You may find that your post-sale warranty and prepaid maintenance penetration increases. Not only does this increase revenue but, at least in the case of prepaid maintenance, it ensures that the customer is tied to your dealership for as long as they own the vehicle. There’s no better person to sell a new car to then the one that bought their current one from you and that has been getting it serviced with you for years.

Loyalty programs surround us. We live in a world filled with keychains on which multiple little plastic mini loyalty cards dangle. There aren’t many places where we spend our money that don’t offer a rewards program or, at the very least, track our purchases via a quasi-rewards program that only allows us to purchase items at the “loyalty” price, versus the normal price (think grocery stores). While adding a loyalty program into your offerings is certainly something you should consider, keep in mind that not all customers are created equal. Blanket offers to everyone enrolled in your loyalty program could actually cost your dealership some business. Let me explain.

Almost every business has their own version of a “best customer.” These customers typically continuously visit the business and generate most of the revenue. They may not be the most frequent visitors, but bring the most profit with their visits. In all marketing, segmentation is key. It is certainly not the best move to spam your entire DMS with the same offer. That would be a waste of time.

Is that customer that only visits your dealership to take advantage of an oil change coupon worth the same reward as the customer who regularly services and accepts service upsells?

Identifying who your best customers are in terms of profitability can reap benefits in two ways.

1)    It allows any rewards and/or specials to be precisely targeted to those customers who deserve it most and who bring the most promise in terms of upset opportunities. It’s fairly common to throw out a $20 oil change coupon in the hopes that some additional service business is earned when that coupon is redeemed. That being the case, what percentage of those redemptions are accompanied by service upsells? By blanketing your customers with discounts and coupons, you simply attract those customers who only patronize you if they have a coupon and, in most cases, decline any service recommendations you may present to them.

2)    Identifying that group of your “best” customers will allow you to find patterns, characteristics and behaviors that exist within the group. Once you know what qualities your “best” customers have, you can start identifying customers who have similar qualities or behaviors that aren’t quite at that “best” status yet. Then, you can tailor your marketing or rewards to that second tier of customers in an attempt to elevate them into that “best” customer category.

Rewards programs are dynamic. Members should be segmented and marketed to in a personal way designed to maximize the outcome. Any marketing should either encourage existing behaviors or nurture customers into adopting the attributes of your “best” customers. Don’t use a set-it-and-forget-it blanket reward for members. If you do, you’ll find that your reward program could actually cost you money as all those loss-leader oil changes come into service with no upsells.

Identify your most profitable group of customers. Then leverage your loyalty program to instill in that second tier of customers the qualities from your most profitable customers. In this way, the base of customers that are generating the most income for you will grow and help to create a more solid foundation for your dealership’s future.

Loyalty programs surround us. We live in a world filled with keychains on which multiple little plastic mini loyalty cards dangle. There aren’t many places where we spend our money that don’t offer a rewards program or, at the very least, track our purchases via a quasi-rewards program that only allows us to purchase items at the “loyalty” price, versus the normal price (think grocery stores). While adding a loyalty program into your offerings is certainly something you should consider, keep in mind that not all customers are created equal. Blanket offers to everyone enrolled in your loyalty program could actually cost your dealership some business. Let me explain.

Almost every business has their own version of a “best customer.” These customers typically continuously visit the business and generate most of the revenue. They may not be the most frequent visitors, but bring the most profit with their visits. In all marketing, segmentation is key. It is certainly not the best move to spam your entire DMS with the same offer. That would be a waste of time.

Is that customer that only visits your dealership to take advantage of an oil change coupon worth the same reward as the customer who regularly services and accepts service upsells?

Identifying who your best customers are in terms of profitability can reap benefits in two ways.

1)    It allows any rewards and/or specials to be precisely targeted to those customers who deserve it most and who bring the most promise in terms of upset opportunities. It’s fairly common to throw out a $20 oil change coupon in the hopes that some additional service business is earned when that coupon is redeemed. That being the case, what percentage of those redemptions are accompanied by service upsells? By blanketing your customers with discounts and coupons, you simply attract those customers who only patronize you if they have a coupon and, in most cases, decline any service recommendations you may present to them.

