Tag Archives: CSI

Freebie Love

I read an article recently in USA TODAY under the heading “ Expect some freebie love when buying a new car “ The article mentioned the things Dealers use to reward customers with, such as a free tank of gas, a second set of keys, floor mats, etc. The article pointed out special perks, such as service vouchers, window tinting, manicures, fresh coffee and cookies. It even listed some extravagant incentives, such as big screen TV’s and AK 47’s!

This got me thinking about a couple of things: first, how far we have come as an industry in trying to create happy customers after we have sold someone a car. I have seen it go from service-drive waiting rooms, nice furniture in the service lounge, donuts to bagels and lunch counters, big screen TV’s, to wireless internet, all in an effort to build a pleasing environment for a previous sales customer; Secondly, just how many of these rewards/perks are so poorly thought out. What is the purpose? Are we just spending money to make someone happy or is there a strategy behind these efforts/expenses?

Most of the rewards/perks mentioned in the USA TODAY article are like throwing darts, you don’t know what the target is. A reward is something someone earns for doing something YOU want them to do. A bribe is something we give to someone in advance, and then hope that the desired behavior follows. A good example of this is when we are raising children. If you say, here is an ice cream so be quiet, that is a bribe. On the other hand if you said, be quiet until we get home and I’ll give you an ice cream, that is a reward. The items mentioned in the USA TODAY article were all bribes. Everything mentioned is nice but purposeless. If we are rewarding them just for buying a car, great but if our objective is to create a customer for life, it’s going to take a much better plan than a free tank of gas.

Airlines and hotels do rewards best. “Fly on our plane, spend money with us and we’ll give you points for future travel”. The same works with hotel rewards. They say, do the behaviors we want, book a room, spend money, and we will reward you with points you can use later. Rewards work much better than perks to create a long-term relationship with a customer who has purchased a car.

When setting up a rewards program the first thing you should decide is, what’s important? If it is the old theory of “just sell the car, there are 10,000 people moving into this state every month”, then just stick with perks. On the other hand, if you want to grow your business with a deep customer base that will support you in good times or bad, you may want to look at a program of rewards that will thank the customer every time they perform services with you.

Free floor mats are nice but for the same expense we could give them a rewards card that can keep them coming back to the dealership for years. We give customers plenty of reasons to buy here, price, payments, terms, but very few reasons to service here. Why not design a program to keep the customer in your service drive for the life of their purchase. JD Powers says that if you keep a customer in your service drive twice a year for the entire time they own their vehicle, they will repurchase 86% of the time at your store. Take a minute and let that sink in. What a great way to incrementally grow your business.

There are many ways to design a program to give a customer a reason to service their vehicle at our store. Some of the best proven practices include, lifetime engine, lifetime powertrain, oil change programs, rewards cards and customized prepaid maintenance packages. Many of which can be reinsured. These options are not perks, bribes or hit/miss. All of these have proven to keep the customer coming back year, after year. They are trackable, effective, and profitable.

So before you spend 400.00 in marketing every month to get someone to walk in the door, think about designing a program with a long-range purpose behind it. Freebie love should last longer than a one night stand. Design your vows and have a long-term marriage with all of your customers.

– Jack Garrity

NADA100 Convention in New Orleans

Join Dealership for Life at NADA100 (Booth #6115) in New Orleans January 26 – 29, 2017 and see how your dealership can benefit from our full range of dealer branded retention and marketing products. Since introduced in 2004 we have become the leader in administering lifetime powertrain, lifetime engine, and rewards programs for dealers all over the US and Canada. Our process is designed around many of the best practices used in the loyalty business today. Some of which include, individual customer web sites, retention generated custom email campaigns, interactive customer mobile app, full DMS integration and monthly in-store sales/service training that is unmatched in the industry.

What are you doing to retain your customers? Are you rewarding your customers? Stop by booth #6115 and talk to the industry leaders.

