It makes sense to retain customers. Research from Bain & Company correlates a 5% customer retention increase with a 25% profit increase. HubSpot Research reports 90% of customers are happy to become repeat customers if satisfied the first time.
Still, American Express found 33% of Americans will switch brands after receiving poor service once, and 60% will jump ship after two or more failures. Small dealerships can’t afford to lose that many customers, especially with customer acquisition costing five times more than retaining one.
Here are three ways small dealers can compete with big brands on customer retention.
1. Offer Loyalty Rewards
Ford recently announced an industry-exclusive FordPass Rewards program to retain customers. This program offers members complimentary vehicle maintenance on new vehicle purchases or leases, along with points for money spent on service at Ford dealerships. It’s also expanding its customer contact center and piloting a mobile service program.
Creating a loyalty program of your own can help you compete, but it won’t be easy. You’ll need to offer extended service and maintenance plans and other benefits that make YOUR customers want to drive past all the other options and make it back to YOUR dealership. If done well, however, you can compete with Ford dealerships by offering your services across a wider range of manufacturers.
2. Stock Reliable Vehicles
Toyota and Honda have a long-standing reputation for making reliable cars that last a long time. When something does happen, its owners know that they can easily get a repair or replacement. This is why both brands consistently top Edmunds brand loyalty surveys.
You’re not in control of how vehicles are manufactured, but a proper reconditioning process of every vehicle in your inventory prior to sale raises your reputation. The more retail-ready your used car inventory is, the easier the sales experience will be for your customers. Having a well-trained staff explain the benefits of being your dealership’s customer long term vs. just the one-stop customer will give them a reason to come back that is a real value add for their time.
3. Be Subject Matter Experts
Lexus is a relatively young car company, founded in 1989, yet it consistently tops the J.D. Power and Associates Customer Satisfaction Index. The company attributes this to its knowledgeable staff, which includes two unique dealership positions. Vehicle Delivery Specialists (VDS) introduce the cars and review their features, while Vehicle Technology Specialists (VTS) are on hand to answer advanced technology questions.
By becoming the go-to resource for your niche, you can create a community of customers that rave about you. Check out this YouTube channel for Hush Performance. They’ve been pulling together evergreen repair content that’s consistently drawing thousands of daily views to a small automotive shop.
You can replicate these successes in your own dealership, no matter how small. Be intentional with your strategy – whatever you do, do it consistently.
Contact The ACE Group today to learn how to retain customers like big brands with only a small shop.