2)    Identifying that group of your “best” customers will allow you to find patterns, characteristics and behaviors that exist within the group. Once you know what qualities your “best” customers have, you can start identifying customers who have similar qualities or behaviors that aren’t quite at that “best” status yet. Then, you can tailor your marketing or rewards to that second tier of customers in an attempt to elevate them into that “best” customer category.

Rewards programs are dynamic. Members should be segmented and marketed to in a personal way designed to maximize the outcome. Any marketing should either encourage existing behaviors or nurture customers into adopting the attributes of your “best” customers. Don’t use a set-it-and-forget-it blanket reward for members. If you do, you’ll find that your reward program could actually cost you money as all those loss-leader oil changes come into service with no upsells.

Identify your most profitable group of customers. Then leverage your loyalty program to instill in that second tier of customers the qualities from your most profitable customers. In this way, the base of customers that are generating the most income for you will grow and help to create a more solid foundation for your dealership’s future.

If you were to ask today’s consumers if they’d like to hang out at a car dealership, chances are that the majority would respond “no.” When consumers do visit a dealership to purchase a vehicle or get their vehicle serviced, many times the process can be longer than desired and is not always a great experience for the consumer. Dealerships have been attempting to streamline the sales and service process through the use of technology to make the entire process faster and more efficient so as to be more consumer friendly.

Some dealerships are going a little bit further to make the customer experience more enjoyable with the addition of delis, Starbucks, movie theaters and hair salons, as permanent fixtures. And thinking even further outside the box, a recent Automotive News article highlighted a Fort Worth, Texas dealership that chose to open a 250 square foot wine store inside their dealership. It has been so popular with their customers that it has actually added $700,000 to the dealership’s annual bottom line.

Due to its popularity, the dealership then opened a full size retail wine bar in downtown Fort Worth… with a catch. Not only does the dealership display new Cadillacs inside (and outside) the bar, the bar also serves as a satellite service drive that allows wine bar customers to have their vehicles serviced while socializing and enjoying some wine. The wine bar is 20 miles from the dealership so there are employees on-site who transport customers’ vehicles to the dealership for service, then back to the wine bar upon service completion. This provides a very unique customer experience. It also makes service much more convenient for the many downtown Fort Worth employees who would otherwise have to drive 45-minutes to an hour to have their vehicle serviced at the dealership.  In addition, the wine bar produces at least one vehicle sale per month, to say nothing about the increased service business.

Regardless of whether you decide that a wine bar within your dealership is a good idea, creating an excellent experience for your customers certainly is. If your customer experience is less than great, it won’t matter if you have an amusement park in the back lot, your customer could still leave.  Customer loyalty is a fickle creature that can be lost much faster than it can be gained. Give your customers a reason to choose your dealership. Then ensure that the experience they have is one that they would want to repeat. Only then can you really build that relationship and transform your customers into loyal customers that will return because they want to – not because they have to.

If you were to ask today’s consumers if they’d like to hang out at a car dealership, chances are that the majority would respond “no.” When consumers do visit a dealership to purchase a vehicle or get their vehicle serviced, many times the process can be longer than desired and is not always a great experience for the consumer. Dealerships have been attempting to streamline the sales and service process through the use of technology to make the entire process faster and more efficient so as to be more consumer friendly.

Some dealerships are going a little bit further to make the customer experience more enjoyable with the addition of delis, Starbucks, movie theaters and hair salons, as permanent fixtures. And thinking even further outside the box, a recent Automotive News article highlighted a Fort Worth, Texas dealership that chose to open a 250 square foot wine store inside their dealership. It has been so popular with their customers that it has actually added $700,000 to the dealership’s annual bottom line.

