Digital Advertising Blog




Boosting Customer Retention: Strategies for Auto Dealerships to Keep Customers Coming Back

by Terry MacCauley - Posted 2 months ago


Customer retention is a key factor in driving profitability for auto dealerships, particularly for independent and Buy Here Pay Here (BHPH) dealers. Research shows that increasing customer retention rates by just 5% can boost profits by 25% to 95% (Bain & Company). Retaining customers is more cost-effective than acquiring new ones, especially for dealerships operating on tighter margins. For independent and BHPH dealerships, implementing the right strategies is essential for building customer loyalty. At Big Time Advertising, we specialize in developing customized marketing solutions that help dealerships retain customers and grow their business. Learn more about our services.

 

1. Create a Customer-Centric Experience:

  • Build Trust Through Transparency: Transparency builds trust, which is crucial for customer retention. A study by Label Insight revealed that 94% of consumers are likely to be loyal to a brand that offers complete transparency. For independent and BHPH dealers, this means being upfront about vehicle history, pricing, fees, and any additional terms.

  • Personalized Communication: Research by Epsilon indicates that 80% of consumers are more likely to make a purchase when brands offer personalized experiences. Use your CRM tools to segment customers and personalize communications based on their purchase history and preferences. For BHPH dealers, personalized messages could include reminders for upcoming payments or service tips specific to the vehicle purchased.

  • Responsive Customer Service: Excellent customer service can be a game-changer. A report by HubSpot found that 93% of customers are likely to make repeat purchases with companies that offer excellent customer service. Train staff to be attentive, listen to concerns and provide timely solutions. Implementing a feedback system ensures any issues are resolved quickly, maintaining customer satisfaction.

2. Implement a Strong After-Sales Service Program:

  • Regular Maintenance Reminders: For dealerships with service departments, offering discounted or complimentary maintenance services can significantly boost retention. According to a study by Cox Automotive, 74% of customers who service their vehicles at the selling dealership are more likely to purchase their next vehicle from the same dealer. Sending out regular maintenance reminders via email or SMS helps keep your dealership at the top of your customer's minds.

  • Service Discounts and Loyalty Offers: Providing exclusive discounts on services or future vehicle purchases for returning customers encourages repeat visits and boosts loyalty. Even if a dealership does not have an in-house service department, they can partner with a trusted local mechanic or service provider and offer customers discounted service rates.

  • Follow-Up Calls and Check-Ins: A simple check-in call or text after a sale to see how the vehicle is performing or if the customer has any questions can go a long way in building trust. For BHPH dealerships, this is also an opportunity to remind customers of upcoming payments and encourage open communication if financial difficulties arise.

3. Develop a Loyalty Program:

  • Points-Based System for Discounts: Studies show that loyalty programs increase retention rates by 5% to 10% (Harvard Business Review). Independent dealerships can set up a points-based loyalty program where customers earn points for every dollar spent on services or referrals, redeemable for discounts or free services. For dealerships without service departments, points could be used towards accessories, detailing services, or even trade-in credits.

  • Referral Bonuses: Word-of-mouth marketing is invaluable, especially for smaller, independent dealerships. Offering referral bonuses, such as a $100 service credit or a gas card for every new customer referral, can help generate new leads and reward existing customers.  Most dealerships offer cash compensation, which is great, too. The key to whatever is offered is to deliver it as quickly as possible and make a big deal of it for the customer and the referring customer.  Get pictures and share them on social media with the tagging of both customers and more. 

  • Exclusive Events and Offers: Inviting loyal customers to exclusive events or offering special discounts on vehicle upgrades can create a sense of exclusivity and appreciation. For BHPH dealers, exclusive finance offers or trade-in deals can also be effective.

4. Utilize Personalized Marketing:

  • Segmented Email Campaigns: According to Campaign Monitor, segmented email campaigns increase revenue by 760% compared to non-segmented campaigns. Independent and BHPH dealerships should leverage CRM data to create targeted emails that appeal to specific customer needs, such as offering service discounts to customers due for maintenance or trade-in offers for customers nearing the end of their loan term.

  • Targeted Social Media Ads: Retargeting ads on social media can increase conversion rates by up to 150% (Invesp). Utilize these ads to reach customers who have interacted with your dealership before or to promote special offers and events. For BHPH dealerships, these ads can emphasize flexible financing or the importance of timely payments.

  • Leverage SMS Marketing: With an open rate of 98%, SMS marketing is a powerful tool for reaching customers quickly. Use SMS to send out reminders for sales events, service appointments, or important payment dates, ensuring customers stay informed and engaged.

