Building Customer Loyalty and Retention at Your Dealership

  • September 19, 2018
  • Steve Manzi

Front-end profits continue to erode as competition and incentives consistently squeeze the margins on sales, as NADA points out. With that reality, it’s essential for dealers to build up their back end profitability.

Customer loyalty is the intangible element that helps generate recurring revenue over time. Customers who have a positive experience will come back again and again for service and maintenance. Service and fixed operations revenue are often much more profitable than vehicle sales, so a focus on after-sales relationships with customers can be very rewarding.

The most important function of a loyalty program is to give your customers a clear reason to choose your dealership over the competition. If you provide value to your customers in the form of earnings and rewards, you have the foundation for a relationship that will result in higher satisfaction for your customers and higher revenue for you. Never forget that it is more costly to acquire a new customer than it is to earn repeat business from an existing customer. Dealerships that realize the importance of customer retention have a significant competitive edge over those that do not.

Discount cards and coupons for regular service and maintenance can keep customers coming back and make them feel taken care of. Points-based promotions that add up every time the customer visits the dealership use game theory to make customers want to return, and can work well in conjunction with other customer loyalty and incentive programs. Service programs can lead to higher margins over the lifetime of the relationship with the customer.

Another powerful driver of loyalty and customer retention is an F&I add-ons program such as the sell-through LoJack® SureDrive™ connected car app. SureDrive helps customers keep connected to their teen drivers (or just remember where the car is parked) and provides peace of mind. With SureDrive, customers are alerted of issues with their vehicle and can easily schedule a service appointment with your dealership directly from the app. This gives them a frictionless path to returning to your dealership for service. SureDrive can alert your dealership when a customer’s vehicle generates a DTC code so you can proactively reach out with maintenance and repair offers as well, offering another potential avenue for your dealership to secure post-sale business.

To learn more about how SureDrive can help your dealership build a valuable post-sales relationship with your customers, visit here.