Due to its popularity, the dealership then opened a full size retail wine bar in downtown Fort Worth… with a catch. Not only does the dealership display new Cadillacs inside (and outside) the bar, the bar also serves as a satellite service drive that allows wine bar customers to have their vehicles serviced while socializing and enjoying some wine. The wine bar is 20 miles from the dealership so there are employees on-site who transport customers’ vehicles to the dealership for service, then back to the wine bar upon service completion. This provides a very unique customer experience. It also makes service much more convenient for the many downtown Fort Worth employees who would otherwise have to drive 45-minutes to an hour to have their vehicle serviced at the dealership.  In addition, the wine bar produces at least one vehicle sale per month, to say nothing about the increased service business.

Regardless of whether you decide that a wine bar within your dealership is a good idea, creating an excellent experience for your customers certainly is. If your customer experience is less than great, it won’t matter if you have an amusement park in the back lot, your customer could still leave.  Customer loyalty is a fickle creature that can be lost much faster than it can be gained. Give your customers a reason to choose your dealership. Then ensure that the experience they have is one that they would want to repeat. Only then can you really build that relationship and transform your customers into loyal customers that will return because they want to – not because they have to.

I had just finished reading this article on marketsoft.com about customer loyalty, when a business associate told me about a similar situation that happened to him. In his mailbox was a glossy, oversized postcard offering a discounted oil change for his vehicle from the dealership from which he purchased it.  In an attempt to cater to new customers, the dealership was offering a $16.95 oil change, which it claimed, was a savings of over 50 percent off of the regular price of $34.95.  The next day, my associate received an email from the service department at the same dealership. It was reminding him that his oil change was due and that he could schedule an appointment on the dealership’s website and lock in the VIP customer rate of $34.95 for the oil change.

Wait, what?  The VIP customer price is actually the regular price. Where is the VIP rate? As a current customer, it surely appears that he needs to pay double? It may not seem to be a costly mistake on the surface. But stop for a moment and view it as the customer would. Suddenly both of the communication pieces become worthless as the customer level of trust is now fractured.

This happens all too often in the auto industry.  For marketing purposes, customer information and vehicle data is imported into a CRM from a DMS, or many times obtained from outside third party resources. Sometimes the information is duplicated, errors occur between software platforms due to different data structures, multiple entries are created, and of course, sometimes, humans make mistakes with their data entry.  You can probably count dozens of ways that you’ve gathered customer information: in person; from the OEM; purchased marketing lists; and Internet leads are just some that come easily to mind.  Data isn’t routinely scrubbed for duplication or errors. With the numerous software applications being used, it isn’t hard to see how in one instance, one person may be viewed as a valuable prospective new customer, and then in an instant becomes a long-time “VIP” customer

A customer database is a gold mine and should be treated as such. Have you ever taken the time to evaluate how you assign customer ID numbers to your service files? Duplications and old outdated information is the norm, not the exception in most dealerships today. Every dealership would be wise to make a concerted effort to go through their customer database, update phone numbers, emails, remove duplicate entries, and ensure that the data is correct. How many times has your store sent out a service reminder to an individual that no longer has the vehicle? Without accurate data, how can you correctly target your customers and prospects? Customer attrition will surely accelerate if you make the mistake my associate’s dealership did of targeting the same customer with different messages, offering a higher price for a “VIP” customer than a new customer:  that’s a great way to drive away loyal customers.

It is common knowledge that it costs significantly more to attract and obtain new customers than it does to retain current ones.  With little or no profit in the discounted oil change, it is fair to assume the dealership hopes to sell additional services to the customer when they first visit, as well as capture their future business.  However, what is surprising is that, like many other companies, this dealership appears to be focusing the majority of their efforts on customer acquisition, instead of customer retention.

Looking at the volume of car dealers that use newspaper ads and television commercials to deliver sales offers, the audience is clearly directed to acquiring new customers instead of delivering messages to their existing customer base.  While acquisition is always a necessity in order for businesses to grow, the marketing efforts used are often out of proportion to the energies, resources and potential returns on maintaining existing customers. 

