9:00 am, October 26, 2024
If attracting customers is so expensive, why is the motor trade not very good at keeping customers?
Last month I was listening to the Car Dealer Podcast Live, and Vines boss Sean Kelly said that customer retention in the motor trade is ‘a bit c**p’.
His comments got me wondering if the rest of the motor trade thought the same.
So, I fired up First Response’s LinkedIn page and sent out this question in a poll: In your opinion, are dealerships doing enough to retain their existing customers?
Only 8% of people said ‘Yes’, 24% replied ‘it depends’ and 68% of people who took part answered ‘No’. I worked in sales for more than 11 years and talked to thousands of car dealers during that time.
I know how expensive attracting customers can be, especially with some advertising platforms charging dealers thousands each month. With endless choices at a customer’s fingertips, attracting them can be costly, but retaining them is both priceless and cost-effective.
Most of the dealers I spoke with openly admitted that they are so focused on hitting their sales targets for that month and attracting new customers, they often overlook the long-term value of retaining existing customers. I understand the mindset.
New customers can feel like the key to growth, especially with the ‘you’re only as good as your last sale’ mentality. However, I believe that failing to invest in keeping your existing customers is leaving money on the table.
I believe a loyal customer is more likely to recommend your dealership to others, leave positive reviews, and return for their service or next car. I’ve always thought that first impressions are crucial, and building a relationship with a customer starts right from the first point of contact, whether on the phone, social media or face to face.
It’s also important to personalise your customers’ experiences of dealing with you at every opportunity, which is where using a CRM system can help. If you record your customers’ preferences on contact methods, you can create customer communications that make customers feel more valued and more likely to engage with you again.
Staying in touch beyond the sale, through follow-up calls, emails, or social media, keeps your dealership on their radar, especially when they are in the buying cycle again.
A lot of dealers I’ve spoken to offer their existing customers perks such as service discounts, or even an MOT for life to make them feel appreciated and more likely to return.
With the rising cost of acquiring new customers, I believe turning happy ones into raving fans is one of the most powerful, cost-effective growth strategies available. Customer retention isn’t just nice to have, in my opinion it’s a must have in today’s competitive market.
This column originally appeared in issue 200 of Car Dealer Magazine. You can read the full issue here.
