Our Labor Day E-Bast Templates are here! Reach out and retain your customers first with these templates. ALL DFL dealers will receive these templates at NO Additional Charge! What are you doing to retain your customers? Give your customers reasons to return to your dealership this Labor Day!
I find it fascinating that everyone in the automobile business doesn’t use a rewards card to thank their customers for their loyalty. I don’t know the exact numbers who do but in the course of visiting over 200 dealerships per year it is a very low percentage.
Every industry wants to keep their customer engaged and coming back. How many people fly and don’t sign up for the airline rewards card? The same goes for hotels, grocery stores, and gas station. When you think about it, most of us have multiple rewards programs we belong to and get rewarded by.
The psychology of these programs is pretty simple to grasp. I’m going to spend my money with you and in return you will invest in me to get future business. This is a true win, win for both the customer and the business. How many people have stopped using cash all together so they can put their purchases on a credit card that is connected to a rewards program? The entire loyalty equation is changing. People don’t buy from you because their parents did. The prices on most products are already bare bones so they don’t just buy because it cost less. They don’t always come back because we treat them right. Customers know if you don’t appreciate their business, someone else will.
In the cost conscious world of the automotive industry some may look on reward cards as an extravagance. This does not have to be the case. A small percentage back can add up quickly for the customer and over time all of these visits will create numerous RO’s. Think of it this way, a coupon for a 9.95 oil change will cost the service department twenty or thirty dollars or more. Mostly like this will bring us a price buyer who spends money just for the oil change and we never see them again. That same money credited to a rewards card might bring us two or three RO’s and over time a loyal customer who continues to use the dealership for all of their automotive needs.
The difference between a rewards card and coupons or discounts are pretty significant. The latter is a bribe. We are spending money to gain business and hoping it leads to more business. With a loyalty card it is just the opposite, the customer gives us business and then we give them the thank you. The best part about this method is we have thanked the customer but he needs to do more business with us to reap the reward. Let me go over that one more time, when you use a discount or coupon the cost is up front and final. When you use a loyalty card the recognition is up front but the cost is down the road and is developing future customers not one time buyers.
The synonym for reward is award. Isn’t that what it is really about? We all want to receive an award for what we do. We give awards to our top athletes, our top writers, actors, and scholars. The same principle must apply to our customer base. How are you awarding the customer for doing the performance you want?
Reward cards are an intricate part growing your business. It is easy for the customer to understand and very cost effective. It answers two of our most important questions, why buy here, why service here. If we are not reinvesting back into our customers we are wasting a golden opportunity.
You are thinking that you need a retention program to move your business model to the next
plateau but you are not sure of what to expect? I have been training and installing retention
programs for dealers for close to 10 years and here is what I know.
A Golden Rule in the creation of a Loyalty Program is to never start a retention program unless
you are 100% committed to it. What I mean is that you are going into it with realistic expectations, you are looking at it as a long-term program and that you will work to ensure it
becomes a culture in your business. When you open the doors each day it will be a priority and
the way you conduct your business!
Let’s talk about the realistic expectations. There are immediate short-term gains, but you must
be patient to realize the long-term success of your program. I will break down into 3 categories
what you should be looking for. These categories are Sales, Service and Repeat Buyers.
Sales: Immediately, you will be offering a greater value-add to your customer in the buying
experience which, if properly implemented, should result in higher front-end gross profits,
added sales volume, higher CSI scores, more referrals and additional tools to make it easier to
close more deals. You want to think of the benefits you offer as a “Why buy here instead of
from my competition?” Most importantly, it will set you apart from your competition. They
simply will not be able to compete with you on VALUE. Some common components that make
up the benefits that you could offer each sales customer are Engine Guarantee, oil changes, tire
rotations and car washes. These each have a high perceived value and help to overcome price
objections. You couple these benefits with what you already are providing, such as Gourmet
Coffee and Snacks, Children’s play area, shuttle service, pick-up and delivery service, etc. and
you have just moved to a new plateau in how you value your customer. It is like the verse in the
bible, Luke 6:38,and I am paraphrasing, “Give and you shall receive”.
