Improving Customer Loyalty for Auto Dealers: 3 Can’t Miss Strategies

Improving Customer Loyalty for Auto Dealers: 3 Can’t Miss Strategies


customer-loyalty

Focusing only on attracting new customers is one of the most common marketing mistakes made by car dealers.

Reeling in a buyer that has never purchased from you before certainly is a valuable win for your business. Unfortunately, it’s also often an expensive win.

When it comes to marketing, it’s all about return on investment. And, when it comes to ROI, the best bang for a car dealer’s buck usually comes from customer retention, not new customer attraction.

If you don’t have a customer retention game plan, you are missing out on an incredible opportunity for increasing sales. Don’t worry: this article has three can’t miss strategies for improving customer loyalty for auto dealers.

Improving Customer Loyalty for Auto Dealers

Before we dig into the specific strategies, let’s look at some numbers that prove the value of focusing on customer loyalty in the automotive industry.

Automotive dealership customer retention statistics

  • According to Kissmetrics data, it can cost up to 7x more to acquire a new customer than it does to earn repeat business from a past customer.
  • According to ICDP data, cars sold with service packages lead to 50% higher retained margin over the customer lifetime
  • According to the 2016 Automotive Dealership Loyalty Study by MaritzCX, “completely satisfied” buyers are over 4x more likely to make a second purchase from the same dealership than “very dissatisfied” buyers are.
  • At the same time, only 64% of car dealers consider customer retention to be a top concern.

Customer experience is a vital difference-maker for every dealership, but not all dealers have their marketing priorities aligned with that reality.

You can make improving customer loyalty the priority it needs to be in your auto business by following these three can’t miss strategies.

1. Car Dealer Loyalty Programs

A loyalty reward program is likely to be the most effective way for you to improve customer retention at your dealership.

There are plenty of incentives that matter to your customers and yet actually cost very little for you to implement. Some ideas:

  • Offer VIP packages that promise discount rates on service visits and parts
  • Create a company app that “gamifies” the car shopping experience by rewarding points and discounts based on the amount the buyer interacts with your business through the app

ICDP says customers participating in loyalty programs visit the dealer’s service department twice as often as non-members. Implementing one of these programs could be the big first step to improving your customer loyalty in 2018 and beyond.

2. Service Plans

Service plans are another win-win opportunity for customers and auto dealers.

Convincing customers to sign up ensures you with a guaranteed revenue stream, while the customers get the comfort of knowing their vehicle servicing needs are taken care of.

Getting your customers into service plans also gives you plenty of extra opportunities to impress them with your customer service. The more positive interactions they have with your staff, the more likely they are to come back the next time they are in the market for a car.

If you haven’t offered service plans in the past and you’re interested in improving customer loyalty, now is the time to act.

3. Loyalty-Focused Marketing Campaigns

Often, the hardest part about increasing a customer’s loyalty with your business is breaking their loyalty to another brand. This is where an effective marketing campaign can be a real difference maker.

Graham Oleson’s brand building campaign for the Kansas Heartland Honda Dealers group is an excellent example of what it takes to change a customer’s allegiance.

We conducted research to answer two questions: (1) what motivated local buyers in the Kansas marketing area? And (2) what made them loyal to certain domestic car brands?

We used that market intelligence to target ads at domestic loyalists. The result was stunning: Registrations increased 15.6 percent above the market average.

Once you’ve wooed a customer away from the brand they used to be loyal to, you can use service plans and loyalty programs to turn them into your customer for life.

Of course, loyalty-focused marketing campaigns can also be targeted directly at people who have bought with you in the past. Using customer email addresses on file to build custom audiences for email marketing campaigns or for remarketing ads on digital display networks and social newsfeeds. The options are nearly limitless.

Auto Dealers Can Start Improving Customer Loyalty Today!

Graham Oleson specializes in auto dealer marketing campaigns centered on breaking down your potential customers loyalty with other brands and building their loyalty with your brand.

Interested in learning more about the marketing strategies that have the most impact for dealerships seeking better customer retention?