The marketsoft.com article shared a research study by Harris Interactive, which found that “only 38% of businesses are primarily focused on repeat customers for revenue growth, while nearly half (49%) are still focused on new customers.”  Assuming these numbers hold true with car dealerships, as they do with other businesses, it comes as no surprise that the dealership my associate has used for years is trying to capture new business by luring him in with a service special. However, the dealership is actually shooting itself in the foot by sending him both offers so he can see how little value he has as a regular, loyal customer.

It’s important to have an ongoing effort of eliminating multiple customer files and ensuring that the data you have is accurate.  Investing in the resources to review and clean your data can pay off immediately. It enables your dealership to generate the correct marketing pieces to each precisely targeted segment of prospective customers. It can also save you from the embarrassment of sending lowball customer acquisition offers to customers who don’t qualify for the offer. This then leads to better customer loyalty, a rise in customer retention and a lessening of customer attrition.

I had just finished reading this article on marketsoft.com about customer loyalty, when a business associate told me about a similar situation that happened to him. In his mailbox was a glossy, oversized postcard offering a discounted oil change for his vehicle from the dealership from which he purchased it.  In an attempt to cater to new customers, the dealership was offering a $16.95 oil change, which it claimed, was a savings of over 50 percent off of the regular price of $34.95.  The next day, my associate received an email from the service department at the same dealership. It was reminding him that his oil change was due and that he could schedule an appointment on the dealership’s website and lock in the VIP customer rate of $34.95 for the oil change.

Wait, what?  The VIP customer price is actually the regular price. Where is the VIP rate? As a current customer, it surely appears that he needs to pay double? It may not seem to be a costly mistake on the surface. But stop for a moment and view it as the customer would. Suddenly both of the communication pieces become worthless as the customer level of trust is now fractured.

This happens all too often in the auto industry.  For marketing purposes, customer information and vehicle data is imported into a CRM from a DMS, or many times obtained from outside third party resources. Sometimes the information is duplicated, errors occur between software platforms due to different data structures, multiple entries are created, and of course, sometimes, humans make mistakes with their data entry.  You can probably count dozens of ways that you’ve gathered customer information: in person; from the OEM; purchased marketing lists; and Internet leads are just some that come easily to mind.  Data isn’t routinely scrubbed for duplication or errors. With the numerous software applications being used, it isn’t hard to see how in one instance, one person may be viewed as a valuable prospective new customer, and then in an instant becomes a long-time “VIP” customer

A customer database is a gold mine and should be treated as such. Have you ever taken the time to evaluate how you assign customer ID numbers to your service files? Duplications and old outdated information is the norm, not the exception in most dealerships today. Every dealership would be wise to make a concerted effort to go through their customer database, update phone numbers, emails, remove duplicate entries, and ensure that the data is correct. How many times has your store sent out a service reminder to an individual that no longer has the vehicle? Without accurate data, how can you correctly target your customers and prospects? Customer attrition will surely accelerate if you make the mistake my associate’s dealership did of targeting the same customer with different messages, offering a higher price for a “VIP” customer than a new customer:  that’s a great way to drive away loyal customers.

It is common knowledge that it costs significantly more to attract and obtain new customers than it does to retain current ones.  With little or no profit in the discounted oil change, it is fair to assume the dealership hopes to sell additional services to the customer when they first visit, as well as capture their future business.  However, what is surprising is that, like many other companies, this dealership appears to be focusing the majority of their efforts on customer acquisition, instead of customer retention.

Looking at the volume of car dealers that use newspaper ads and television commercials to deliver sales offers, the audience is clearly directed to acquiring new customers instead of delivering messages to their existing customer base.  While acquisition is always a necessity in order for businesses to grow, the marketing efforts used are often out of proportion to the energies, resources and potential returns on maintaining existing customers. 