Service: If you are like most Dealers you probably fall somewhere in the range of 30 to 40%
retention currently (as measured only by NEW vehicle sales and reported by your OEM based
on 2 service visits within the first year after purchase). A properly designed, value-add,
retention program will double your current percentage of sales customers that are using your
service department. Rewarding your customer each time he services with you gives you a great
opportunity to up-sale at the next visit through “found money”. It is a more honest way of
conducting business in that the customer begins to feel that you have a vested interest in taking
care of them by keeping them safe and operational. Each visit is an opportunity to prepare for
the next visit and set realistic expectations on what services will be needed. You can expect
your absorption rate to move closer to the gold standard of 100%, an increase in the number of
repair orders daily and more customer dollars spent per RO. In every case where we have
conducted an audit of who spends more, we find that the customer that is a member of your
retention program spends anywhere from $12 to $226 more per visit than a non-member
customer. An increase in repair orders results in more labor hours and more parts being sold.
Repeat Buyers: A customer that bought from you and serviced with you during their ownership
cycle will return to you for their next vehicle approximately 86% of the time vs. a customer you sold and who never serviced with you returns to repurchase less than 25% of the time. It is a
reality that it is much easier to resale a vehicle that you originally sold new and serviced. You
want this trade-in as it is much more valuable than an auction vehicle! The typical time this
type vehicle stays on your lot is approximately 2 weeks. By installing a well thought out
retention program you are guaranteeing that you will increase your % of resales and receive a
highly valuable trade-in as a part of the deal. You have created a “Pre-Owned Vehicle Factory”.
-Roy Olive
Our August e-blast templates are here! Reach out and retain your customers! These templates are included AT NO ADDITIONAL CHARGE to ALL Dealership for Life dealers! What are you doing to retain your customers? Give your customers reasons to return to your dealership this Summer!
Retention is great for every business, and no one has better retention than the National Football League. Teams like the New York Giants have a 10-year waiting list for season tickets. We can probably never achieve that level of retention in the automobile business, but we can do much better than we have been.
Automotive business has been strong for a long time. Can’t we forget about retaining customers when so many people are just wanting to buy a car? Th e best way to grow our industry is not to sell more cars, but to retain more customers. Anyone who has been in this business for any length of time knows how cyclical it can be. Sales will go up and down, but a good service department never has to deal with down cycles.
We can talk all day long about all the things dealers think they are doing to build retention. Most programs, however, are just like throwing darts against the wall. If you don’t have a way to track it, a comprehensive program that works for every department and a plan for long-term success, you are probably wasting your money.
Customers want to be engaged. Easier said than done. We need to give them reasons to come back. How do we get them excited about doing business with us long term? Let’s lay out a program that will keep your customer engaged and motivated year after year.
First, we need to provide customers with reasons not only to buy here but to service here. A valid lifetime engine program can accomplish this and, in many cases, can be reinsured to offset potential liability. Next, couple this with an oil change program sold in F&I. Unlike prepaid maintenance, an inexpensive oil change program can double retention for three to five years.
Next, look at the digital side. Dealer Websites are generally good, and so are dealer mobile apps. From a retention standpoint, though, a personalized Website for each customer and a customer-centric mobile app are more successful in engaging the customer. This allows you to customize your message to each person in your database. Blanket CRM reminders work, but a better method is to create customized graphics with service specials, birthday greetings, service reminders, announcements of community events and all other direct communication you want to have with each customer.
How do you thank a customer for doing business with you? A nice note from the dealership? A call? A picture of them in the showroom? Th e airline and hotel industry have shown us for years what works. Copy this type of program and you can’t go wrong. Everyone wants to be rewarded. A customer likes it when they think, “I spent some money with you, but you are reinvesting some of it back to me as a thank you.” What keeps a customer more engaged: $100 off a set of tires or a box of cookies?
Retention is often overlooked on the service drive. Why not take the same oil change program you developed for F&I and sell it to everyone who uses your service department? Approximately 80 percent of customers who buy a car do not buy prepaid maintenance. Here is a great second chance to capture them again — and when you do, they will be loyal for up to three to five years. Finally, use your database to keep customers. More and more people want to shop from the comfort of their own home. Develop an online store to keep your customer always thinking of you for their automotive needs. Offer the oil change program and service contracts. Allow them to shop for tires, batteries and anything else they might need, but often buy elsewhere.
