By enhancing the way your dealership interacts with and retains service customers, you’re not only ensuring repeated business but also setting a foundation for increased profitability and market presence.

As global trade tensions and supply chain challenges reshape the automotive industry, the importance of owner retention has become more critical than ever for dealerships. It’s not just about the potential to sell more cars in the future; it encompasses a broad spectrum of benefits that directly impact a dealership’s bottom line.

Understanding Owner Retention

Owner retention goes beyond the simple act of selling vehicles; it involves cultivating lasting relationships with customers who will return to your dealership time and again for services. This relationship is beneficial and essential for achieving 100% service absorption — a goal every dealer should prioritize.

Analyzing Your Current Customer Engagement

One of the first steps in boosting owner retention is evaluating whether your customers genuinely enjoy doing business with you. This isn’t about superficial customer satisfaction indexes, though they have their place. It’s about deep analysis and understanding customers’ engagement level with your service department. Are these numbers climbing, declining or plateauing? This metric should be a regular checkpoint in your management reviews.

The Significance of Service Department Interactions

If your service department sees consistently active customers, you’re maintaining a healthy balance. But if these numbers are dropping, it’s a red flag that customers are likely choosing competitors for their needs, whether other franchised dealers or independent service shops.

For example, if your dealership sells 100 units per month but your customer base remains static, you’re likely losing as many to competitors as you’re gaining new sales.

Optimal Ratios and Financial Impacts

An effective way to measure your service engagement is to link vehicle sales to service visits. Ideally, for every vehicle sold, there should be multiple service interactions. For instance, selling 1,200 units in a year should correlate with about 7,200 service visits. Falling short of this ratio indicates missed opportunities and financial implications. Missing even 100 service orders per month could mean a significant annual loss in gross profit — potentially hundreds of thousands of dollars.

Strategies for Improvement

To recover and engage these lost customers, your dealership needs a robust action plan:

1. Marketing Strategy: As with any sales initiative, consistent, compelling communication is key to returning customers. Consider monthly mailers and email marketing with strong incentives, similar to successful retail strategies that companies like Bed Bath & Beyond employ.

2. Monitor and Review Marketing: Analyzing the effectiveness of your direct mail campaigns through tracking offer redemptions is crucial. Similarly, for email marketing efforts, it’s vital to monitor email delivery and click-through rates, as many marketing emails often end up in customers’ spam folders.

3. Service Excellence: Ensure every service interaction is an opportunity to demonstrate the value and quality of your dealership. This involves not just meeting but exceeding customer expectations on every visit.

4. Training and Accountability: Equip your team with the skills to enhance the service experience. Training should be ongoing and adapted to meet evolving customer expectations and industry standards.

5. Utilize Technology: Leverage modern CRM systems to maintain regular contact, schedule service reminders and promote special offers effectively.

The beginning of a new quarter is the perfect time to recalibrate your customer retention strategies. By enhancing the way your dealership interacts with and retains service customers, you’re not only ensuring repeated business but also setting a foundation for increased profitability and market presence. Implementing a focused owner retention strategy is not merely a suggestion; it’s imperative for modern dealerships aiming for long-term success and profitability. Let this year be the year your dealership not only meets but exceeds every customer expectation, driving loyalty and profitability to new heights.