The marketsoft.com article shared a research study by Harris Interactive, which found that “only 38% of businesses are primarily focused on repeat customers for revenue growth, while nearly half (49%) are still focused on new customers.”  Assuming these numbers hold true with car dealerships, as they do with other businesses, it comes as no surprise that the dealership my associate has used for years is trying to capture new business by luring him in with a service special. However, the dealership is actually shooting itself in the foot by sending him both offers so he can see how little value he has as a regular, loyal customer.

It’s important to have an ongoing effort of eliminating multiple customer files and ensuring that the data you have is accurate.  Investing in the resources to review and clean your data can pay off immediately. It enables your dealership to generate the correct marketing pieces to each precisely targeted segment of prospective customers. It can also save you from the embarrassment of sending lowball customer acquisition offers to customers who don’t qualify for the offer. This then leads to better customer loyalty, a rise in customer retention and a lessening of customer attrition.

Do you think your customers feel the same about your company as you think they do?  Think again, they probably don’t.

These days, car dealerships, try to express their individuality from their competitors through value propositions. Almost every dealership has some sort of template or message as to “Why Buy from Us” integrated into their communications with their customers. Some find that they fall short in discovering or realizing what is the truth – customers are not as in love with them as they may think. Customers have their own perception as to what will make a lifelong marriage. Will the dealership realize that its promise hasn’t lived up to consumer expectations and strive to correct it? 

Quite often there’s a large gap between a company’s brand promise and the reality as perceived by their customers. A recent article on ZDNet cites several studies that show the disparity between what a company claims to deliver or strives to achieve, and the perception of the same by the consumer.  One of the studies cited in the article stated, “…fully 80 percent believe their firm offers a superior proposition. However, only 8 percent of customers held that same view.” This gap is so wide that it leaves little question that many companies are falling short of providing what the customer expects of them – and this leaves the door wide open for the customer to file for a loyalty divorce.

So how can your dealership avoid going to divorce court with your customer and turn the relationship into a wedded bliss – one that could lead into years of happiness and maybe even some offspring (referrals, repeat business)?  Like a conversation with your spouse, it all starts with communication.

With your customers taking to the web and social media at ever increasing rates, finding out what they are saying about you is step number one. Engaging with the customer is just a half-step behind. Imagine the customer who brought their vehicle into your service department for the third time for the same repair.  Bothered that she had to return time and again for the same issue, she told her friends in the office about her less than satisfactory experiences. She then spread the word on her Facebook wall and posted a message on your dealership’s Facebook page. She then left a two-star review on Google. Six months earlier, when she purchased her car, she said “I do” to your dealership and trusted that you’d be faithful to your promise: great customer service plus timely and accurate repairs.

You brand yourself as the dealer in town that everyone trusts to get the job done right. Yet this wasn’t the case with this customer and countless others that perhaps chose not to voice their frustrations. Some have decided to take their business elsewhere, even if that means a longer drive to a dealership in another area. Others are just waiting out the marriage, hoping that someday it will magically improve.   

What can you do for this customer? Start with a conversation through the mediums that she has publicly taken to.  After you’ve listened to, empathized with and addressed the concern, you can take back what you’ve learned from her (and others like her) and begin to implement strategies to improve any weakness you may have discovered in the relationship.  Perhaps you need to educate or train your staff; maybe staff changes need to be made; or perhaps it’s a simply a matter of better communication between the service team and the customer. 

While no individual or company will be perfect, if you have not bridged the gap between the customer’s expectations and the reality of your service, you may find the customer walking away after her six-month marriage, instead of riding out some of the rough patches until its time for an anniversary celebration.

It might be time to take a closer look at your dealership’s mission statement.  Are you fulfilling your promises and striving to improve. Or have you become complacent?  Are you listening to your customers and responding appropriately when concerns arise? Have you empowered your team to go above and beyond the customer’s expectations so that the customer will feel “warm and fuzzy” when they visit your dealership?

It’s time to take a look in the mirror and ask if you would say, “I do” if you were the customer. Or if it’s time to call off the wedding.