This is the path to successful retention. A program like this will create a retention rate of 75 to 85 percent. It is cost effective and, in most cases, highly profitable. More important, you can track it, see what is working, where it is breaking down and tweak it each month to get the best results. Most dealerships have a lot on their plate and the meat and potatoes of the business consumes most of the day. Retention is easy to overlook, but in some cases you are picking up dimes as you walk over dollars.
– Jack Garrity
June e-blast templates are here! Reach out and retain your customers! These templates are included AT NO ADDITIONAL CHARGE to ALL Dealership for Life dealers! What are you doing to retain your customers? Give your customers reasons to return to your dealership. Click Here to view this months templates.
May e-blast templates are here! Reach out and retain your customers! These templates are included AT NO ADDITIONAL CHARGE to ALL Dealership for Life dealers! What are you doing to retain your customers? Give your customers reasons to return to your dealership.
We’re a talkative bunch at our Dealership and the thing we really enjoy are conversations we have
with our customers. Sports, weather, and yes – even automobiles. Over the years’ we’ve paid attention and even learned a thing or two from these conversations! Vehicle owners tell us that keeping up with regular scheduled maintenance is the one thing that most find costly and inconvenient. They do understand how important this is to ensure safe and dependable transportation, but still find it hard not to feel this way. These conversations are what lead to the inspiration for our Lifetime program. We decided we could help our customers feel a little better about taking good care of their cars.
Our Lifetime program was designed to make the “expense and inconvenience” of regular vehicle maintenance as friendly and convenient as possible and save our customers some money! If we do our part and take care of them by saving time and money maintaining their car, we liked our chances that they will tell everyone about us. We looked at things this way …. it is the best advertising dollars we can spend. And we invest in the people who matter most – our Customers! And so, our Lifetime service program was born……
With a New/Used vehicle purchase our customer is automatically enrolled in our exclusive program that provides these benefits at NO CHARGE! It’s the way we do business.
Lifetime Oil Changes
Buying your next New/Used vehicle from us ensures that all your oil changes will be “on the house”!
Put another way…. Free!
Lifetime Tire Rotations
Replacing tires can be expensive, so we help extend their life by providing a complimentary tire rotation when you are in for an oil change. We don’t want you to spend money on new tires any sooner than you have to……we’re sure you could use that money for other things!
Lifetime Car Washes
The oil changes will keep your vehicles’ engine clean inside, but we’re going to go one step further! We’ll help you keep the outside of your vehicle clean as well! Just bring your vehicle by the dealership anytime we’re open and we will run it through our automated car wash. Yep, you guessed it, we’re not going to charge you a thing — all your car washes are “on the house”!
Lifetime Engine Guarantee
When you see a vehicle on our lot, our Factory/ASE certified technicians have checked it over and we have confirmed it is mechanically sound and meets our requirements to be offered for sale — to an employee family member or a stranger. One is as important as the other in our view. We know that we must stand behind what we sell ……. that’s just good business. It is how we have built our reputation. As part of our program we are now going to take this a step further than the typical dealership. As the old saying goes….
” We are going to put our money where our mouth is!”
New/Used vehicles purchased from us are provided a Lifetime Engine Guarantee. To enhance the value of the complimentary oil changes, periodically perform minimum levels of preventative maintenance on your vehicles’ fuel and cooling systems and we’ll stand behind the engine for as long as you own your car!
We are not here to sell you services you don’t need at prices that are not competitive. That is not how we do business. We are here to help you maintain your investment and manage your transportation costs by providing legitimate services at competitive pricing. Earlier we mentioned how expensive tires can be, well, so are vehicle engines! Service industry data consistently shows that the primary cause of vehicle engine failures is the lack of regular preventative maintenance on one or all of an engines’ oil, fuel, and cooling systems.
We want to do our part to help you avoid this potential expense…… and it starts by providing you with complimentary oil changes. If you see value in our Lifetime Engine Guarantee, you can take it from there and stay on top of the fuel and cooling system maintenance. Your choice either way. Regardless of what you decide, the oil changes are always complimentary. Our Service Team can explain all details and benefits as well as answer any questions you may have regarding these services. They will always keep you informed as your vehicle approaches the recommended mileage intervals of these services.