“Our business has grown 320% in the last ten years due in large part to the loyalty and marketing programs designed by Dealership for Life. Their efforts and results have had a significant impact on every department in the dealership.” Chip Doetsch – President of Apple Ford Lincoln

“Now that we have been on the program for ten years, it works as advertised. Eight out of ten customers come back to our service department compared to three or four for the average dealer.” Ken Shreve – President of Hamilton Hyundai

“With over 30 years of experience in the automotive customer service and repair industry, Rick’s dealerships achieved sales to service customer retention at over 90%, making it ranked #11 in the nation” Rick Manring – VP of Fixed Operations

Stop by booth #6115 and talk to Chip, Ken, Rick and the rest of the industry leaders.

Have you noticed how Customer Retention is the new Buzzword?

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WOW! Have you noticed how Customer Retention is the new buzzword? For many years it was CSI and Manufacturer’s pushed it via incentives. Dealers quickly complied and after a while realized that improved CSI scores were good for the Manufacturer (why they are willing to pay incentives), great for the customer due to improved processes, cleaner facilities and more amenities, but not a game changer for the Dealer. The truth is CSI really has not done much to grow the dealer’s business. Since all Manufacturers have a CSI program, the bar of expectation has been raised and all Dealers have arrived at the same plateau of Customer Service.

Lets talk Customer Retention. A program to retain the customer after the sale makes so much more sense on many levels. However, many Dealers are in denial about this important aspect of their business as most think they are doing a good job of keeping their customers coming back. They believe all you have to do provide a good experience and they will return. They are led to this belief by past experience of retaining approximately 35% of their sales customers. Now the Manufacturer is getting in the game of retention and has set goals of approximately 50%. The truth is if you are not retaining a minimum of 75% of your customers your retention program is not working efficiently.

I am always amazed by how many Dealers believe a good CRM is all they need. They believe giving the customer a free oil change will work. I often hear “We treat them right and they always come back”. The truth is I have not found a single Dealer that does not have a goal of providing great service. This is what I call a 1970’s mentality. Customer Retention is not doing some things right, it is doing everything right in every department. Start by asking yourself what you are doing for the Customer in each department and is it working. Do you have a process? You must establish a culture of Customer Retention that encompasses your entire business.

Once you have a program do you measure it? All dealers can tell you daily where they are in Sales, Service, Parts, and Finance. These results are measured monthly and compared against previous months and years. But do you measure your retention? Most will answer yes to this question and base it on what the Manufacturer tells them it is. The problem with using this method is you are only measuring approximately 50% of your business. Isn’t your Pre-Owned Buyer even more important than New? Gross profit is typically higher and the need for service and maintenance is certainly much greater. What else should you measure? How about email and mobile phone capture rates? These are absolutely essential to be successful in todays’ business environment. Without the proper tools in place to track these metrics you are flying blind.

Most Customers have already shopped you online before entering your business. Communication with this medium in today’s digital world is a must for your success. Smart phones are now the acceptable norm so you should plan on a mobile application to represent your business and communicate information to your customer. There are many tools you must employ to have a successful Retention Program. A Benefits and Rewards Program, customer specific Web Sites, Membership cards, standard email communications program, Social Media are but just a few of the components you need. Whatever program you design should take into consideration all of your customers whether they are paying cash, financing, leasing, servicing or purchasing parts.

Hand-in-hand with your retention program should be Dealer Branding. This should be your program to enhance your business, not the manufacturer. As with any program, training is essential and must me an ongoing endeavor. Also, reviewing reports that tell you how well your program is working and sharing these results with every manager.

As you can readily see, putting a Customer Retention Program together is not just “treating the customer right and providing good service”. You must have a comprehensive plan that when implemented changes your mindset towards how you conduct your business on a daily basis. I do not mean to imply that it is easy. It is not! But, it is worth the effort and will pay off in the long term by returning your customer back to your business for all their automotive needs.