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Litton: Improving retention is not an easy task

Time 7 years ago

littonRETENTION has been a buzz word for the motor trade for the past couple of years, with manufacturers, finance houses and retailers all investing in people and process to try to plug the chronic customer leakage that has been affecting our industry.

Mercedes has a target retention rate which is roughly twice what the actual figure is, and it is certainly not alone.

But what is driving customers to look elsewhere at the end of their ownership period?


In this digital age, where attention spans have dropped given the choice available to customers, people get bored more quickly and desire change more frequently.

Cars are becoming more homogenous. You could line up 10 C-segment models from 10 different manufacturers and would the average car buyer really be able to tell the difference?

In terms of cost, the online channels have promoted tactical offers on target models.

If you need a car and are working to a budget, you no longer need to visit a franchised retailer, such is the professionalism and efficiency of the broker network.


What are retailers and manufacturers doing to enhance the shopping experience? BMW is dipping its toe in the water with Product Genius and retail managers but, as a shopper, can you honestly tell me that the showroom looks different and the experience is mind-blowing?

Finally, in the world of the premium brands certainly, you cannot ever overcome the perennial problem of residual value performance.

Regardless of how the customer paid for the vehicle, I seldom have a conversation which results in a positive comment on how level the curve of depreciation has been.

This is exacerbated at the end of a PCP, where the psychological damage of losing high deposits reflects poorly on the manufacturer involved.

The only true way to perfect retention is to build innovative cars, sold at competitive prices with amazing residuals, and if you could perfect that formula you will never need work again.

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Car Dealer has been covering the motor trade since 2008 as both a print and digital publication. In 2020 the title went fully digital and now provides daily motoring updates on this website for the car industry. A digital magazine is published once a month.

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