It’s that easy to have lifetime peace of mind when you buy and service with us.
Multi-point Vehicle Inspection
And finally, every time your vehicle is in for a complimentary oil change and tire rotation, we will also perform a multi-point vehicle inspection so we can keep you up to date on the overall condition of your car. Update you on things like brake pad measurements, fluid levels & condition, tire tread depths, condition of hoses & belts, etc. We don’t want you to be blindsided with an unexpected service bill or find yourself stranded along the side of the road because no one was paying attention. We want to be your dealership for life so we understand we are in this together. The fact of the matter is simple – vehicles require regular maintenance to keep them running efficiently, dependably, and safely. The sooner we both understand the overall condition of your vehicle each time it is in our shop, the better we can help you develop a plan to keep you on the road and help you manage your transportation dollars. This regular Multi-Point Vehicle Inspection allows us to do this. For us it’s never been about finding service work to sell you, but rather about performing the services and repairs you truly need and priced competitively to keep your ownership experience as affordable and hassle free as possible.
That’s our story……it’s why we do what we do. Thanks for allowing us an opportunity to share it with you.
April e-blast templates are here! Reach out and retain your customers! These templates are included AT NO ADDITIONAL CHARGE to ALL Dealership for Life dealers! What are you doing to retain your customers? Give your customers reasons to return to your dealership.
Every automotive dealer believes that they run the best operation and do everything a little better than their competition. Is this true? I have the pleasure of going to all regions of the country every week and walking into automotive stores that are new to me. I can assure you, that for most these stores, the look, feel and customer experience is the same. Fortunately for the consumer, most Dealers have done upgrades on their facilities. These range from cosmetic and operational changes to complete remodeling of their facilities. The automotive buying experience has gotten much better. But, the fact remains that all Franchise stores look the same. The only difference is the employees that work there and this is where the Dealer that wants to set the standard for customer satisfaction should look.
It is your employees that are the key to improving your profitability. Most come to you with prior experience within the Industry and established skill sets that you hope will mesh with your operation and sometimes they do and sometimes they don’t. It is up to you Mr. Dealer to give them an edge over their competition in both selling and servicing vehicles. You need a volume driver that will put more customers in front of your sales and service staff. All of you have tried direct mail and that is like a quick shot of adrenaline that fades quickly. You probably have done invitational sales and special promotions that are, at best, giving you one opportunity to sell something. Notwithstanding the fact that these programs are expensive!
So, how can you be different? What is something new that will put your operation ahead of the competition and give your employees the best opportunity to sell? Putting together a well thought-out and comprehensive retention program is the driver you need and must have. You must be willing to create a new culture within your organization and drive it from the top down. Your managers must buy-into your program or else you will never get it off the ground, therefore they should be involved in building the program. Since this is something new I recommend you find a professional company, with years of experience and proven results to partner with you in this endeavor.
Where do you start? List all the things you currently do to enhance the customer experience. Things that are often taken for granted but are an operational expense non-the-less. A few that are obvious are shuttle service, pick-up and delivery, complimentary beverages/snacks, multi point inspections and alignment checks, a vehicle wash at each service visit, quick lanes, etc. Then you build on these benefits by coming up with services your customers cannot resist, such as, complimentary oil changes and tire rotations, ding/dent repair, windshield repairs, etc. These can be for specific periods of time and capped to control the expense. All of these will cause your customer to choose your store for their vehicle purchase. Include a rewards component that will continue to drive your customer back for all the service and maintenance that are required on their vehicle. Keeping them in your service lane practically guarantees they will purchase their next vehicle from you. The final piece that must be in place is a robust communications component, via email, that keeps your customer informed about their vehicle, the services required and rewards earned and any specials that you periodically offer.
All this sounds complicated but let me assure you it is not. What is needed to make all this work seamlessly is data integration and software tools that are employee friendly. This is provided by your partner. Of course, you must do your part by establishing a new culture and getting your management staff on-board from the planning stages to implementation and ongoing training.
– Roy Olive
