Five Keys to Increasing Customer Retention at Your Dealership

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By Mike Gorun

Deal­er­ships today spend most of their mar­ket­ing bud­gets on acquir­ing new cus­tomers. Those ads in the news­pa­pers aren’t real­ly meant for cur­rent of past cus­tomers, they are meant to attract new cus­tomers. The cost of cus­tomer acqui­si­tion ranges from 6 to 10 times more than the cost of cus­tomer reten­tion, so what can your deal­er­ship do to increase cus­tomer reten­tion?

Here are five great places to start.

• Process­es –Are your process­es cus­tomer-friend­ly or are they focused on effi­cien­cy? What parts of your process­es are your cus­tomers com­plain­ing about? Exam­ine your process­es and put your­self in their shoes. If this were a process you had to go through, would you like it? No mat­ter what the process is for, make sure that your cus­tomers know what it is in advance and lis­ten to them when they tell you which parts they don’t like, then make changes accord­ing­ly.

• Reci­procity – The law of reci­procity states that peo­ple “respond to a pos­i­tive action with anoth­er pos­i­tive action”.  In busi­ness, reci­procity as relat­ed to cus­tomer reten­tion usu­al­ly refers to going above and beyond for your cus­tomer. In return, they will reward you with repeat busi­ness. Pos­i­tive actions don’t have to cost mon­ey. They can be any­thing from a kind word to open­ing the car door for them when they arrive. Have crayons & col­or­ing books handy for the par­ents bring­ing their chil­dren in with them. Small things some­times make big impres­sions. Use this to your advan­tage in all depart­ments of your store.

• Excep­tion­al cus­tomer ser­vice – Ensure that your customer’s expe­ri­ence is world-class cus­tomer ser­vice from the moment they become your cus­tomer through­out the entire rela­tion­ship. This will keep your cus­tomers loy­al. Empha­size cus­tomer ser­vice in all your process­es, in every depart­ment and to every employ­ee. Make no mis­take; the small­est error can cost you a cus­tomer. Train your staff the impor­tance of pro­vid­ing excep­tion­al cus­tomer ser­vice and hold them account­able. There is no eas­i­er way to increas­ing cus­tomer reten­tion than pro­vid­ing an expe­ri­ence that cus­tomers can­not get any­where else.

• Qual­i­ty Is Bet­ter Than Speed – Many busi­ness­es assume that the faster the ser­vice, the bet­ter the cus­tomer per­ceives it. Accord­ing to an arti­cle by Gallup, “If the goal is to cre­ate strong bonds that ensure cus­tomer reten­tion, com­pa­nies must focus on activ­i­ties that cre­ate and sus­tain the cus­tomer rela­tion­ships, not just on those that enhance com­pa­ny effi­cien­cy.” Slow down and take time to real­ly lis­ten to your cus­tomers. They will be the ones that inevitably decide whether your busi­ness thrives or not. Make sure that your work is top-qual­i­ty.

• Know Your Cus­tomers – As sim­ple as this sounds, it’s the one area where many busi­ness­es fail. There is noth­ing more impres­sive than going into a busi­ness and being greet­ed by your name. Peo­ple like to be remem­bered. It makes them feel spe­cial. There is no eas­i­er way to prove to a cus­tomer that you val­ue their busi­ness than by know­ing who they are. Encour­age your employ­ees to take the time to get to know your cus­tomers. Make them more than just a name in your com­put­er. They will notice and will be impressed. In today’s busy world, every­one is in a hur­ry. Be the busi­ness that’s more inter­est­ed in get­ting to know them than the one look­ing to get rid of them the fastest.

There are oth­er ways to increase cus­tomer reten­tion includ­ing cus­tomer loy­al­ty pro­grams, cus­tomer appre­ci­a­tion events and spe­cial offers. How­ev­er, by focus­ing on these five areas, you will improve your cus­tomer reten­tion rate sim­ply by being a place cus­tomers want to vis­it, rather than a place they need to go.

Mike Gorun is man­ag­ing part­ner at Medi­a­Trac and can be reached at the con­tact page.

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