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Automotive Marketing by Area: Fixed Ops Focused

Automotive Repair Order Best Practices

Automotive Retention Rate for Dealers

Automotive Service Ads to Increase your RO

5 Automotive Service Department KPIs

Customer Retention in the Automotive Industry

Fixed Ops Digital Map for an Enhanced Experience

Increase Service Department Sales with a Winning Team

Measuring Dealership Retention and Customer Loyalty

Automotive Service Customer Retention for Dealerships

Automotive Service Customer Retention for Dealerships

Importance of Dealership Service Customer Retention

Dealerships have a renewed focus on retention efforts. Manufacturers today have replaced the Customer Satisfaction Index (CSI) surveys with a Key Performance Indicator (KPI) of retention. Retention is now the more utilized measurement of how a dealership is performing. The more a customer returns to a dealership for repeat business, the greater their lifetime value.

A single customer then becomes a more profitable venture for a dealership. It is also important to mention that a customer who returns for multiple service visits throughout owning a vehicle is much more likely to purchase their next car from that same dealership.

Automotive Service Customer Retention for Dealerships

 Identifying the customer

Identify your customers before determining which marketing strategies to implement. Active, inactive, and lost are the terminologies or phrases that we use within TVI MarketPro3. “Active” is a common term across the industry, and it refers to a customer who frequents a dealership for service over zero to twelve months.

Inactive customers fall into a 13 to 24-month window. It focuses on the second year. They have not returned for business with the dealership within this time frame.

The lost customer segment for us would be those who fall in twenty-five to forty-two months of inactivity.

The terminology is different amongst manufacturers, marketing vendors, and other consulting companies. But you will find many of us all use similar verbiage that varies based on the period of inactivity.  Defining periods of inactivity allows retention strategies to focus on keeping active customers in that same bucket.

 

How to measure customer retention in the automotive industry

Measurement of customer retention is dealership-specific. The way that we measure within TVI MarketPro3 is a simple method. We look at it as how many customers are active. We break that active customer down into visits per year.

There are manufacturers, however, that look at pay types. They look at the number of visits. For example, manufacturer A may look at the number of customer pay visits. They may require two customer pay visits over a 12-month window.

Manufacturer B may look at a sales-to-service retention calculation. From the date of a sale or certified used sale vehicle, how many customers came in within 12 months? How many came in from 13 to 18 months? Or how many came in from 19-plus months?  There is no right or wrong answer in regards to how to calculate retention. But it has to be calculated.

 

How dealers can use marketing to retain service customers

The primary strategy we use to influence customer retention is identifying the customer activity and action trends. When we see a specific period with a significant drop-off in customers, we strategize accordingly.

We would target those customers with a significant discount or an aggressive offer from a price standpoint. This offer would be time-sensitive to help attract customers. It allows a service team to earn the required number of responses or visits per year for the dealership.

 

How a service team can complement the marketing efforts for retention

Getting a customer through the door is the first step of customer retention. What a customer experiences after that is key to whether or not they will return. Service teams should complement the marketing efforts by focusing on giving the customer that wow experience. 

Your frontline workers, your advisers, and your greeters at the dealership should all be welcoming the customer with open arms. They should treat them as guests and show them around their facilities. An outstanding experience is a powerful tool for improving customer loyalty.

Refrain from overselling them for every single service due. By becoming more of an informant and educating them on their vehicle, you are more likely to gain their trust. Educate the customer on why the work you are doing is in their best interest. 

This process should never feel like a sales pitch, instead treat it for what it is. You are providing a service, and when you educate the customer, the service typically sells itself.

Customer loyalty is never just dependent on one area of a dealership. When working in unison, the marketing and service teams can be a powerful force in influencing return customers. These are strategies the adviser and service team can do to help retain customers for the long-term.

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