Regardless of what industry you’re in, losing customers is not pleasant as a business owner. It’s even worse if you lose those customers to a rival. In the longer run, it’s most cost-efficient to keep current customers than to find newer ones. In the automotive industry, it is 5% easier to sell products to current customers than to new customers. This is because it can cost 6 to 7 times more to attract a new customer than to simply keep an existing one.
The automotive industry has faced some challenges concerning customer attrition simply due to the reliance on out of date metrics, which fail to tell the whole story of the customer’s experience and/or habits. It’s important for dealerships to understand their customers through the data that they collect as all customers are different as so is their revenue potential.
But before we can get into the best-proven techniques on how to retain those customers, it’s important to understand why it’s important to do so. It’s also worthwhile to know the most common reasons are, so that you are able to work on rectifying those.
Why Do Customers Leave?
Each customer that leaves has their own unique reason and story as to why they no longer do business with a company. We all have certain companies or organizations that we’ve stopped following, such as stopping wearing a certain clothing brand, drinking a certain brand’s juice, or buying a specific automotive company’s vehicle. There are reasons behind those choices, but they vary from person to person. However, we can boil those countless reasons down to four key elements.
- The dealership provided poor overall treatment or customer service
- The service or product failed to live up to the claims or the benefits did not meet expectations
- The dealership did not accommodate the needs of the customer
- The dealership was not empathetic to the customer’s situation
You might notice that only one of those elements actually has to do with the actual service or product that the dealership provides. That is not a mistake. Most reasons as to why a customer would choose to take their business elsewhere derives from how they were treated and their overall experience.
Five Proven Techniques To Retain Customers For Life
Before we get into the five techniques, it is important to note that experiencing some customer attrition is unavoidable. Even the most successful companies in the world who have fanatical followings are susceptible to losing a percentage of their customers over time for some reason or another.
Now, onto the five best techniques.
- Prepare, Fulfill, And Exceed Customer Expectations
Your customers will not be forking over their hard earned money without expecting something in return. With that exchange in currency, an understanding between your customer and you is then created. You will have told them everything that they should be expecting for their money, and they have agreed to your terms. They expect you to meet those terms.
In order to exceed their expectations, it’s not simply about under promising and over delivering, it’s actually about understanding the needs of your customer before they do. You need to be able to know what they expect from you, what they think about you, and what they think about their competition. When you know those, you will know how to tackle any issues.
- Streamline Customer Onboarding Process
For most businesses, including dealerships, there are two main milestones that need to be reached before the customer can be considered satisfied. Those two are the moment that they first interact with your salesperson and the moment that they achieve their first ‘success’ with your product and your customer service.
There are a few ways in which you can streamline the process, including defining ownership, welcoming customer appropriately, and becoming more engaged. Defining ownership through formalizing key handoff points and leaving nothing to change by assigning clear responsibilities can ensure that customers don’t fall through the cracks. Welcoming customers appropriate enables you to have the perfect opportunity to gain additional insights regarding their preferences and key interest areas. Finally becoming engaged is the most critical aspect of long-term success as allows the customers to realize the value that they place over your dealership.
- Be Proactive
It’s important for you to remember to not take your customer for granted, regardless of the time that they’ve been loyal to your dealership. Rather than passively reacting to your customer’s decisions and actions, you should endeavor to remain active in their lives, through proactive communication and identifying and re-engaging at-risk customers.
It’s no secret that people generally don’t enjoy change, so it’s important for you to keep them in the loop regarding any improvements or changes to any of your services that pertain to them. It might also be helpful to provide them with some notice if you are experiencing any technical or other difficulties that might hinder the use of your services. Communication works both ways, so you should also be actively listening to your customers, especially the unhappy ones. As customers are unlikely to showcase their unhappiness with the services received, they’ll eventually just stop coming to you. The best channels to find customer opinions are through email, social media, and comment sections of blogs.
- Be Responsive
You need to be reachable in ways that work for your customers. So, for example, if your customer messages on Twitter, you need to be able to respond promptly back on Twitter. Just as we mentioned before about keeping customers in the loop when you’re facing difficulties, you should keep that mentality with tweaking services to better serve those that have reached out to you.
You can do this by:
- Thanking them for replying and/or reaching out
- Genuinely empathizing with them
- Explaining to them what you’re actually doing to better your services and assistance
- Creating Service Plans
Service plans are actually one of the best ways to create loyal customers being as they are a win-win situation for the customer and the dealer. Your customers are already busy people, they don’t need the extra worry that servicing generally requires. Encouraging them to sign up for your service plan ensures a guaranteed a customer and income for the next few years. This gives you plenty of time to deliver a high-quality customer service that will encourage them to keep wanting to renew.
It is quite natural to get panicked if your dealership starts to face a growing customer attrition rate, but it’s important to focus on your current customers as much as possible. You need to put most of your efforts into keeping them as satisfied as possible to avoid any further loss of revenue, while also increasing the loyal of your current customers.