At Performance Administration Corp., we spend a lot of time hammering home the importance of measuring customer retention. The reason for this is simple: it costs much more time and effort to go out and find new customers than it does to simply please the ones you already have and bring them back for that repair, those replacement tires, and in time, that new vehicle.

Customer Retention Strategies

Many auto dealerships are getting savvy to this and are spending more time focused on nurturing customer relationships and creating a positive experience every time someone steps through their doors. From complimentary car washes to luxurious lounge areas where customers can access free wi-fi and snacks while they wait, many dealerships are truly upping the customer retention ante. Many have gotten active on the web, posting on social media and creating blog posts with valuable information to keep customers tuned in.

One of the best and most effective customer retention strategies is implementing a complimentary maintenance program. This brings customers back to your dealership repeatedly in the first couple of years after they purchase their vehicle. It poses no risk to them, as the maintenance is at no charge, and it helps you build a relationship with the customer, increasing the likelihood that they’ll return to you for paid repairs, aftermarket upgrades, and their next vehicle.

Accurately Measuring Customer Retention

For an auto dealership that has just implemented a new marketing strategy or who has only kicked off a complimentary maintenance program in recent months, the biggest question is whether those strategies are paying off. Because auto dealership marketing is such a long-term strategy, it can be tough to know whether your efforts are working.

Because we understand how hard it can be to gauge customer retention and defection, Performance Administration Corp. works with its clients to provide results that can actively be gauged and measured so that your team can make adjustments as needed. We ask each dealership to send us two files – one reflecting past vehicle sales ID and VIN numbers and the other one reflecting basic customer pay, internal, and warranty service information. By compiling this data with our Current State Retention tool, we are able to provide a report that demonstrates exactly how customers are reacting to your current strategy.

The report shows:

• How many customers have never come back after purchasing their vehicle
• How many customers have returned just one time after their purchase
• How many customers have come back two times or more after buying their vehicle from you

The report also compares what the returning customers spent during their visits and compares it to our model reflecting what you could have made from those return customers if you’d had a complimentary maintenance program in place (for clients who still haven’t implemented one). When you factor in the sales numbers of those service visits, you know more than how many customers have walked back through your doors (or not); you can clearly see how these numbers are impacting your bottom line.

No More Guessing Games

Because customer retention is so key to success for auto dealerships, it’s surprising that many dealers don’t know their customer retention rate. This is why Performance Administration Corp. helps dealerships end the guessing game – offering reports to let our clients know exactly where their numbers are at, as well as expert advice and programs to help them boost those numbers. While implementing a complimentary maintenance program, an updated marketing strategy, or new employee training is bold and exciting, monitoring customer retention means being able to monitor the success of those programs … and knowing when to make changes to get the most out of your new direction.