  • Seasonal Segmented Marketing Offers: Create segmented marketing campaigns based on seasons and relevant customer needs. For example, promote “Back to School” offers featuring fuel-efficient vehicles ideal for moms running errands, “Winter-Ready” vehicles suited for harsh weather conditions in specific regions, or “Early Spring Tax Refund” campaigns with budget-friendly or fun vehicles like Jeeps and convertibles. This type of segmentation allows you to connect with customers based on their immediate needs and seasonal trends, driving more targeted traffic to your dealership. Crafting effective, personalized marketing campaigns requires expertise in customer segmentation and targeted messaging. Big Time Advertising has helped numerous dealerships harness the power of data-driven marketing to connect with their customers at the right time and place, delivering real results. See how we can help your dealership.

5. Host Customer Appreciation Events:

  • “Right From The Start” Event: Hosting a "Right From The Start" event once a quarter is an effective way to build relationships and trust with new customers:
     
    • Pizza and Drinks: Provide a casual and friendly atmosphere where customers can feel comfortable and welcomed.

    • Meet the Managers: Give customers a chance to meet key staff members, such as the sales manager, service manager, and finance manager. For dealerships without a service department, introduce them to partner service providers or offer discounts at affiliated service centers.

    • Tour of the Dealership: Offer a guided tour that shows customers where to go for questions, future purchases, or any vehicle-related concerns.

    • Small Presentations by Managers: Include brief presentations on topics like vehicle maintenance, who to call in case of problems, understanding warranties, and the importance of communication on payments (especially crucial for BHPH dealerships). For dealerships without a service department, focus on educating customers about proper vehicle care and where to go for reliable service.

    • Q&A Sessions: Encourage open dialogue where customers can ask questions and provide feedback. This fosters a sense of community and positions the dealership as a trusted advisor. Hosting a well-executed 'Right From The Start' event can make a huge difference in customer loyalty. Big Time Advertising provides full-service support to dealerships looking to create memorable customer experiences, from event planning and promotion to follow-up marketing. Please find out more about our event marketing services.

6. Engage with Customers Online:

  • Manage Reviews and Feedback: 90% of consumers read online reviews before visiting a business (BrightLocal). Responding to both positive and negative reviews demonstrates that you value customer input and are willing to improve. Encourage satisfied customers to leave positive reviews and offer incentives for doing so, like a discount on their next visit.

  • Social Media Engagement: Over 70% of adults use social media (Pew Research Center), so it’s essential to maintain an active presence. Share customer stories, dealership updates, and helpful tips for car maintenance. Run contests or promotions to increase engagement and keep the dealership in mind.

  • Create an Online Community: For BHPH dealerships, consider creating a private Facebook group where customers can connect, share experiences, and ask questions. This can serve as a platform to build a loyal community and foster customer relationships. Effectively managing your dealership's online reputation and engaging with customers on social media can drive repeat business. Big Time Advertising offers comprehensive online reputation management and social media services to help dealerships stay connected with their customers. Discover our digital marketing solutions.

 

Customer retention is about creating a dealership culture that focuses on trust, transparency, and long-term relationships. Independent and BHPH dealerships can leverage personalized experiences, vital after-sales service, loyalty programs, targeted marketing, and engaging customer appreciation events to keep customers returning. Building a loyal customer base takes time, effort, and the right strategy.

 

At Big Time Advertising, we partner with dealerships to create customized marketing plans that align with their unique goals. Contact us today to see how we can help your dealership thrive.

 

By: Terry MacCauley, Founder & CEO





Gear Up for Success

Join Us at the 2024 MidAtlantic Annual

Convention & Vendor Tailgate 

 

Big Time Advertising is excited to announce our involvement in the 2024 MidAtlantic Annual Convention and Vendor Tailgate!

 

Join us on Sunday, September 15th, for an exclusive workshop titled "What to Do NOW to Win in 2025," with a Marketing section led by our CEO, Terry MacCauley.

 

This game-changing session conceptualized and designed by TaxMax is explicitly designed for both retail and Buy Here Pay Here dealers, featuring Pro Bowl-level experts who will share valuable insights and strategies.

 

Attendees will receive a customized workbook, unique tools for achieving ambitious sales goals, creative marketing and training plans that push beyond conventional thinking, and acquisition strategies tailored to meet tomorrow's challenges today.

 

We proudly support all independent dealers nationwide and look forward to connecting with all the dealers and vendors at the event. As a proud convention sponsor, Big Time Advertising is committed to helping dealerships succeed in an ever-evolving market. Make sure to mark your calendars and be ready for a hands-on experience that will help you prepare for a successful 2025 and beyond!