Reshape Owner Experience, Increase Customer Retention

Today’s customers expect a lot from car dealership service department.

Think about it: Uber has made hailing a ride with a single tap the new normal, and having Amazon deliver packages to your door with one click is a given.

These companies deliver an outstanding experience, and their loyal customers prove it. So it’s not surprising customers expect the same level of quality from a dealership’s service department.

They’ll stay if they get the right experience. They’ll leave if they don’t.

Nearly 65% of dealership personnel rank service retention as a No.1 priority, according to Xtime research. However, most miss the connection between experience and retention. That’s a costly mistake, as the industry’s 51% retention rate shows in an R.L. Polk Loyalty Study.

Improving retention is essential for profitable growth, even more so than conquesting. Winning a new customer costs dealerships 10 times more than retaining an existing one, according to John Wiley & Sons.

And nothing drives repurchase intent like the ownership experience, not even the vehicle itself. Customers who express dissatisfaction with their vehicle but have outstanding service experiences have the exact repurchase intent as customers who love their car but have an average service experience.

What customers want from their ownership experience is simple. They want value, convenience and trust. Here are ways to give them that.

First, deliver valuable messaging.

That means answering customers’ three most important questions: What do I need? When can I get it? What will it cost?

Your messaging is a vital component of providing this value. Unfortunately, many dealership communications commit one unforgiveable sin: They waste customers’ time.

Dealers spend $2,000 or more a month on non-targeted direct mail with ineffective promotions. Or they send generic emails to their entire customer base, potentially offering a discount oil change to a customer who just had one.

Software can segment your database, allowing you to send customer- and vehicle-specific recommendations and promotions.

Provide even deeper value by taking a tip from websites like Priceline.com, using price elasticity to offer special discounts to lapsed customers. A 1-time deal is a compelling welcome-back message – and a top-notch experience can turn a lost soul into a loyal customer.

Second, provide convenient communications.

These days, convenience means meeting customers where they are. Every time you interact with customers, you should use their preferred channels of communication. To keep customers coming back, don’t make them go out of their way.

For example, online scheduling lets customers view all available slots and choose their preferred time. Confirmation emails then tie up loose ends.

Alternatively, telematics allows drivers to conveniently schedule from inside their vehicles when service is top of mind.

Two-way texting provides real-time vehicle status updates. By law, texting must be an opt-in process, but it’s a valuable way to keep customers informed, reducing wait time and uncertainty.

There’s a strong incentive to make appointment communications convenient. Because appointments give dealers more time to prepare, they cause a 12.4% increase in 1-year service retention compared to walk-ins.

Third, build a cloud of trust.

Wherever customers access information – your website, a promotional email or a phone call with a service adviser – it must be reliable, accurate and consistent. If an email offer quotes one price, then your website menus, service drive and business-development center must all offer that same amount. If prices differ by channel, trust and retention potential begin to disappear.

Cloud-based tools can eliminate the irritation of inconsistent information. Data in the cloud is accessible from every part of your dealership, keeping everyone on the same page. Updates automatically sync dealership-wide, preventing miscommunication. When your entire dealership delivers the same message, customers know what they’re getting.

Jim Roche is Xtime’s senior vice president-marketing and managed services.